Ryan Sanders and Ben Peterson, co-founders of Provo, Utah-based HR software maker BambooHR, take the idea of work-life balance seriously. So seriously that they have a strict "antiworkaholic" policy. The 53 employees leave at 5 and are taken to task if they put in more than 40 hours a week. Too much work, Sanders says, yields unhealthy, burned-out employees--and a less successful company.

We asked Sanders how he and Peterson arrived at this policy and how they make it stick.

They Saw the Cost Up Close

Peterson and Sanders created the policy after observing the suffering of friends and colleagues at other startups. Stress put one co-worker in the hospital; he continued to answer work emails on his phone. Another colleague's marriage collapsed after he opted to work through the holidays without a break.

In fact, Sanders's former employer offered workers gift cards and bonuses for logging more than 50 hours a week. Today, Sanders has three children and Peterson has six. Both partners vowed to put family before work. "The tradeoff isn't worth it," Sanders says.

They've Made Sure the Policy Has Teeth

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Lots of companies pay lip service to work-life balance. BambooHR enforces it. One employee, a software developer, nearly lost her job for continually working 70 to 80 hours a week. She was sleep deprived and grew increasingly difficult to deal with.

And her productivity took a nosedive: In one case, a conversation that should have taken 15 minutes stretched to two hours because the woman was so exhausted. Peterson and Sanders confronted the employee and warned that if she did not cut back to 40 hours, she would be fired. "Working a lot is great on the surface, but down below, it affects the business," says Sanders.

They've Made It Easter to Work Smarter

To get the most out of 40 hours a week, BambooHR teaches employees time-management tricks like limiting meetings and email interruptions. Employees use GoToMeeting instead of traveling for face-to-face client meetings, and they communicate with clients often to let them know when they will be unavailable. The strategy does not seem to have hurt: With clients such as Fab and Pinterest, BambooHR will triple revenue, to $10 million, this year.

The Case Against Working 24/7: Research shows that making your staff work marathon hours does more ill than good. Here's why.

1. It's hazardous to their health. There is a 67 percent increased risk of developing heart disease for workers who put in 11 hours a day vs. eight.

2. Increased likelihood of alochol-abuse. It's three times more likely that those who work 50-plus hours a week will develop an alcohol-abuse problem.

3. It kills productivity. Fifty percent of employees are less productive as a result of stress.

4. Losing sleep is equal to small intakes of alcohol. Twenty hours without sleep is equal to a 0.1 blood alcohol level, which is the equivalent of five or six drinks (for people 160 to 180 pounds).