The problem with unlimited vacation time is that people are afraid to take more than their co-workers, so people take less vacation overall, as has been shown in study after study. Ours appears in our time sheets as overhead and is not differentiated from other non-project hours, so it makes productivity and utilization rates look lower than they should be, also--which is problematic when one's utilization rate is a formal goal, and is used as a basis for determining raises and bonuses, as well as decisions about RIFs.

//