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Vacation Daze

Sep 7, 2010 • Behavioral Economics, Businesses, Economic History, Economic Thinkers, Innovation, Labor • 108 Views    5 Comments

In a column about Netflix, author Daniel Pink described their vacation policy for salaried employees. They have none. All who are salaried can take off as many or as few days as they want. Their rationale? Because many people do a lot of work away from the workplace, time at the workplace is increasingly irrelevent.

Netflix vacation policy is what Pink means what he says autonomy at work motivates us.  In an econtalk discussion, he said that once we are sufficiently paid, autonomy (directing our own lives), mastery (desire to get better and better at a task), and purpose (“yearning to do what we do in a service larger than ourselves”) propel our performance. Discussing the same ideas in a TED talk, he quotes a Federal Reserve paper that suggests high compensation can even detract from job performance.

Should we care about Pink’s ideas? Do big changes have to happen at work? Can they?

The Economic Lesson

During the past several centuries, management styles have changed. We could start with Adam Smith’s description of small businesses and the division of labor in a market system and conclude with Alfred Chandler and Peter Drucker’s discussions of the structure and strategy of management and the worker in the modern corporation. 

But then, as suggested by journalist Alan Murray in an excellent WSJ article about the demise of old management models, the 21st century might require that we begin all over again.

 

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  • alhyatt2

    I agree with Sarah’s comment, because when we are given more freedom to do our work, we often want to be more successful in order to meet our own standards. And it is certainly true that things could get messy once vacation days are unclear. I think that companies should emulate GOOGLE’s strategy in the workplace and implement a “work hard, play hard” atmosphere, because it would certainly keep everyone alert in all aspects of the company’s goings-on.

  • zavodnys11

    I like the idea of employees having the ability to set their own vacation schedules, but for this to work, there needs to be some rules regarding whether or not work is being done in a timely manner. I think that, as long as work is getting done when it needs to be, the vacation policy at Netflix is realistic and fair.

  • LewisK

    I also agree with Sarah that people should be able to set up a schedule for them that allows them to do their best work. I think that if Netflix thinks that their system works best then they should be allowed to do this. If it doesn’t really work out in the end for them it’s their own fault but they can figure that out on their own.

  • birdf11

    Response to Sarah’s Comment:

    The internet has become such a powerful tool that many big businesses can work from locations around the world. The limitless vacation days do not mean that the workers have dropped everything and gone to the Caribbean; they just are not working from their offices. Another motivating factor that propels performance is the amount of money workers are paid.

    -Frances Bird

  • korberm11

    @mahalicks11: I agree that a freer employee structure is key to happier, and therefore more productive, workers. I think that this program should be tested for effectiveness, and as long as it works in practice, is a great workplace culture.

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