As a manager, would it be wrong to create secret PTO so that I can keep my star employees?

Question

I work for a large corporation that has really inane rules about PTO (Paid Time Off). For example:

• We don't get a ton to start with, and if you don't use all of it, at the end of the year it goes into a vesting bank that comes back to you over 4 years. This is me explaining it without using terms HR invented like "time resource allocation". Almost no one understands how this works.
• The PTO system depends on your role as well as what PTO level you were able to negotiate at hiring. These levels exist like "E4" for Engineer + level 4 PTO. This level has nothing to do with compensation or anything else in the company. You can't see your PTO level and HR won't tell you, but there's a spreadsheet that HR has that dictates these levels as well as when you're able to go to a new level. They show this to us with the data redacted to explain why someone isn't able to receive more PTO. Managers can submit requests for employees to go up a level, but we can't see what they're at currently and it's at HR's discretion to approve this. It's against the rules for an employee to have a PTO level 2 more than their manager too.

Other than this, I like working here and so does almost all of my team. We get interesting projects and we're able to work as a pretty independent team getting along really well IMO. But the PTO system is pushing away some of my best co-workers to other companies.

I'd like to tell my employees that they're welcome to take time off and only inform me, not submit PTO. I think this will be fine since we work as a pretty siloed unit and we have a good level of open communication. Is this a bad decision, either ethically or managerially?

Answer 1

I'd like to tell my employees that they're welcome to take time off and only inform me, not submit PTO. I think this will be fine since we work as a pretty siloed unit and we have a good level of open communication. Is this a bad decision, either ethically or managerially?

It depends on the laws in your locale, the company culture, the presence or absence of a union, salaried versus hourly, what you think upper management would say if they found out, etc. In the US, managers typically have a lot of discretion in these matters. In other locales, it might be illegal.

In almost every company where I worked (all US-based, except for one), I have taken this same approach. On occasion, I've specifically told folks on my team to "disappear" for a day or two, keep it to themselves, and not submit any PTO. Sometimes, it was after a lot of weekend or after-hours work. Sometimes, it was due to a family issue that needed their attention. Sometimes there were other reasons.

In all cases where I've done this, I knew my boss would agree with my approach. In these companies, upper management trusted managers to do the right thing and not abuse it.

In a few megacorps where I worked, this sort of thing would be frowned upon. But I knew that, so I didn't take this approach.

So ask yourself what kind of company you have, how much they would trust your judgement, and decide accordingly.

Answer 2

If this really is a problem to your organisation, as you say, star performers leaving the organisation due to the PTO policy you should raise this up the chain.

Please do not go ahead and create your own secret system, this will come back to haunt you and the buck will stop with you.

If you can't change the policy are there other ways you can reward star performers in your team which already exist in your framework? It sounds like they can't take all their time off anyway as it keeps rolling over.

Answer 3

This question is equivalent to another more important one, one that can answer a lot of these kinds of questions:

What is your job as a manager?

Because there are (at least) two different answers to that question:

1. My job as manager is to achieve business goals
2. My job as manager is to follow/enforce the rules.

Realistically, most of us will need to do both. But every place I've ever worked at/seen/heard of it was usually pretty clear to a savvy player which one was more important for that specific manager role at that company.

If #1 is more important then, while perhaps not unilaterally empowered to chuck established procedure out of the window, you have a powerful retort when questioned, namely "**** you I'm getting **** done leave me alone so I can get back to making us money".

You should know if you work at a place like probably by the time you finish your probationary period. You may know it before you finish onboarding. If you take this route you are betting your team's awesomeness against the likelihood of having a legalist rules-lawyer you. The productivity/revenue had better be there to back it up. That's a roll of the dice you will need to decide whether or not to take.

If it's #2 and/or your piece of the org is not directly connected to a significant revenue stream (and likewise you should get a feel for this pretty quickly in a given org) then don't even try.

Answer 4

This is a bad idea.

