Why vacation is good for business

Posted on December 15, 2011 in Consulting

 “All work and no play makes Jack a dull boy,” and, I will add, not the best employee he could be.  Employees need time off from work to relax, rejuvenate, and return to work ready to perform at their best. 

 In the book The Power of Full Engagement, Jim Loehr and Tony Schwartz argue that managing energy, not time, is the key to high performance.  This exceptional book argues that a person performs at his or her best by oscillating between a state of relaxation and full engagement.  It demonstrates that a person performs at a higher level after rest, and cautions, wisely, that excessive work is as bad as too much rest.  The authors offer great examples of extremely successful business persons, powerful politicians, and top-performing athletes who make it a habit to focus intensely on work and then retreat to renew their energy.  I am so fond of this book that I buy copies at used book stores and hand it out to friends. 

 Employers can encourage employees to perform at their best by adopting vacation policies that are consistent with these notions.  I have five simple rules:

 Adopt a “use it or lose it” policy.  Vacation serves the interest of employer and employee when it is taken to renew energy that will lead to harder effort upon return to work.  Allowing employees to roll unused vacation time into successive years defeats the idea of balancing high performance and time off to rejuvenate.  A cautionary note: some states prohibit policies that call for forfeiture of accrued, unused vacation, but such policies are permitted and very common in Texas.

 Never pay for unused vacation time.   Paying someone extra money when they leave the job seems wasteful.  I suggest employers adopt written policies that make very clear that accrued, unused vacation time is not paid upon separation of employment.

 Encourage employees to take vacation during slow times.   Employers should encourage, and perhaps even require, that employees take their vacation during slowdowns in work.  An employer with a seasonal or cyclical business can take advantage of balancing its needs with employee’s desire to take off.  Some employers wisely require that employees take vacation during periods when it is known in advance that work will be slow.  

 Adopt an accrual based vacation policy.   Employers benefit most from a vacation policy that provides that an employee accrues vacation time as they work (e.g., ½ day of vacation per month worked during the first year of employment). Accrual based vacation policies balance hard work with well deserved paid time off.  In contrast, a policy that grants an automatic 2 weeks’ vacation on a calendar year basis can be manipulated by insincere employees.

 Leave employees alone during vacation.   I do so dislike it when even during vacation I fail to disengage from work.  I vividly remember comments from my kids when I could not get my mind out of the office even if I was very far away.  With that in mind, I genuinely try to leave my colleagues alone when they are enjoying their time away.  Why bother vacationing if you take a laptop and blackberry with you as you hike through the mountains.    On that same note, make an effort not to be the boss that sends the email to the vacationing employee.

Happy Holidays.