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Paid Time Off

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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 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 their 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. But, 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.

Beyond reducing occurrences of unscheduled time off, identify and describe at least two other benefits to offering PTO.

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The answer to this problem explains paid time off. The references related to the answer are also included.

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Yes moving to PTO system will reduce unscheduled absences, and reduce costs and productivity losses related with them. Joan will have greater control over unscheduled absenteeism. Unscheduled absences will be reduced.

One other benefit of paid time off is that the employees value the flexibility that paid time off ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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