Netflix employees have unlimited vacation because no one is tracking their time. Instead of micromanaging how people get their jobs done, the leadership focuses only on what matters—results. They’ve found that giving people greater autonomy creates a more responsible culture. Without the distraction of stifling rules, employees are more focused and productive.
Contrary to the prevailing worry that productivity would plummet, Semler found that employees actually became more productive and fiercely loyal, and when the employees thrived, the company did, too. When Semler first instituted this policy in 1981, Semco was just a $4 million company. It’s now worth over $1 billion.
Companies defend their strict vacation policies with the belief that employees will take advantage of anything else. But companies that have actually tried unlimited vacations have found the opposite to be true. Freedom gives people such a strong sense of ownership and accountability that, like business owners, many end up taking no vacation at all.
While workaholic employees might sound good on paper, that’s not what smart companies want. Smart companies know that when employees take time off to recharge—especially when they have the freedom to take time when they need it—they come back even more creative and productive. Subsidizing that time off is money well spent.