Netflix’s unlimited vacation policy took years to get right
by Justin Bariso / © 2020, Mansueto Ventures, LLC. Distributed by Tribune Content Agency, LLC.
Several years ago, Netflix introduced a controversial employee policy that other companies would attempt to imitate. The policy eventually became known as “unlimited vacation.”
Unlimited vacation, which Netflix actually refers to as the “No Vacation Policy,” in essence puts employees in charge of deciding for themselves when to work and when to take a break. Advocates of the policy love the freedom and flexibility unlimited vacation [time] offers. But opponents claim it actually undermines employee freedom, as people end up working more out of fear of losing their jobs.
So, who’s right?
In his new book, No Rules Rules, Netflix CEO Reed Hastings tells the story of how the “No Vacation Policy” came into existence. In the process, he explains where many companies that try to implement the policy go wrong.
How it started
Until 2003, Hastings says, Netflix allocated and tracked days off like everyone else. But a single employee’s suggestion led the company to consider a change.
“We are all working online some weekends, responding to emails at odd hours, taking off an afternoon for personal time,” said the employee. “We don’t track hours worked per day or week. Why are we tracking days of vacation per year?”
Hastings realized he didn’t have an answer.
“Today, in the information age, what matters is what you achieve, not how many hours you clock,” writes Hastings. “I have never paid attention to how many hours people are working. When it comes to how we judge performance at Netflix, hard work is irrelevant. ... So, why should I care if [an] employee works 50 weeks a year or 48 weeks a year?”
Additionally, Hastings realized that many of the company’s biggest innovations happened after people came back from vacation.
Still, Netflix’s chief executive feared that doing away with a vacation policy altogether would give rise to two potential nightmares. In the first, the office is crippled: Everyone’s missing as important deadlines loom. In the second, workers turn into zombies after working years without taking a vacation.
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