Some companies offer perks to their employees, a reward for sticking out with the company.  After all, in some cases the company invests considerable time and money into employee development. The company may pay to move them.  The company will spend some money on training the employee in the ways of the organization.  I venture to guess that no employee starts the first day with the company at maximum efficacy through the experiences of the intricacies of the position.  So, the company at the start is paying more based upon the estimated return upon their investment than current individual yield.

Some organizations offer two weeks of vacation to the starting employee. In the roughly 52 week year, that reduces the work time to 50 weeks. With an average of 40 hours per work week, the resulting working hours is approximately 2000 hours per year.  Management will use these hours to determine the amount of human capital (or as I like to call it talent) is available to perform the work of the organization.

Consider a company that extends this vacation time or time off based upon the employee’s years of service.  It is not unheard of for the company to increase the amount of vacation time with the employee’s increasing seniority (time) with the company.

Now the planning of our work gets a little more difficult. We can estimate the hours available to the organization based upon the average years our employees have been with us. For example: the average time with the company is 10 years, and therefore each person represents about 1920 hours per year of availability.  Alternatively, we can calculate the total hours based upon each person’s time with the company and sum that up by department.  The latter of these, though it is a little more difficult, is much closer accurate.

If we use 2000 hours expecting our employees to absorb the difference in overtime, we are effectively eliminating the vacation that is part of their employment package.   Think about it, vacation is earned time off, but if you are still working the 2000 hours or close, this is a benefit in name only and not an actual benefit.

Vacation time is at least in part used in a consecutive fashion, that is a few days at a time perhaps a week for Thanksgiving, and overtime is commonly a plus two or three hours here and there, for example a 43 hour work week occasionally.  When the employee’s pay is based upon salary alone the additional 80 hours (two weeks) or more of extra work is effectively negated and therefore is a not really the benefit that was promised. If the employee(s) looks at this in this manner they could equate it to manipulation by management. This could be related to a negative experience (see blog posts “Leadership Equations”) by the employee(s). If we look at Vroom’s Expectance theory this type of managerial expectation could and probably decrease the motivational factor of the more senior employees.

Additionally, when we plan the growth of our organization based upon these overly estimated hours of availability and assume the present staff can manage, we put some of our expected delivered work at risk of not getting completed because we are stretching our staff in a way that is not sustainable.