Take as many vacation days as you like, whenever you like. Work from anywhere, anytime. Use your judgment to determine your schedule, as long as you get your work done. Does this sound like your dream job’s vacation policy? It’s a reality for a growing number of employees who work for companies with “no-vacation” or “open-ended-time-off” policies.

Companies who have adopted an unlimited vacation policy have stopped officially tracking their employees’ days off, trusting them to make decisions about their schedule. Employees no longer receive a guaranteed number of vacation days or accrue their time off, as in a traditional job, but they may take vacation as long as they get approval and ensure everything runs smoothly while they are gone.

According to a 2011 Society for Human Resource Management study of 600 employers, only 2 percent of employers offer this kind of results-only environment, where employees are given control over where and when they work and are evaluated on the results they produce. This small percentage includes some well-known names, however: Netflix, IBM, Morningstar, Motley Fool and HubSpot.

The Argument for an Unlimited Vacation Policy

Proponents of this approach believe it shows trust in employees’ judgment and builds employee engagement and retention. The idea is that employees work hard, often putting in time above and beyond the standard 40 hours a week, and they should be able to decide when they need to take time off. Theoretically, in a stable, well-run workplace, employees will regulate their own schedules and not abuse the freedom of the policy.

From the Austin American Statesman:

“Our new vacation policy is that there is no vacation policy, no paid time off forms, no vacation rollover, nothing,” Brian Halligan, HubSpot’s CEO and founder, wrote on his blog. “If people want to take time off, they can take time off. … We hire very smart people who are very focused on contributing to the growth of our company. We trust that the folks will use ‘common sense’ with regards to taking an appropriate amount of time off.”

Halligan said most companies’ vacation plans are relics “of an era when people worked 9 to 5 in an office, like our fathers did. The Internet and mobile devices have enabled our employees to work where they are comfortable (often at home) and the hours they are comfortable (often in the middle of the night).”

The Argument Against an Unlimited Vacation Policy

Critics of no-vacation policies argue that employees are never really allowed to take a break from work because they are often expected to be in touch, via email or smartphone. They say that because employees must keep an eye on work projects even while on vacation, these policies are actually detrimental to work-life balance and employee engagement.

From the Wall Street Journal:

Although Jason Evanish of Boston had unlimited vacation time at a previous employer, “it was really hard to walk away,” because staffing was so lean, he says. Even on the few vacation days he took, “you’re always kind of stressed, not only because you’ll have a tremendous amount of work when you return, but because you worry about holding back other members of the team,” says Mr. Evanish, co-founder of GreenhornConnect.com, a website for entrepreneurs.

Some companies, like Hulu, are trying to find a happy medium: a model that gives employees more freedom but avoids the tendency to work around the clock.

From CNN:

Some companies like the idea in theory, but are adjusting the model. Hulu, for instance, is in the midst of a massive review of all its workplace policies in order to make the company less bureaucratic and give employees more control. It has studied Netflix’s model, but it has decided not to copy it entirely. That’s because Hulu employees expressed concerns about doing away with tracking vacation time altogether, says John Foster, Hulu’s head of talent and organizational development. They were worried that there would be pressure to mimic managers’ work habits, he says. “If they’ve got a workaholic boss, without the vacation policy, there’s no leverage over their bosses,” says Foster.

Would you want an unlimited vacation policy in your workplace? Do you think it would contribute to better employee engagement or have negative results?