On average, each daily smoker and recent quitter took nearly 2.5 more sick days in 2010 compared to employees who have never smoked, the conference board found.
Piala Inc, a Tokyo-based online commerce consulting and marketing company, kicked off the programme in September after an employee complained that non-smokers were working more than smoking colleagues who frequently disappear to light up.
"We don't give punishment for smoking", company spokesman Hirotaka Matsushima was quoted by CNN Money as saying.
The Telegraph reports that Japanese companies are increasing efforts to protect employees from the impact of second-hand smoke, with Lawson Inc, an operator of 24-hour convenience stores, in June banning smoking in its head office and regional offices.
There are a lot of benefits of choosing not to smoke.
Following the suggestion, the company's CEO Takao Asuka made a decision to give non-smoking employees extra time off to compensate, Matsushima added.
However, it's unclear whether those results would translate directly to Japan where 21.7 percent of Japanese adults smoke. For Western New York, that could helpful in combating smoking as both Erie and Niagara Counties are above the state average in smokers.
But beyond giving non-smokers a reward, the company is also hoping that the extra days off are seen as an incentive for others to quit the habit.
Smoking is still quite prevalent in Japan although most office workers must do their puffing in designated smoking rooms and outdoor areas. About 15 per cent of USA adults smoke, according to the Centers for Disease Control and Prevention.
There are many western countries which encourages smoking in restaurants and work areas.
"The time is right for Japan to finally catch up now with the Olympics just around the corner", Douglas Bettcher, WHO's director for prevention of non-communicable disease, said at a news conference earlier this year.