Page 19 - Harvard Business Review (November-December, 2017)

IDEA WATCH HOW I DID IT

might have a negative effect on P&L. We told man‑ children seem to be the biggest beneficiaries. In the
agers clearly that it was important for employees in past they struggled to figure out how to spread vaca‑
different departments to feel they were being treated tion time over various school holidays. Now they feel
similarly. We also reminded them that employees’ free to take more time, reducing this strain.
ratings of their supervisors have a direct impact on
compensation, so they might want to behave in ways
that reflected the stated policy of the company. OUR BEST YEAR EVER
We heard encouraging anecdotes about how em‑ Because we tracked the data, we don’t need to rely on
ployees were making the most of their newfound anecdotes to know whether the policy is working. On
flexibility. One spent several weeks participating in a average, Kronos employees took off 2.6 more days in
fundraising motorcycle ride through 48 states while 2016 than in 2015. In some departments the number
was significantly higher. Even so, from a financial
standpoint 2016 was our best year ever. I don’t think
AS FAR AS I KNOW, that’s a coincidence. Happy, engaged employees can
make a company more profitable, and our policy
makes employees happier and more engaged. We can
NO EMPLOYEE HAS prove that with data too. We’ve tracked employee
engagement for 15 years, and for a few years prior to
2016, the share of employees who agreed or strongly
ABUSED THE POLICY, agreed that Kronos was a great place to work had been
stuck at 84%. (Nothing wrong with 84%, especially
when you consider that global IT companies’ engage‑
AND NO CUSTOMER ment numbers average about 60%.) A year after we
launched myTime, engagement rose to 87%. Our vol‑
untary turnover dropped from 6.4% to 5.6%, which is
HAS SUFFERED. significant. And anonymous employee comments on
Glassdoor, a website many job seekers use to research
potential employers, express positive feelings about
the policy. As one commenter put it: “With its unlim‑
ited vacation policy, Kronos has upped their game
continuing to support his customers as needed. when it comes to benefits.”
Another accompanied her daughters while they took In a way it seems ironic that we’ve shifted to this
part in a traveling production of Annie and got her system, because our core business is providing work‑
work done while on the road. One employee had pre‑ force management software, and one of the things our
viously saved all her vacation time to visit her family product does is track and manage vacation accruals.
in India, which meant she could take no days off the If every company shifted to an open vacation policy,
rest of the year; now she can spend a few weeks in wouldn’t one of the benefits of our product disappear?
India and still take time during the holidays. I’ve re‑ Not if open vacation was deployed the right way. That
ceived e‑mails from people saying that the new policy we track our employees’ time off is a major reason our
makes it much less stressful to get to medical or dental new policy works. If you don’t track it, how else will
appointments. Even some of those who complained you know whether people are taking enough time to
about the plan when it was announced have become refresh and recharge, and whether managers are set‑
big fans, which is gratifying. ting a poor example or unfairly managing time off?
From what I’ve heard, the employee who used Tracking enables transparency and better communi‑
the most vacation time last year took slightly more cation, and if it’s done properly, it will build even more
than six weeks. (Under the old policy, a long‑standing trust and loyalty among your employees.
employee with four weeks of vacation who carried Right now unlimited vacation for all employees is
unused time over from the previous year could have offered at fewer than one in 20 U.S. companies. There’s
taken nearly that much.) But as far as I know, not a sin‑ a reason for that. Not every organization has the com‑
gle employee has abused the policy, and not a single bination of high‑performing employees, passionate
customer has been negatively affected by it. concern for work/life balance, and deep trust in its
At first I thought Millennials would be the most en‑ people necessary to make this kind of system work.
thusiastic about an open vacation policy. But in fact I feel very fortunate to lead a company that does.
employees in their thirties and forties with school‑age HBR Reprint R1706A

42 HARVARD BUSINESS REVIEW NOVEMBER–DECEMBER 2017