Why Netflix Ditches Vacation Policies and Expense Approvals — And Why It Works

Imagine a workplace where you don’t have to ask permission to take time off or spend money on business needs. This is the reality at Netflix, where traditional controls are replaced by freedom and responsibility.

The Case Against Rules

Conventional wisdom says policies are needed to prevent abuse and ensure fairness. Yet, Netflix found that strict rules often lead to bureaucracy, slow decisions, and disengagement. Removing vacation tracking and expense approvals entrusts employees to act in the company’s best interest.

Leaders Set the Tone

This model only works if leaders model healthy behavior—taking vacations themselves and openly discussing time off. This normalizes breaks and prevents overwork. Similarly, expense freedom is balanced by random audits and swift consequences for abuse, maintaining trust.

The Results

Employees feel empowered and motivated. Decisions happen faster, and innovation flourishes. This culture of trust reduces stress and increases ownership, creating a virtuous cycle where freedom leads to responsibility, and responsibility reinforces freedom.

Next, we’ll see how paying for excellence attracts the rock stars who thrive in this environment.