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Tech startups celebrate the long hours required to produce their offerings. To ease the load, there might be ping pong tables and free food on site. But those perks can be seen merely as lures to stay at the office instead of going home at a decent hour.

Basecamp is different. The founders of the company, formerly known as 37signals want their employees to embrace a sustainable lifestyle in order to be around for the long term instead of burning out. So after they realized staff weren't taking sufficient time off, they began giving their employees vacations funded by the company to nudge them to recharge. As well, from May through October, everyone who has been with the company for more than a year works a four-day week instead of five. And to make sure employees eat properly, the company offers a stipend to buy fresh produce from a community-supported agriculture program.

"The key mission of a manager is to protect the people who work with them," explained David Heinemeier Hansson, one of the partners at the firm. "A lot of managers think their mission is to whip everyone into shape – that without rules and long hours, everything will fall apart. We find the opposite."

The philosophy traces back to Mr. Hansson's own experience when he joined Jason Fried at the Chicago-based fledgling company 13 years ago, to provide programming for the project management application called Basecamp. Living in Denmark, his work was done from abroad, and so he remains fond of working remotely, for himself (he spends most of the year in California and Spain, although he has a dwelling in the firm's hometown of Chicago) and for his employees.

But more importantly, as a student at Copenhagen Business School who was also doing consulting, he could only devote about 10 hours a week to the programming – not 10 hours a day, or more, as is the custom in startups. Yet in five months, the application was ready, and the fact that about 50 million people have used it and the company now employs 47 people suggests that excessively long hours aren't needed to produce something effective.

"A lot of people feel you need to work crazy hours to build a business, but that isn't necessary. And if you want to do this work for the long term, you need balance. We knew from the start we wouldn't sell the company. To run it for 20, 30 or 40 years, you'd better set it up with some patterns that are sustainable," he said.

We lose balance by succumbing to what he calls deferred living: Work hard today for a better tomorrow, upon retirement. "I don't buy that split-up of life. I want to pursue my hobbies in my 20s and 30s, not wait until I am in my 50s, when I pick a hobby, inevitably golf," he said. While in Spain, for example, he spends mornings and the early afternoon with his family, before turning to work as colleagues in the Chicago office are waking up. He likes photography, and is also a professional race car driver. He'll take part in this year's Le Mans 24-hour endurance event for the third time, as part of a three-person Danish team.

Originally, the company had a policy that staff could take vacation at will – the only requirement was to let colleagues know ahead of time. Many managers would fear that employees would slack off, taking long and frequent vacations. But it was quite the opposite. The average employee was taking two weeks, fewer than the founders believed was sensible.

The reasons tended to be flimsy excuses about never getting around to planning a vacation or not being sure where to go with their families. So the partners brushed away the excuses by working with a travel agent to come up with packages each year – funded by the company – that fit the needs of employees with different family arrangements. All the employee needs to do is pick, and then pack.

The packages are each worth about $5,000, so for an employee with a family that usually provides about one week away from work while for a single person it might extend to a few weeks. It makes clear the value the bosses place on vacations. And Mr. Hansson believes it pays off in the creativity and energy when people return.

The four-day week through summer also spurs creativity, along with balance. Programmers will usually take Fridays off, while in areas like customer service, staff have to sprinkle their days off throughout the week to retain consistency for clients.

Every three years they have been with the company, staff can take advantage of a one-month sabbatical to learn a new skill, explore a project that intrigues them, or simply relax. In addition to the stipend for fresh produce, the company offers money toward fitness, be it taking a yoga class or fixing the employee's mountain bike.

"When you add it all up, it seems excessive but I don't see it that way. We see people come back from vacations and sabbaticals recharged. It's gratifying as owners to see they are feeling better and eating healthier – and we see the improvement in their work," he said.

Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter

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