Accrued Vacation Policies Are Better Than Unlimited PTO

The problem with unlimited vacation days is that it creates a bimodal distribution of usage—some employees take too little time off and some employees take way too much time off. At worst this creates resentment between employees and unwritten rules about when one should take time off.

Having an accrued vacation days makes taking time off explicit. It encourages people to take time off otherwise they could lose it. In the event they leave the company, they will get paid for unused vacation days.

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