Editor's note: Inc.com columnist Alison Green answers questions about workplace and management issues -- everything from how to deal with a micromanaging boss to how to talk to someone on your team about body odor.
A reader writes:
We're thinking about implementing an unlimited paid time off program in my company, in which if you need a day, or a week, you take the time and aren't bound by a certain number of days you can take in a year. Certainly, there are a ton of considerations in doing this. I'm interested in knowing what you think of this and whether there might be unintended consequences.
There are three things that companies often don't consider before switching to unlimited time off:
1. It requires your managers to actually manage. If someone is abusing the benefit, you need to know that he or she will address it, and address it effectively. These programs implode if managers are too unassertive to speak up when employees aren't achieving what they should and are taking too much time off.
It also requires a shared understanding of what too much time off means -- but that understanding has to take into account the context of how someone is performing. What's too much for your new employee who hasn't mastered the job yet is probably different from what's too much for an established high performer. Making good, nuanced judgment calls on issues like that -- and then acting accordingly -- takes good managers. Do you have them?
2. You need to have good employees. You're talking about switching to a policy that treats people like adults and assumes that they can manage their own workload and time away and still perform at a high level. It should go without saying that you want this kind of staff anyway, but if you don't have one yet, you're going to need to make some changes there.
3. You need to make sure that the switch doesn't result in people feeling they should take less time off than in your current system. This is easily the biggest downside to these policies for employees: Because people aren't told "you get X days per year," they have no idea what's OK to take, and then end up not taking time off that they could because they don't want to be seen as slackers. In fact, some companies that switch to unlimited time off find that people continue to take the same amount of time they always did (because they're afraid to take more) or that they even take less. That's not great for your company, considering the productivity and morale benefits of people unplugging from work and taking real time away.
Plus, if you currently pay out unused vacation time when an employee leaves the organization, consider that under this new policy, no one will be accruing any time to be paid out. That might sound like a benefit to the organization, but if employees aren't benefiting from increased flexibility and increased time off, it's a net negative for them -- and can be a morale killer. So if you're going to do it, you really need to figure out how to encourage employees to take full advantage of the policy, so they don't end up feeling worse off in the end.
In many ways, unlimited time off really is treating adults like adults. But you're going to need good managers, good employees, and a clear, shared understanding of how it should work.
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