Well, as NYMag.com writes that unlimited isn't actually "unlimited". In fact, when given the opportunity to take off an "unlimited" amount of time, most employees take off very little. Instead of having everyone take off the same amount of time, no one wants to come out looking like a "moocher".
Banking away your vacation time can be annoying, but it does make you feel as if you've "earned" those days off; they're yours to spend as you wish. Compare that to a proposed (and quickly reversed) policy at the Los Angeles Times, which would have done away with all paid vacation, sick, and personal days in favor of an "unlimited" paid time off system — but one in which each day off would be at the discretion of the employee's supervisor, which would undoubtedly have led to employees taking less time off since each attempt to do so would entail a potentially awkward conversation.Bingo. If you "earn" your vacation time, you can easily ask for it off. If it's unlimited, it makes it a lot harder. I currently work at a place with unlimited vacation time but few will take off more than a week or two. And since everyone is doing that, you don't want to be the guy taking 4 weeks.
Of course, that's not the culture everyplace--I spoke to one person who work at an unlimited vacation company and she said that everyone ends up taking between four and six weeks. But that was something that everyone knew was okay and everyone, more or less, held up their end of the bargain.
Two ways to ensure that, the article writes, is to have employees forfeit a bonus if they don't take off a certain amount of time or writing a minimum vacation time policy in the employee manual. Any way you go, if you're going to institute "unlimited" vacation, make sure your employees understand what that means.
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