Sooner or later the powers that be will find out. When that happens there's a good chance that not just you, not just the subordinates who participated, but all of the people under you will get sacked because they're unable to determine which of them were conspiring with you to cook the books and defraud the company.

Answer 5

This is illegal. It's fraud. The company pays an employee to work. If they don't, but claim to have done and take the money anyway, that is fraud. If you intentionally cover for them, it's fraud, too.

You could as well steal money directly. It's a lot less work than setting up a system for it.

Yes, the company's system is beyond stupid. But if you don't like a stupid policy, you try to change it and if you cannot, you leave for a company without it. You do not commit fraud.

Answer 6

the PTO system is pushing away some of my best coworkers to other companies.

I would focus on this point and start developing some actual financial data that gives some "management friendly" way to understand that the existing policy is having a real cost. My experience is that you get nowhere without putting numbers on the issue, preferably monetary units.

So :

• How much it costs to hire new staff
• How much it costs to let new staff leave
• Is this costing us more in terms of pay increases people want to suffer the madness (excuse me policy) ?
• How long does it take to train in new staff even if they're experienced - there's always an overhead here.
• Are we loosing potential future senior managers because they're leaving for more transparent and saner policies ?
• How many staff have complained about the non-transparency of PTO ?
• How many potential employees are actually put off by this non-transparent system ? Could the company be losing out in recruitment because of it ?
• A lack of transparency breeds suspicion and may be feeding jealousy among staffers. Even publishing the algorithm might solve this problem.

There are a lot of quantifiable ways to consider this.

However note that as HR have a secret method of calculating these things they will always respond that that they've included this is their calculations without proving it. Secrecy is self proving in that you never have to reveal anything.

So expect to be at war with HR who won't want to lose their power. It will be about power to them. Your monetary damage might sway managers outside (and hopefully above) HR but probably never impress HR.

Other than this, I like working here and so does almost all of my team. We get interesting projects and we're able to work as a pretty independent team getting along really well IMO

I have to tell you that this on it's own is not all that common. Many large organizations are run by formula and they don't like independent teams at all. They like rigid and inflexible plans. I sometimes felt that all my managers would watch carefully to make sure that absolutely no-one had anything interesting to do. So maybe a crazy PTO system is a small price to pay ? Think about it.

Answer 7

I think it comes down to time sheets and charge codes. A lot of companies obfuscate this -- salaried employees may not even have a time card, or they just fill in some general category -- but someone somewhere is counting beans, and charging customers based on work done and salaries paid.

If the company wants to throw a party and have everyone attend, they might direct us to enter a charge code that's like "General". Some catch-all where we let the bean counters know that we worked this day and it's billable to the company itself. If I simply took the day off of my own accord, then what do I charge it to? "General"? Or the project code for the thing I'm working on, which ultimately is going to bill the customer? I'm certain the customer is not intending to pay for bonus PTO.

If your company was exactly like mine, I'd say you could raise the issue with management and ask for X hours of general charge code per month that you can hand out as rewards. No problems then. The company pays for their time off, just like PTO, but out of some general slush fund. (Or you could just do it, I guess, tell them to charge it to that general code so that it's company funded, and try for "easier to forgive than ask forgiveness", I suppose. Then it's only unethical in the sense that you are rewarding employees with rewards that perhaps were not within your authority to give.)

The worst thing you could do would be to give employees PTO and end up billing some project for it, especially if that project is an external customer. Then you've definitely made it unethical.

Answer 8

In addition to the other reasons for not doing this, there is also the legal liability to which you will exposing your company.

If there is any disparity in the way that you treat your reports, and that disparity happens to correlate with membership in any identity group, guess who now bears the burden of proving that your decisions were not motivated by that specific factor?

Answer 9

If you've got to the point to need to create such a system, it likely means the company you're working for is broken beyond repair.

Just find a better company, and lure the star employees to move there with you.

PS: you **REALLY** should have added the country you're in to the question.