Yes, not just "allow", I would actually encourage them. I don't manage people, but have been in tech lead roles. I encouraged co-workers and reportees to exper

Yes, not just "allow", I would actually encourage them. I don't manage people, but have been in tech lead roles. I encouraged co-workers and reportees to experiment and learn things outside of what was required for employer's work. IMO, side projects always help expand technical skills. They usually also drive people towards improving their social or communication skills. An employee whose feelings of freedom and autonomy have been encouraged by a company is usually a happier productive employee. It also brings second order benefits for the employer - such an employee is more likely to describe the employer as providing work satisfaction and recommending them in their social circles. I have experienced both types of employers - the open-minded ones, as well as the paranoid/narcissistic/control freak types. I have good things to say only about the former. Just adding a productivity/work satisfaction angle here, because most answers so far seemed to be from the perspective of legality.