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Unlimited vacation policyImagine having the freedom to tell your boss that you plan to take an entire month off this winter to go skiing — and he’s okay with that. Or deciding on Thursday night that you’re going to head to Vegas for the weekend, and your boss just tells you to have fun.

If you work for a company with an unlimited vacation time policy, that could be a reality. The principle is simple: As long as work is done and deadlines are met, workers are free to take as much vacation as they wish. No need to request time off from HR or cram their vacations into the allotted two weeks. Workers have the freedom to take off and come back whenever they wish, as many times a year as they want. However, while letting employees take as much time off as they wish has some benefits, it’s not right for all companies.

Unlimited Vacation: The Pros

The first question that anyone asks when investigating unlimited vacation is inevitably “Do people take advantage of such a lenient policy?”

Those companies that have such policies invariably answer with an emphatic “No.” Most point to the fact that such policies are built around accountability. Employees know and understand their responsibilities, they know what needs to be done, and most will not head out on a three-week vacation in the middle of a major project or the busiest time of the year. Those employees who do abuse the privilege are generally either quickly reprimanded, or don’t last long within the organization. Quite simply, taking too much vacation affects performance.

At the same time, unlimited vacation also improves performance. Experts note that when employees are limited to the standard two to four weeks of vacation time, they are often stressed and resentful. Instead of taking off for a week at the beach during the summer, they are forced to take time off during their children’s school vacations instead, or they have to compete for the same coveted vacation weeks with their coworkers.

When they have unlimited time, it’s possible to spend a week with the kids at Christmas, and take the beach vacation in the summer. Employees are more satisfied, and companies find that they are more creative and productive when they have enough time to recharge.

HR pros also note that an unlimited vacation policy takes some of the hassles out of scheduling and accounting for employee vacation time. Instead of wading through requests and making sure that no one takes more time than they are allowed, vacations are handled informally via departments. Experts note that most salaried employees don’t track their time anyway — most people work far more than the standard 40-hour workweek anyway — so why put all of the time and effort into tracking vacations?

Problems with Unlimited Vacation DaysThe Dark Side of Unlimited Vacation

While unlimited vacation time has its benefits, it also has its downsides — and they probably aren’t what you think.

First and foremost, not only is it unlikely that employees will abuse the system, there’s a greater likelihood that they won’t take vacation at all. Because there isn’t any clear guidance on how much time off is really acceptable, and when it’s okay to be out of the office, many employees err on the side of caution and take less time than they would if they had a “use it or lose it” two weeks.

Compounding the problem are managers who rarely take vacations — or when they do, they “check in” with the office every day — and effectively set the same expectations for their teams. The result? Overworked, overtired, and stressed employees who resent the fact that they can’t take advantage of their paid time off.

Is It Right For Your Company?

The question, then, is whether instituting an unlimited vacation time policy is right for your company. The answer really comes down to culture. Does your company already have a culture of accountability in place? Is there a strong team dynamic of collaboration? Do the managers model work-life balance? If those factors aren’t in place, there’s a good chance that an unlimited vacation policy will not work.

In fact, many experts argue that unlimited vacation policies work best when there are some standards in place. One such policy is to mandate a minimum number of vacation days per year, with flexibility for additional time off based on performance. Other companies have created vacation time flexibility by allowing employees to earn time off based on hours worked and seniority. Those hours go into a “bank,” which employees can then withdraw time off from whenever they wish.

In the quest to keep employees happy, increase productivity, and streamline management, companies are constantly on the lookout for creative solutions. If you’re considering an unlimited vacation policy, take care to determine whether it’s right for your company, or whether you’re simply following a fad.

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