So having just come back from a recent vacation where I actually didn’t work for over 10 days nor was it a workation or a remote working trip like ones I’d would normally do, I wanted to share some thoughts on vacation policies and what I recently learned.
When unlimited PTOs were starting to be more prevalent in the industry, the premise was this - instead having to set a limit and wasting HR efforts on ensuring employees stick to the limit, why not just let it be free or unlimited? That seems innocent enough in theory doesn’t it? But instead this approach statistically has been counter productive. And what do I mean by that? In theory, we all want to take as much vacation as possible but do we in actuality do it? It seems that most of us do but always slightly less than each other. This creates a concept called the "prisoner's dilemma" situation, where each employee is incentivized to take less time off than they would if they knew the other employees were taking their full allotment of vacation time. This is because taking more vacation time can be perceived as shirking or being less committed to the job where you’re not touted as loyal or wanting that promotion. We’re all look for that baseline, that in theory does not exist. This has been an apparent problem where employees would burn out as it’s a race to bottom.
What I learned was that economists have come up with this concept of mechanism design, where there needs to be a higher power that sets a baseline - say a compulsory minimum days that employees need to take.
The better approach it seems is to provide a fixed amount of vacation time, while also encouraging the freely taking time off to recharge and avoid burnout. This would provide clarity and predictability, while also giving the flexibility we all need to take the time off to be effective and productive in our work.
Fortunately, I work at a place where we all freely take the time off as well as have constant encouragement to do so. Hence, why I’m feeling fully refreshed and back to work ready to hit the ground running again!
This is all to say, it’s cost effective for the company for you to take time off and plus it’s good for your soul and well-being!
What are you thoughts? Do you have unlimited PTO or fixed time off at work? Better question - are you, your colleagues, and higher-ups leading by example and taking time off to recharge?