Unlimited vacation policies are often painted as a dream benefit that only happens in cushy tech jobs, but I think they're inherently unfair because they're entirely subjective.
It's easy to prove that unlimited vacation policies are anything but: no company would allow you to take a truly unlimited vacation. You can't decide to work only one day a year, at least not without getting fired.
Alright, since it's not unlimited, how much time can you take off?
Instead of being a well-defined value, your time off is instead at the whim of your boss and peer pressure! How many vacation days can you take before your manager starts to feel you're slacking off? How many days until your coworkers start resenting you?
Unlimited vacation policies are a "push your luck" game. You win if you take the maximum number of vacation days with no negative consequences, but like most games not everyone is guaranteed to win.
Confident employees will come out ahead since they'll just take whatever days they want off without a second thought. I'm not concerned for these people.
I'm more concerned for anxious employees, the constant worriers. The worrier will second-guess the length of every vacation, lest they bring down the wrath of the company. The worrier will be concerned that they're missing out on promotions because they went on three vacations instead of two. The worrier will wonder if they're pulling their weight, relative to their peers.
In addition, an ill-defined policy is destined to be inconsistently applied across an organization. My laid-back boss may be fine with me taking six weeks of vacation a year, whereas yours starts cutting you off at just three or four. No amount of confidence will help if your manager denies all of your unlimited vacation time.
All the above problems are created because there is no objective policy; it's all subjective, based on the people and culture of the company. The only way to remove the subjectivity is to codify the amount of vacation everyone gets, at which point you no longer have an unlimited vacation policy.
In my dream company, these would be the policies in place:
Employees are allotted a fixed number of days off. That way everyone knows exactly how many days they are allowed. It is clear what the company finds acceptable.
Employees are required to take a certain number of days off each year. Also known as a minimum vacation policy, I think this is valuable for work-life balance (especially in preventing burnout). As an added bonus, it helps ensure that your company isn't relying on any single employee being constantly present.
Managers can approve special treatment for unique circumstances. A policy shouldn't be so inflexible that people quit just because their plans run afoul of it. For example, if someone needs to dip negative into their vacation days temporarily for an early-year family vacation, then fine!
There is no such thing as a perfect policy that fits every situation, but I think the above is a good starting place for any company looking to treat their employees fairly.
The most common counterargument I've heard, while talking about this topic, is: "but it works well for me!"
This isn't really countering my thesis: I expect that unlimited vacation policies will benefit some employees. The problem is that it will hurt others at the same time.
Regardless, my dream scenario could replace any unlimited vacation policy. Just codify the highest number of vacation days you would've allowed someone with the unlimited vacation policy and give it to everyone. No one would've been able to go above that anyways, so the effect is just that everyone can take that time off, worry-free.
(I expect this idea will make some people shudder. If it does, I challenge you to examine why.)