Question

Case Time Off At Superior Software Services

As she hangs up the telephone, Joan Jackson realizes that she needs to consider changing her company’s time off policies. She just received a call from an employee reporting off work because he is sick. This is the second employee on the same project team to call off this week, and the unscheduled absence will likely cause a delay in meeting the project deadline.

Joan, the president of Superior Software Services, is proud that her company has earned a reputation for providing high-quality software solutions. Superior recruits and retains top software engineers and also boasts an impressive administrative staff. However, even with a talented staff, Joan is concerned about the company’s ongoing ability to meet project deadlines.

Over the past few months, unscheduled absences have caused Superior to delay the delivery of software products to a few clients. When a staff member calls in to take a sick day without prior notice, shifting employees to cover the work in order to meet a deadline is difficult. Joan believes Superior’s time off policies may be causing some of the problems.

Superior offers employees 7 vacation days and 5 sick days each year. The company has a policy that employees may use sick days only for illness or emergencies. Employees may not schedule sick days in advance. Vacation days are scheduled at the beginning of the year. Employees receive approval of their ­requested vacation days on a seniority basis, so most employees designate the days they will take their ­vacation within the first few weeks of a new year so they are able to effectively plan vacation travel.

Joan believes Superior’s current time off policy creates an incentive for employees to call off at the last minute. She has learned from supervisors that many employees use their sick days to take care of personal business such as attending parent–teacher conferences or running personal errands. These are often events that could be prescheduled time off, but employees do not feel they have a time off option to address such needs. Sick days can’t be prescheduled, and vacation days are often already committed at the beginning of the year.

Joan believes that changing the time off policies could reduce the number of unscheduled absences, but she is not sure if her idea will address her concerns. She is considering replacing the current vacation/sick day allowance with a paid time off (PTO) bank. Employees would receive 12 PTO days each year. They would be permitted to schedule preferred days off at the beginning of the year so that they can make vacation travel plans, and the remaining days could be saved for days when the employee is ill or could be scheduled ahead of time to take care of personal business. Joan believes this change will encourage employees to schedule their time off in advance when possible. With advance notice of absences, supervisors will be better able to plan projects and meet deadlines.

Questions:

1. 9-6. Do you think changing Superior’s time off policies will decrease unscheduled time off?
2. 9-7. Beyond reducing occurrences of unscheduled time off, are there any other benefits to offering PTO?
3. 9-8. Are there any disadvantages to offering PTO?

Answer 1

Do you think changing Superior’s time off policies will decrease unscheduled time off?

Yes, changing Superior's time off policies will definitely decrease unscheduled time off. The change in leave policy from 7 vacation days and 5 sick leave to 12 days PTO will be a welcome move for Superior's employees as they can intimate their unscheduled leave to their managers at least 2 days in advance so that the manager has a reaction time to plan that day's schedule. Offering PTO will make employees balance the time they wish to utilize for personal urgencies and holiday time. It is not practical to expect employees to decide what kind of personal commitments they are going to have in that calendar year. This makes them apply for sick leaves when they come across a personal emergency which increases unscheduled time off.

Beyond reducing occurrences of unscheduled time off, are there any other benefits to offering PTO?

Offering PTO may motivate the employees and may help in improving the commitment towards the organization. This may also help to reduce employee turnover. The employees who return from vacation will feel refreshed and perform well as the vacation helps them to overcome workplace stress. Other than this, it will help in meeting project deadlines, create work-life balance, etc.

Are there any disadvantages to offering PTO?

Disadvantages can be as follows-

• Employees consider PTO as vacation time and utilize all the time-off. They don't use it when they are sick and come to work but apply for it when they need vacation time.
• If employees plan their vacation for many days during a hectic work schedule, it may affect the project delivery and the performance of the company.
• If there is an emergency for the employee, the absence of the employee will be an unscheduled one, which would hamper the schedule of the day, although it is under the purview of PTO.