Businesses of all sizes are beginning to offer employees unlimited vacation time — with mixed success.
General Electric this year implemented a “permissive approach” to paid time off, a change that will affect 30,000, or 43 percent, of the company’s employees, CNN Money reported. The policy grants employees the freedom to choose how much time they take off work.
Unlimited time off is a calling card of liberal start-ups looking to attract young, creative workers. Now, with G.E.’s entrance, the space is filling with established players.
“If you trust and empower people and give them a chance to rise to the higher expectations, the vast majority of people are able to do it,” Sam Stern, a senior customer experience analyst at Forrester Research, told The Huffington Post.
Streaming video company Netflix, once a small start-up itself, has 65 million subscribers and accounts for more than one third of all online traffic. The company is also the most visible proponent of unlimited vacation time, one of the many perks of its 6-year-old “Freedom and Responsibility” policy. The hands-off approach stems from the guiding principle that employees will behave like adults if treated like adults.
Tawni Cranz, Netflix’s talent officer, explained to The Huffington Post why the company’s strategy of openness is more than a recruiting tactic.
“The foundations of freedom and responsibility — not having a lot of rules, not having policies, not using sort of bureaucracy or hierarchy to govern — but instead really providing context to folks and giving them all the freedom to do their job and all the responsibility has increased over time instead of decreased, and continues to work,” she said.
Richard Branson’s Virgin Group has long been a testing ground for non-traditional work environments. Inspired by Netflix, Branson loosened limits on vacations for salaried employees last fall, saying on the company’s website that “it would be a very Virgin thing to do to not track people's holidays.”
“If working nine to five no longer applies, then why should strict annual leave (vacation) policies?” Branson wrote. Almost one year later, unlimited vacation is still offered to Virgin Group employees.
Not all companies have had such success.
Tribune Publishing, which owns the Chicago Tribune and Los Angeles Times, among other media groups, reversed its unlimited vacation policy only one week and a day after it was announced. The change “created confusion and concern within the company,” CEO Jack Griffin told CNN Money.
Sheena Iyengar, professor at Columbia Business School, attributed failed unlimited vacation policies to a phenomenon called “choice overload.” Many people decide not to take advantage of the unspecified time because it’s difficult for them to know the right amount to take, said Lotte Bailyn, emeritus professor at MIT Sloan School of Business, Quartz reported. Contrary to accepted belief, “less is more. Too much choice is restrictive and confusing.”
Choice overload is what kept a hands-off approach from succeeding at Triggertrap, a cool, young photography firm. After a year with unlimited vacation, the numbers showed that employees were working more often than before, not less. They “felt guilty about taking time off,” so they didn’t, the CEO said in a personal post.
“By the time the end of December rolled around, I had a team that was run ragged,” he wrote of the failed experiment. “If everyone is exhausted, we’ll never accomplish the things we’re trying to do.”
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