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About a year ago, MoneyDesktop decided to switch from its standard accrual-based vacation policy to something decidedly less conventional: a flexible vacation policy. This means that MoneyDesktop’s full-time employees are able to take as many vacation days as they want, whenever they want, as long as they are getting their work done.
This may sound like a formula for chaos for most businesses, but for MoneyDesktop, a Provo-based company that creates personal financial management systems, it seems to be a strategy for success. According to KC Jorgensen, director of culture and talent at MoneyDesktop, the change has resulted in enhanced employee productivity and morale because people feel their efforts are being rewarded. “People are spending most of their waking hours at work. We want to have a work culture that goes beyond just clocking in and clocking out. We want people to be engaged.”
The unlimited vacation policy isn’t typical among most companies. In fact, according to a recent report created by the Center for Economic and Policy Research, almost one in four Americans don’t receive any paid vacation or paid holidays at all. However, there are a few high-profile companies in Silicon Valley, such as Netflix and Evernote, that have adopted the unlimited vacation plan in order to recruit quality employees. Netflix spokesperson Joris Evers told the San Francisco Chronicle, "It's about freedom and responsibility and treating people like adults."
Many human resources professionals can also see the benefit of open vacation plans. According to Bruce Elliott from the Society for Human Resource Management, "Studies have shown that employees are more productive in more flexible working environments. They're more engaged, and turnover is lower."
But there are some who think unlimited vacation policies are simply too good to be true. Among those critics is Lotte Bailyn of the MIT Sloan School of Management, who says in her blog that “too much choice is restrictive and confusing.” She claims that some employees, faced with the option of choosing their own vacation time, will simply avoid taking vacation at all.
Despite the potential problems with implementing the unlimited vacation plan, Jorgensen is convinced that it was the right move for MoneyDesktop. She has some words of wisdom to share with other companies that are contemplating such a dramatic change.
Hire the Best People
When Jorgensen sets out to find new employees, she has a particular objective in mind: “We hire for attitude,” she says. She looks for employees who are highly accountable and self-motivated. With these types of people on your team, you can feel confident that the unlimited vacation policy will work. Also, before the MoneyDesktop employees go on vacation, they make sure their work is done and delegate any outstanding projects to their co-workers.
Educate Your Employees
Before MoneyDesktop implemented the new vacation plan, the company held a meeting to educate the employees about the policy. At first, there was some confusion. “When I introduced the policy, people just stared at me,” Jorgensen recalls. People were hesitant to take time off at first because they thought unlimited vacation actually meant no vacation. But Jorgensen and the executive team at MoneyDesktop took the time to help employees understand how the policy works, and the approach seems to be effective.
Some employees have taken time off for long vacations, such as a month-long European trip. Other employees use their days off for long weekends or just to spend time volunteering at their children’s schools. But it doesn’t matter what the employees are doing on their days off as long as they return to work fully relaxed and recharged. “Our unlimited vacation policy helps people to attain an ideal work-life balance,” says Jorgensen.
Track the Numbers
Some companies with unlimited vacation policies actually don’t keep track of their employees’ vacation days, but MoneyDesktop does. “We have to measure the analytics to see if the policy is working,” says Jorgensen. She evaluates the data and assesses if anything needs to be altered in the vacation plan.
Implement an Open-Door Policy
According to Jorgensen, one reason the MoneyDesktop unlimited vacation system works so well is her open-door policy. Employees check in with her frequently to talk about their workload, their families and, of course, their vacation plans.
Defy Traditional Expectations
The unlimited vacation policy isn’t the only thing unique about MoneyDesktop. The company offers other perks such as a fully stocked breakroom, an onsite gym and subsidized offsite gym memberships. It frequently caters lunches and dinners and celebrates achievements by going on team field trips. All of these benefits connect with the company’s goal to provide a fun and fulfilling workplace, which helps to attract and retain the highest-quality employees.
Of course, not every company can offer these kinds of perks. But the underlying philosophy of creating your business on your own terms remains the same. As Jorgensen puts it, “With any policy you implement at your company, the bottom line is: Know your people and know your culture. Make bold moves, and don’t be afraid to be unorthodox.”