Is your vacation policy an "org smell"?

A company's attitude towards employee vacation may tell you more than you realise about how they approach employee engagement.

Posted by Tom Leach on January 18, 2015

It’s official. By international standards, when it comes to vacation allowance the US is stuck in the 19th century.

Whereas in most European countries it’s typical for there to be a statutory minimum of 20-30 paid vacation days per year, in the US there is no minimum. That’s right my non-US friends, it’s totally legal in the US for a company to employ you and offer you zero paid leave.


In practice it’s not quite that bad. The “conventional” US vacation package you’ll be offered when joining a new company in a “white collar” position is 10 days of paid leave per year. If you stay with that employer for any length of time you’ll typically earn an additional day or two of vacation allowance with each passing year, with most employees allowance reaching a whopping 16 days of vacation allowance after a decade of service.

The debate over vacation allowance in the US is peppered with predictable criticisms:

  • Limited vacation leads to faster burnout of staff and degraded performance.
  • Compared to 50 years ago when it was far more common to consider basing one’s career around one company, the modern labour force is far more mobile and median tenures are much shorter. This somewhat diminishes the ability of employees to earn additional paid leave as their careers advance.
  • It breeds a culture where your value as an employee is measured by the number of hours you put in, not by what you actually produce.
"That guy Tom starts sending emails at 5am and doesn't stop until midnight - guy is a machine!"
  • 40 percent of Americans don’t even use the meagre allowance they are actually afforded because this “need to always appear busy” is so pervasive.
  • Working more and doing other things less has adverse effects on happiness, personal relationships, marriages, child development, etc.
  • Creativity suffers when you’re constantly executing. Getting inspiration requires getting away from the routine occasionally and into the open mode.
  • Only around 35% of US Citizens have passports (compared to 75% in the UK and 60% in Canada). When 10 days vacation a year is typical, this is hardly surprising. This relative lack of travel represents a huge missed opportunity for personal growth and transference of ideas.

Generally, I tend to agree with these criticisms, though I think the degree to which they are applicable depends on the industry one is talking about. I suspect the detrimental effects on creativity and performance tend to be more pronounced in a creative context.

What interests me more though, is what a vacation policy tells you about how a company values and engages it’s staff.

WTF is an “org smell”?

In software engineering, the concept of “code smell” is widely used to describe a visible symptom of a deeper underlying flaw in the structure or design of a larger body of code.

Probably the simplest example is the “duplicate code” smell where multiple copies of the same code exist in a larger body of code. This smell is easy to spot and can be a symptom of poor design, lack of structual discipline, fuzzy ownership boundaries and other systemic problems all of which may be having other more significant detrimental effects.

The complexity of even a modest-sized program can increase quickly as the interactions between the multitude of objects in the program multiply. Code smells are useful because they act as a shorthand for discovering common flaws in a complex codebase without requiring the engineer to perform deep analysis of a complex system from scratch.

As with code, the complexity of a company increases quickly as it grows and the interactions between people multiply. In order to manage this complexity, people are grouped into teams, hierarchies are established, communications are formalized and policies on a range of issues are created.

“Org smell” describes a visible symptom of a deeper underlying flaw in the way the company manages this inherent complexity. Obvious examples of org smells are high staff turnover and clock-watching, both of which may signal a number of deeper organisational problems.

Why might a vacation policy be an “org smell”?

There is an encouraging trend emerging amongst those driving thought leadership in the management of engineering organisations: instead of trying to drive our employees towards a specific outcomes (be they accomplishing specific tasks, personal growth goals, or career paths) we’re far better off trying to drive them towards engagement in something that interests them. If we do that then the accomplishment of tasks and personal growth will follow and benefit the organisation in a far more profound way.

Perhaps the best exploration of this idea I’ve seen is Dave Zwieback’s presentation on running a self-organising team. I encourage you to watch him speak on this topic as he is far more eloquent and knowledgeable than me, but in a nutshell:

  • engaged people tend to work longer, harder, better than unengaged people
  • engaged people take ownership of problems rather than the simple execution of tasks
  • engaged people want trust and autonomy, are willing to earn it and will give you a huge productivity boost when they have it

The problem with the typically restrictive American vacation policy is that it’s completely blind to this fundamental truth and betrays the old Tayloristic idea that staff are resources to be consumed like any other.

If your company says “you get 10 days vacation per year, that’s it”, what they’re really saying is:

  • “we assume that you are fundamentally lazy and want to work as little as possible”
  • “unless we cap it, you’ll take as much vacation as you possibly can”
  • “we view your role at the company as that of a resource whose utilization we seek to maximize”
  • “your capacity to innovate and add value is simply a function of the hours you work”
  • “to appeal to your fundamentally lazy nature, we’ll incentivize you with the prospect of another day or two of time off if you demonstrate loyalty over several years”

It suggests that the company has no real idea of what it truly means to develop their staff. If you’ve ever worked with truly engaged people you’ll know that the problem is not getting them to do work, it’s getting them to take a break! Staff who are that engaged add value to your business in a far more profound way than those who are not. It’s a force multiplier.

Now some employers out there may claim “we do engage our staff - we have annual reviews, send people on training courses, mentor programs…”. These are all things which may help the engagement of an employee, but they are not guaranteed to do so. If you’re biasing those activities towards achieving specific outcomes, in which the employee may not actually be that engaged, then it’s likely that some of your staff may happen to be engaged but many are not.

Employers - ask yourselves this: If your staff are all truly engaged in their jobs, then why do you need a restrictive holiday policy?

There are two basic possible answers:

  1. “My staff are all super engaged. Actually, maybe I don’t need this policy after all.”
  2. “Though I believe my staff are engaged (we have an HR process for that you know) I don’t trust them not to exploit an overly permissive vacation policy.”

If your answer looks like 1 then great.

If your answer is more like 2 then you still have work to do. Dave Zwiebeck’s presentation is a great starting point for understanding how to truly engage your staff, including being OK with losing those who aren’t aligned with any of your company’s goals.

But until you feel comfortable with removing your vacation restrictions, I put it to you that a good proportion of your staff are disengaged and you are missing a huge opportunity to increase their productivity and, ultimately, the value being added to your company.

At GameChanger, our vacation policy was probably best articulated by our VP of Engineering, Phil Sarin recently:

“Take some fucking vacation!”.

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