Ending Unlimited PTO Doesn't Solve Underlying Workforce Issues

Forbes

08-07-2025

Ending unlimited PTO won't fix poor performance or burnout—honest feedback and a healthy culture ... More that supports time off are what truly matter.
Bolt, the e-commerce technology company, recently reversed its policy of offering employees unlimited paid time off (PTO) and now requires 'mandatory' four weeks of vacation. The reason, CEO Ryan Breslow explained, is that 'when time off is undefined, the good ones don't take PTO. The bad ones take too much.'
Based on my forty-five years in the corporate world, including as chair and CEO of Baxter International, I question whether this change addresses two underlying workforce issues that the Bolt CEO alludes to in his quote.
First, the so-called 'bad ones' taking off too much time is a performance issue, which limiting PTO will not change. Whether someone is off for two weeks, four weeks, or six weeks a year doesn't change the fact that they are not meeting expectations. The only remedy is honest and frequent feedback between managers and their direct reports.
One significant benefit of giving continuous feedback is that it minimizes and, ideally, eliminates anyone being surprised to learn that they are falling short of performance standards or that they are simply in the wrong job. However, when these people receive open, honest, and direct feedback on an ongoing basis, they know that the job is not working out. In many cases, they will leave before being fired.
Equally concerning are the 'good ones' who aren't taking enough PTO. Clearly, there is no performance issue here; in fact, they're probably exceeding expectations. So why aren't they taking vacation? It could be that the workload is so heavy, they fear falling behind if they are out for more than a few days at a time. If so, then it's up to managers to ensure that there is a plan in place to support people in taking off time from work, whether asking others to pitch in or adjusting timelines to ease the pressure.
More problematic is the perception, implicit or explicit, that top performers don't take vacation. This is a culture issue, and it's common to many high-performance organizations.
A case in point, a few years ago Goldman Sachs implemented an unlimited PTO policy for senior bankers. The move seemed contrary to Goldman's hard-driving culture. In fact, according to the New York Times, 'the bank's move hasn't led to much cheering at a place where employees build their careers on being available to clients anytime, anywhere. Goldman, in particular, has long prided itself on that ethos — so much so that its leaders rarely use all their holidays and often forgo out-of-office messages.'
In other words, simply telling top performers that they can take their vacation doesn't mean they will — especially if it goes against the culture.
I'll never forget the conversation I had with someone who told me, with pride in his voice, that when he retired he had 19 weeks of accumulated vacation. That's nearly five months of vacation time not taken! Another friend told me it had been '16 months since I had more than one day off.' The exact number — 16 months — made me think she was keeping score.
If you feel guilty about taking time off because of your work responsibilities, think of it this way: paid vacation time is part of your compensation—one way your employer rewards you. So why wouldn't you take your vacation the same way you accept your paycheck and other benefits?
If you think not taking vacation will earn you a badge of honor, think again. And if you are rolling over vacation days in order to be paid for them when you leave, you are missing out on some significant benefits now, both personally and professionally.
Throughout my corporate career, I worked very hard. However, no matter what my job title and responsibilities were I always took all of my vacation days for the year. Of course, I wanted to spend those days with my family, while also devoting more time to seeing friends, exercising and engaging in leisure activities, and self-reflecting. In addition, I recognized that vacation time actually improved my performance. I also knew that, whether I was the manager of a small team or the CEO running a company with 50,000 employees, when I set the example of taking vacation, people noticed and did the same.
Getting away and 'unplugging' from work helps avoid burnout—a problem that is on the rise in the U.S. affecting two-thirds of people, according to one study. In addition, research shows that people who take time away from work reap significant health benefits. New research published in the Journal of Applied Psychology emphasizes taking several days of vacation at a time results in 'psychological detachment' and increased physical activities 'may be the most beneficial for improving employee well-being.'
Taking vacation helps you avoid the 'I'm irreplaceable' trap, which can stymie your career. To explain, consider a scenario I've witnessed many times. Two managers, Henry and Beth, report to the department head, Ralph. One day, Ralph calls the two managers, telling them he's leaving for New York in an hour and needs summaries of the analyses their teams have been working on.
Henry springs into action. He tells the people on his team that he needs a summary, pronto! As soon as he receives the information, Henry sprints to Ralph's office, rehearsing in his head the brilliant presentation he's about to make that will show just how valuable and irreplaceable he is. Beth has a different approach, which is more focused on developing her team. She tells them, 'Get your notes and come with me. We've got a presentation to make to Ralph.'
Flash forward to when Ralph hears the news that a senior manager is going to retire and needs to be replaced. As Ralph thinks about who could step up to that job, it strikes him that Henry can't be moved because his team can't function if he isn't there. Beth, however, has demonstrated that several people on her team could take over for her. No surprise — Beth gets promoted.
There's a moral to this cautionary tale: If you aren't taking vacation because you want everyone to see how irreplaceable you are in your current job, it may be a self-fulfilling prophecy.
You're off for a week — going to the beach, trekking to the mountains, or even having a 'staycation' to relax with family and friends. Whatever you enjoy doing, you're engaging in some well-earned recreation. Now, think about that word for a moment. Its Old French and Latin roots point to a deeper meaning than merely 'fun.' Rather, recreation is about restoring, renewing, and refreshing — even recovery.
That's a potent incentive to take your vacation and come back to work energized.