Limiting Vacation Time, Increasing Productivity – An Argument Gone Mad (A GMAT Practice Essay)


Productivity model (Saari 2006)

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The following appeared in a memorandum from the human resources department of Diversified Manufacturing:

“Managers at our central office report that their employees tend to be most productive in the days immediately preceding a vacation. To help counteract our declining market share, we could increase the productivity of our professional staff members, who currently receive four weeks paid vacation a year, by limiting them to a maximum of one week’s continuous vacation time. They will thus take more vacation breaks during a year and give us more days of maximum productivity.”

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The Human Resources department of Diversified Manufacturing has noted that employees are most productive immediately preceding their vacations, and proposes to increase overall productivity by setting a limit on the maximum number of days an employee may take during any one vacation period.  Their flawed argument reasons that by limiting the length of individual vacations, employees would then take more vacations, proportionally increasing their most productive times of the year.  Although at first glance this may seem a reasonable solution, it would surely prove ineffective and Diversified Manufacturing would find itself less productive in the end.

Currently, employees take vacations as they wish, but only those vacations lasting longer than one week would be affected by the new (proposed) policy.  In the case of a two, three or four week vacation, employees are sure to be extra productive in planning to away from the office for so long.  Several weeks is a long time to leave work unattended, and preparations need to be made in advance – schedules should be arranged, back-up responsibilities set and customers notified of any future changes, temporary though they may be.  Were all the workers limited to one-week vacatons, many of these preparations would no longer be necessary, as there are less likely to be urgent requirements during the mere five business days the employees would be away from their desks.

Also, human nature shows that while an employee who seldom takes vacation will be diligent about securing their responsibilities while away from the office, the same employee will be much less inclined to do so if he is taking vacations more frequently.  If an employee who had previously taken two, two-week vacations annually suddenly switched to quarterly week-long retreats, then she would feel less obligated to prepare for her absence, which would become a more common occurrence.

Finally, putting limits on employees’ vacations would undoubtedly create a negative atmosphere amongst the workers.  Allowing them the freedom to use their vacation time as they wish is considered a perk at Diversified Manufacturing, and setting limits on that freedom would do little to incent workers to be more diligent about covering their responsibilities while away from the office.

It is true that DM needs to take action to counteract declining market share, and it does seem that there is bandwidth for increased productivity from the workers.  But rather than taking a drastic, ill-advised action to change vacation policy, other incentive plans should be investigated to determine the optimal way to increase employee productivity.

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