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Would You Like an Unlimited Vacation Time Policy at Your Job?

Would You Like an Unlimited Vacation Time Policy at Your Job?


By Dr. Marie Gould Harper
Program Director, Management at American Public University

Four months ago, I wrote a blog post on an unlimited vacation time policy and how some companies have implemented it successfully. Recently, Kathleen Christensen, an expert on workplace flexibility, wrote a similar article for LinkedIn supporting this type of policy. The comments on her blog were interesting, especially the ones against the policy.

I would have thought employers would have an adverse reaction. However, there were postings from people who thought the concept was driven by companies’ dislike of paying employees for unused vacation time when those employees left the company.

Okay, I had to step back because I didn’t see that coming. So I decided to write another blog post, hoping to solicit feedback from people who support this train of thought.

Vacation Time: Company Benefit or Liability?

Keep in mind that I am an individual who has zero vacation time left at the end of the year. I have never carried over vacation time and never been paid for unused vacation time when I left a company. I have assisted one organization in crafting a policy whereby employees could purchase extra vacation time from peers or from the company.

Some of the comments in Christensen’s article included the following:

  • Defined vacation is an accrued financial liability for an employer, while “unlimited” vacation has no accounting value.
  • Top performers would not change behavior while poor performers would abuse the policy. The workforce would have to be “cleansed” before a plan like this would work.
  • Without a defined, accrued vacation policy, employers would take advantage of workers during a layoff. For example, older workers would not receive a salary equivalent for “banked” time.

Employer Distrust Is Common Theme in Comments to Christensen Article

When I saw these comments, my initial thought was there’s nothing wrong with the policy. There’s something wrong with some organizational cultures where distrust is the first reaction.

  • Distrust of the organization not being able to ensure that the right thing is done to create a win-win situation for both employer and employee.
  • Distrust of the human resources department and its ability to craft a balanced policy that would see the pros and cons for both the employer and employee.
  • Distrust of the workforce stung by the lack of organizational justice to the point the employees believe poor performers will find the loopholes in the policy and take advantage of the situation.

Questions that came to mind were:

  • How do we build employee trust when an employee’s first reaction is to see the downside of what could be a positive situation?
  • How do we get employees and employers to work together to craft policies and procedures that are mutually agreeable?
  • How do we promote open, authentic conversation so that diverse perspectives are heard, and we don’t create opportunities for individuals with hidden agendas to formulate loopholes?

The distrust issue was the first perception that jumped out for me, but there is another matter that was a close tie – the issue of how employees view their vacation time. Do they see it as a benefit that allows them to have downtime to rejuvenate themselves OR do they view it as a benefit to store up for a rainy day (i.e. a mindset similar to people who like to receive a tax refund at the end of the year)?

To answer that question, we would have to look at employee perceptions and expectations of this benefit. For example, some employees might store up the time because they work for managers who make them feel guilty about taking time off. There’s always a crisis going on.

You might have a group of employees who save up the time because their employer allows them to cash in their time. There’s another group of employees who believe the company will shut down if they take time off. Finally, there is a group of employees who believe that banking vacation time will provide a cushion if their employer makes use of the “at will” clause and terminates their employment without notice.

Well, that question is a new topic in its own right. Stay tuned for a future article.

About the Author

Dr. Marie Gould Harper is the Program Director of Management at American Public University. She holds an undergraduate degree in psychology from Wellesley College, a master’s degree in instructional systems from Pennsylvania State University and a doctorate in business from Capella University. She is a progressive coach, facilitator, writer, strategist and human resources/organizational development professional with more than 30 years of leadership, project management and administrative experience. Dr. Gould Harper has worked in both corporate and academic environments.

Dr. Gould Harper is an innovative thinker and strong leader, manifesting people skills, a methodical approach to problems, organizational vision and an ability to inspire followers. She is committed to continuous improvement in organizational effectiveness and human capital development, customer service and the development of future leaders.



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