August 21 2012
Institutionalizing Personal Responsibility in the Workplace?
Vicki E. Alger
I must have a great employer if I can write a blog like this one. Yahoo’s The Exchange Blog recently called unlimited paid time off the “holy grail of perks.” Basically employees take as much vacation time as they want and still get paid. But here’s how American PTO differs from other compensation schemes like European-style paid holiday mandates: employees must take personal responsibility for getting their work done. In other words, slacking off is not a government entitlement program. As Yahoo explains, unlimited paid time off is like:
...the work equivalent of a $7.95 all-you-can-eat buffet: Take as many days off as you want, whenever you want to take them, as long as you get your work done.
A number of companies, particularly the Silicon Valley, start-up kind, are moving away from the traditional vacation accrual policy and toward a looser, more employee-friendly unlimited paid time off policy. These somewhat new policies give workers greater flexibility and free managers from the administrative drudgery of having to track employees' time off. More important, an unlimited vacation policy gives these companies a recruiting edge in the war for talent….
Full-time employees at Netflix; Chegg, an online textbook rental site; Gilt Groupe; TIBCO Software; Zynga; Castlight Health; Bluewolf; NerdWallet; and magazine publisher Rodale, among others, currently have this perk.
Of those offering paid time off plans (51 percent), 1 percent provided their employees with unlimited PTO. Unlimited time off isn't the norm yet, of course. Out of the 51 percent of companies that offer their workers some sort of paid time off plan, according to a survey by the Society of Human Resource Managers, just 1 percent provide employees with the unlimited variety. (By the way, the U.S. is the only developed country with no legally required paid vacation for its workers.)
Still, unlimited vacation policies are becoming more common. "I've had more companies lately who either have made the switch to unlimited or are contemplating it and are asking about legal risks," says Christina Gomez, an employment attorney at Holland & Hart LLP in Denver who has worked with firms to implement such policies.
So what's to stop someone from taking off July, August and September to do the grand tour of Asia? Or every other Tuesday — just because they can? For one, employees are ultimately accountable for their work. "I think employees will say 'I can take 48 weeks of vacation, but practically speaking, I have this assignment, this conference call, this meeting," Kane says. "The limiting factor about vacation is, can you get your work done?"
Compare this approach to minimum-wage mandates. Minimum-wage laws create floors, which employers race to the bottom to meet. Similarly, in over-regulated Europe, there’s no incentive to innovate regarding vacation time, or much else for that matter. Instead, employers simply gravitate to the imposed mandated minimum.
Unlimited PTO policies would also be a preferable approach to bureaucratic family and maternity leave practices. Women and men who want more family time would simply organize their priorities and time to get their work done. Companies would see reduced administrative and managerial burdens and likely greater productivity. Why?
Good employees are also good self managers and don’t slack off even when no one is watching, so unlimited PTO wouldn’t make a difference. It would, however, shine a light on suspected slackers. An employee who’s likely to abuse unlimited PTO is also an employee who probably doesn’t get his or her job done as it is, which begs the question, why are they allowed to keep their job in the first place?
Offering unlimited PTO would help employers attract innovative, hard-working employees to replace those with less than stellar job performance track records.