[jfb]

This happens regardless of the policy. You can't worry about the edge cases -- some people will always think that, for whatever reason, they are irreplaceable or are in continual danger and will not take the breaks that they ought.

[mdkess]

Which is why I think that having a guideline is important - if only to set the expectation when you join the company.

If a company had a "no vacation policy", and when pressed about it, they said "just get your work done - we don't track vacation time", how much vacation time would you plan to take in your first year there?

When you're there, you realize that nobody ever takes vacations. Can you still justify that three week long trip to Asia that you had planned? I mean, you can always find a new job, but you've already sunk a ton of time into the company. If instead they said that you get three weeks, at the very least you get paid out for it when you leave. It's also easier to get a direct answer for "do people take their vacation time?"

As an aside, but I think your point "they [think they] are irreplaceable or are in continual danger" is a pretty good point for encouraging extended vacation - if you can't survive for two weeks without someone on your team, something needs to change, and that can be a good way to identify those people.