A CEO who gives his employees $2,000 to go on vacation says there are 5 reasons the policy is good business

Since 2011, SteelHouse CEO Mark Douglas has had two policies that have transformed the way his company operates.

Not only do employees at the marketing and advertising company get $2,000 a year to put toward any vacation of their choosing, but the entire company takes a 3-day weekend every month, which Douglas branded "SteelHouse Days."

He said the policies have been tremendous morale-boosters, but they've also helped attract elite talent and improve the company's bottom line.

Here are several reasons why the policy works so well, according to Douglas.