"Unlimited" Vacation Misses the Point

Unlimited vacation policies are one of the less traditional management practices that seem to get a lot of talk recently. And I see a lot that seems to miss the point.

Disclaimer: I live in Germany, where laws are a bit different from the US. For example, sick days - even when you get sick during your vacation - don't count towards your regular paid time off bucket. I think the principles that I'll describe still should hold true, though.

What traditional vacation policies really do is define a paid time off budget. Someone, sometime figured out what he thought was a "fair" amount of time per year, and that's what you get. Maybe even a little more, depending on your employer and negotiation skills.

Makes sense? Well, let's do a thought experiment: imagine being self-employed. Imagine that someone - maybe the government - tells you that you should take exactly x days of vacation a year. Still makes sense?

If you are anything like me, you would resist that dictate. You would want to take responsibility for finding the right balance between financial, mental and physical health - of both yourself and your family. Instead of figuring out the right balance once and for all, you would continuously adjust your plans - to your own needs, those of your family and customers, and to the development of the market.

So why does that stop once we get employed by a company? 

I think it shouldn't.

Of course, once you have colleagues and stakeholders, the whole situation becomes even more complex. A fixed time vacation policy reduces that complexity. But it also takes away your responsibility to make decisions that make sense. And that's not a good thing, in my opinion.

What would be needed for a vacation policy to work that doesn't work with a budget? In short, every employee needed to be an entrepreneur who feels equally responsible for himself and his family, his colleagues and the organization. That includes, but is not limited to (pun not intended):
  • every employee having a good understanding of his own needs, the needs of his colleagues and the organization (and being in a constant dialog about it),
  • feeling responsible for creating a good balance between those needs, in cooperation with his coworkers; as a consequence
  • a culture where coworkers hold each other accountable - not only for work results, but also for taking care of themselves, and
  • a culture where the inevitable conflicts are dealt with productively.
So, it's not about removing the limit, letting every employee have "as much vacation is you want", inside a traditional culture of "getting away with as much as I can". It's about creating a culture of "we are in this together", where - as a consequence - such a limit wouldn't make sense.

PS: if your vacation needs to be approved by a manager, you probably don't have unlimited vacation - you have a variable limit that depends on the whim of your manager.


  1. This requires a setup that I don't think most companies have yet. As you noted, vacation is a negotiated benefit. With it becoming "whatever you want", it seems like companies can increase the pressure for you to take less vacation. I see some large companies do that even with the agreed to vacation. "We're busy so it would be nice if you cancel your vacation" (followed by always being busy.)

    Also, don't entrepreneurs tend to mix their "work" time and "vacation" time. Sounds like more of the eroding of personal time so it is all work.

    I can envision how this could work in a small company where everyone focus on well being. I have trouble envisioning it in the majority of companies. What I don't have trouble is envisioning it being used as an excuse to take away vacation.

    1. Yes, in an "it's ok to exploit our employees" culture, this will likely turn into a "less vacation policy". I wouldn't recommend that to anyone.

      On the other hand, if you are serious about wanting to change that culture, a "take responsibility for you own vacation" policy can be a good step, if it's supported appropriately.

      I have worked in a "Results Only Work Environment" team for two years. During that time, I didn't care whether I was working or not. Writing a blog post on Sunday. Reading a book on the train. Going to a user group. Having a great idea during my morning shower. Taking a nap at the office. Important was only if it was the right thing to do at that moment, taking into account the needs of my customers, my company, my family, myself... I miss it.

      It seems like a "we are all in this together" culture works reasonably well for up to 150-200 employees. There are several examples of companies who find that the best thing to do when exceeding that size is to split up.


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