[dworin]

Like most things in business, the problem isn't with the policy, it's with management. If you create a culture that frowns upon employees taking vacation time, it won't matter if you give them unlimited vacation or only two weeks, nobody will take it. And if you create a culture that values rested, refreshed, happy employees, the total number of days isn't nearly as important.

With that said, when unlimited vacation time is implemented well, it can be amazing for both the company and employees for a number of reasons:

1) You don't worry as much about things like sick days or one-off PTO. Work doesn't always follow a 9-5 schedule, so if you end up working 60 hours in four days, you can just take Friday off - it feels like less of a big deal if you don't have to worry about 'losing a day.'

2) Do you need to leave early to make a flight? Don't worry about entering it into the system, just do it.

3) If people are legitimately sick, they won't come to the office and infect everyone out of fear of 'using a sick day.'

4) Holidays get a lot easier. Do you not mind working between Christmas and New Years, but want to take time off for Eid/Rosh Hashanah/Diwali/Festivus/whatever? All of a sudden it's not a big deal. It's also great for parents, who don't have to worry as much about child care if their kids have random day off of school.

5) You can take a 'big trip' without losing all your days. The consecutive days, rather than the one-off long weekends, are the bigger issue for a company. I've actually found it easier to take a long trip when I didn't have to worry about losing all my days.

Companies are nervous about this arrangement because they worry employees will abuse it, but again, that's a management issue. You have unlimited vacation time as long as you are getting your work done. If you're taking so much time the work isn't getting done, then the issue isn't vacation time, it's a performance problem, the same as if you showed up every day and just played on facebook.

Because the management piece of it is so important, there are also things companies can do to make a system like this work better:

1) Create a mandatory 'real vacation' by requiring employees to take at least a week off, in a row, once a year. If employees feel like they can never take time off, they'll get burnt out and you'll lose great people. If you make a vacation mandatory, people will feel more comfortable taking the time, and the company will reap the rewards of happier, clearer thinking people. Plus, many people, especially in creative or professional jobs, get inspired when they're able to step away from the day to day for a little bit.

2) Make telecommuting easy, so that employees can still check in even if they're not in the office. Sometimes, people only really need a half day, but don't mind sitting on e-mail in the morning. Or they have their kids around all day and would love to get the opportunity to talk to some adults. The important thing here is to be flexible, and make sure that telecommuting doesn't become "we can make you work wherever, whenever, even on vacation."

3) Have real performance management. This isn't about annual reviews, it's about managers that provide ongoing, regular feedback about how employees are doing against the company's goals, help them understand when they're falling short, and work non-performers out of the organization. Top performers will get turned off by anyone abusing the policy, even more than management.

[kelnos]

Create a mandatory 'real vacation' by requiring employees to take at least a week off, in a row, once a year

Great idea, but I would argue a week isn't enough. Require employees to take a minimum 2 or 3 weeks off per year, not necessarily contiguously.

Although, I can also see this as a bad thing. It might create the impression in people's mind that "the company thinks that X weeks is the right amount for everyone to take off", which might make people hesitant to take more, even if doing so could greatly benefit their state of mind.

[ghshephard]

Do you work for a company with unlimited vacation? While we have 'unlimited vacation', our sick policies went from no tracking to a limited number of sick days per year.

After being on it for a year, I would prefer to go back to the 'guaranteed 12 days a year'

[dworin]

I own my own company now, but I've worked at both companies with unlimited vacation and those with a set number of days. Allowing unlimited vacation but tracking sick days seems strange - how do you define the difference, and why do they care?

I've also found that once you're in a system, change makes it worse even if it's too a better system. If you go from unlimited to a set amount, you feel like someone has now capped your time and is watching you (even if the cap is so high you would never hit it). If you had a set number of days and they switch to unlimited, you feel like now you don't have a guaranteed amount of vacation. The loss aversion is really strong.

[ghshephard]

We went from "Unlimited Sick Days" to a set amount, and the general reaction was, "How on earth could anybody require so many sick days." (Answer, the number is the dividing line between, "Sick Days" and "Short term disability")

On the flip side, when you have a set amount of vacation, there is a nice "target" for you to take, with a hard number appearing on your paycheck every two weeks reminding you.

[Simucal]

That seems like an odd thing to do when employees have unlimited vacation time. "Oh, I'm out of sick days? I'll just take a vacation day then."

[ghshephard]

Vacation needs to be negotiated in advance with your manager, and you need to make sure all your projects are taken care of. In theory, your manager can't deny you a sick day, and they don't need to be negotiated.

[CWIZO]

Can you explain why people are afraid to take a sick day?

I'm not from the USA, so this might be a cultural thing or things just work different where I'm from.

Also, since I'm moving there, does this apply to the UK?

[summerdown2]

It doesn't apply to the UK. If you're sick, be sick. You'll be paid, too.

A few caveats:

1. The above is for permanent positions. If you're a contractor the rules are different.

2. The above is true once you're through probation, which might be the first six months.

3. I have no idea what it's like in startups. I've only ever worked for big companies or the government.

But in general, sick leave is a benefit like a company car or flexible working. If it's in your contract, no one will mind you using it.

A point about holiday leave, too. In the UK, it's usual to take holidays. Everyone does, and then we talk about them in the office afterwards. It's considered part of being a rounded human being. Most holiday entitlements don't roll over, either, so if you don't use your 30 days (for example), you lose the remainder. This means there's a bit of a scramble to get them used up before rollover day. Everyone does this, and you'll be looked upon as a bit peculiar if you don't use the holidays you're entitled to.

[stdbrouw]

A lot of companies in the US either give you a fixed amount of sick days – they won't fire you if you go over, but you won't get paid – or they consider paid time off and sick days to be equivalent, and so if you're sick for a week, you're seriously eating into your vacation time unless you can afford to go on an unpaid leave (and your supervisor lets you).

Dunno about the UK.

[ghshephard]

Some companies, (I think Cisco is one) - gives you a "bucket" of days to use how you wish, Sick Day, Vacation Day, whatever. So, using up a sick day just means one less vacation day.