Why Do Firms Offer Dicey Perks? The Case of Unlimited Vacation

Jiayi Bao, Business Economics and Public Policy, The Wharton School

Abstract: The use of employee perks is becoming increasingly important to organizational competitiveness. Consequently, innovating along the human resource dimension has become a strategy imperative for many firms. Typically, firms introduce perks that are complementary to work. However, another set of perks that makes it easier for people to leave the workplace has gain more popularity over time. These perks, predominantly adopted by the innovative technology industry, are particularly appealing to workers but can also be potentially risky to firms when abused. This project examines why firms offer these dicey perks and when they should do so, using unlimited vacation as a specific vehicle. We address Mack Institute’s research priorities of Strategies for Innovating, Innovation opportunities and risks, and Capturing Economic Value from Innovation Investments as we study how firms make strategic decisions regarding the use of innovative perks under potential risks to better capture economic value from their human capital investments.

Read more about this research at Knowledge@Wharton.

Michelle Eckert is Marketing and Communications Coordinator for the Mack Institute, where she works to engage students, researchers, and corporate partners in opportunities for collaboration. Michelle received her B.A. in Art from Valparaiso University in 2007. Her background includes two AmeriCorps terms of service working to teach mathematics, computer literacy, and job readiness skills to out-of-school youth in Philadelphia, focusing particularly on promoting access to post-secondary education.