Kronos CEO explains why THIS policy makes employees happier and more engaged

"Happy and engaged employees can make a company more profitable, and our policy makes employees happier and more engaged." So says Aron Ain, the CEO of Kronos, a company that offers technology solutions to help organizations manage their workforce. In addition, according to Forbes magazine, Kronos is one of "America's Best Employers." To which magic policy is Mr. Ain referring?

Unlimited vacation.

That's right. Unlimited vacation. Employees of Kronos can take as much vacation as they like.

You would not be alone if you were incredulous about the viability of implementing an unlimited vacation policy. Many people -- on all sides of the issue -- think unlimited vacation is a terrible idea. Business owners and company executives are certain their employees would abuse the benefit. Managers are dubious that any work would actually get done, not to mention how difficult it would be to administer. And employees themselves, especially those who bank unused vacation express anger and disappointment about the cash payout they would lose upon retirement.

While acknowledging those challenges and misconceptions about the practice, Ain effectively argues that the benefits far exceed the risks. After all, any policy that leads to engaged and happy employees is a good thing. Unlimited vacation, not only gives people the benefit of time, but it forces managers to maintain strong relationships with their employees that are built on trust and communication.

Trust, engagement, communication, happiness, these are among the necessary factors that allow employees to drive a business forward rather than drag a company down. And that's when profitability comes in.