The creation of a Paid Time Off Policy (PTO) can be a great addition to the compensation package an employer provides for their staff. Unfortunately, if not structured appropriately these policies can give management a number of headaches. Here are five things to keep in mind when creating a PTO Policy:
Pull out the holiday calendar!
Every company handles holiday hours a little bit differently. Some companies mandate employees to work holidays, others make the day an optional work day, some pay holiday rates, some close entirely. It is crucial for you to understand this when determining how many PTO days you will be awarding and how they can be used. If your company gives the staff a paid day off on every holiday, nine holidays a year, then you may not want to award a hefty amount of PTO days. In contrast, if you do not do anything special for your employees on holidays, you may want to award an extra few days. Additionally, you may want to consider how and when employees may call off, because inevitably someone is always trying to work the system.
Expect this policy to be abused, be ready for it!
No good deed goes unpunished and as much as you think you are doing a nice thing for your employees, I am here to tell you that one of them is crunching the numbers on how to get over with their PTO days. Many companies require their employees to work the day before the day after the requester’s time off. This is to prevent individuals from using 1 or 2 PTO days to bridge paid holidays to score a large vacation at the expensive of their employer. Additionally, many companies do not allow PTO days to be used on days the employee does not typically work.
What is notice in advance?
Requiring your employees to give notice in advance is critical to maintaining operational stability. Every manager can think back to a time where they received a phone call at midnight or 5:00am of an employee requesting the next day off paid. Remember, there is a tradeoff that is supposed to happen with PTO. An employer offers their employee PTO, in return the employee gives their employer advance notice of when they plan to use it so that it does not disrupt business processes. A manager cannot be afraid to say no to PTO if it is going to cause a problem the next day. We recommend requiring employees to request off 2-3 weeks in advance.
Uniformity and Rigidity
Perhaps the most important tip we can give you is that all PTO Policies must be handled and enforced with uniformity. Understand that you cannot allow one employee to bend the rules and another to abide by them. Even the best of intentions can reek of favoritism or unethical practices depending on the perspective.
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Michael Chiovitti, Chief Talent Strategist
Eden Resources, LLC
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