Unlimited Vacation Policies Can Make Taking Time Off Kind of Awkward

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Working at a company that allows its employees unlimited vacation — as Netflix and Evernote reportedly do — sounds like heaven. No more stressing out over saving up your paid time off; no more harboring secret resentment at having to use most of it on your friends’ destination weddings rather than a trip overseas. You have as many days off as you want! But human psychology works in strange ways sometimes: While you’d expect an unlimited policy would result in more days off, it can sometimes do the very opposite, resulting in fewer vacation days, especially for the employees with the biggest workloads.

This was the case, anyway, at one tech company in Berlin, writes Mathias Meyer of the firm Travis CI in a blog post today. Meyer expected that the unlimited vacation policy the company instituted would help employees better balance work and home demands. What actually happened was this: 

When people are uncertain about how many days it’s okay to take off, you’ll see curious things happen. People will hesitate to take a vacation day as they don’t want to seem like that person who’s taking the most vacation days. It’s a race to the bottom instead of a race toward a rested and happy team. 

What you will do is push people to the edge of burnout and unhappiness. They’ll eventually leave your company. … This almost happened in ours, we pushed someone too far. They pulled the cord eventually, and we asked them to take off as much time as they need. We’re sorry for this mistake, [and] we’re thankful this person is still with us. 

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 reversedpolicy 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.

The effect of unlimited vacation is closely dependent on cultural norms; in the U.S., for example, most employees don’t take all their allotted vacation days, anyway. But there may be ways to make an unlimited policy work: At Evernote, reported the Washington Post, employees forfeit a $1,000 bonus if they fail to take a week off during the year. As for Travis CI, which is located in a vacation-loving country, it’s switching to a minimum vacation policy, requiring each of its employees to take at least 25 days off per year. (Incidentally, as Meyer notes, they are hiring.) 

When an Unlimited Vacation Policy Backfires