Unlimited vacation time is better in theory than in practice

August 27, 2013
August 27, 2013

It is a vivid illustration of our 24/7-work culture that most Americans do not use all of their allotted vacation days. This is especially sad considering the large number of Americans who are not eligible for paid time-off; the US is one of a few countries that lacks a federal law requiring vacation time. Even those employees who do take time off from work are still largely tethered to the office.

Numerous studies have found that time away from the office and more frequent vacations lead to greater productivity, improved job performance, and lower levels of stress. Time off from work gives us an opportunity to rest and recharge, which in turn makes us more creative and resourceful once we’re back on the job. Most of us already know this from personal experience but now there’s data to back it up (paywall).

Some companies are beginning to take a pro-holiday stance. Netflix, Best Buy, and a growing number of technology firms have begun to offer unlimited vacation time to their employees. “It seemed silly, really, to track vacation time when we don’t track the amount of time employees work after the normal workday,” Vivian Vitale, executive vice president of human resources at Veracode, the application security company that offers this perk, told the Boston Globe recently.

The problem? Most employees are not taking advantage of it.

Unlimited vacation time may sound wonderful in theory, but in reality, less is more. Too much choice is restrictive and confusing. Sheena Iyengar, a professor at Columbia Business School, calls this phenomenon “choice overload.” Some of her past research shows that when employees are deluged with too many mutual fund choices it overwhelms them to the point of paralysis. They become risk-averse or unable to make a decision, which leads them to either make a low yielding investment choice—or, worse, not sign up at all.

Similarly, when vacation time is offered as an unlimited resource many people decide not to take advantage because it’s too hard to figure out the right amount to take. At a time when many top-level professionals view the traditional 40-hour work week as a “part-time” job that amounts to “career suicide,” according to a 2011 report by the Center for American Progress (pdf), unlimited vacation time may be more confusing than helpful. Many people, of course, could benefit from more time off, but employees need guidelines. A mandatory minimum of two weeks of vacation might be a good starting point.

Some employees, it should be noted, are perfectly happy to live and breathe work—in fact they seek it out. The Wall Street Journal recently ran a story about Enplug, an advertising-technology company based in Los Angeles, that rents a house where 10 employees live and work together. “This practice is not uncommon, as many startup companies have combined their workspace and living space to save money and increase production,” notes the Journal.

“We don’t try to separate work life from our personal life,” says Nanxi Liu, the 23-year-old co-founder and CEO of the company. “It’s a little bit cultish.”

For a particular time of life, in your 20s, say, completely combining your personal life with your professional one could work out just fine. You’re young, you don’t have many responsibilities yet: no mortgage, no children, and no spouse. You’re also highly motivated and so working in this kind of environment could be fun and creative—not to mention a great cost saver.

The trouble is that it could develop into an unhealthy lifelong pattern of workaholism, where people’s entire lives revolve around the office. It will be hard for those people to form and maintain good personal relationships. It will be a detriment to the neighborhoods in which they live because it leaves them no time to participate in community building activities. It could also literally make them sick. On top of that, it is not likely to be an effective or efficient way to accomplish innovative and creative work.

For maximum productivity combined with personal well being, we need more time-outs, and more time away from the office. Employers can help by demanding that people take vacations, and modeling this themselves. But allowing unlimited vacation time will only work if reasonable norms are established and acted on by executives and managers as well as their subordinates.

Follow the MIT Sloan School of Management on Twitter @mitsloanexperts. We welcome your comments at ideas@qz.com.

Top News

Powered by WordPress.com VIP
Follow

Get every new post delivered to your Inbox.

Join 23,710 other followers