Like anything in life, replenishing your body and mind is the best way to maintain productivity. While many European lifestyles seem to be more reflective of this point of view, it's no wonder why so many American's adapt a different attitude towards fast paced working environments after visiting these countries. There is no doubt Americans are a workaholic nation. We thrive on keeping pace and filling every hour in our days to feel more accomplished or maybe more complete. Still, increasing vacation time still won't balance out the over ambitious and workaholic environment we've created, but it can help overall.
I believe employers will get more out of employees if they have longer vacations as they are more likely to feel rested and have more time during the year available to do thinks that they want / need to do rather than trying to do them at the same time as working
Employees like to feel appreciated and valued at a company. If they are only given a few vacation days, it makes them feel like the only way the company sees them is in the form of dollar signs and not people who have families they would like to spend time with.
There have been many studies done that employers ignore, and they all point to one thing: you will get good work out of happy employees. Good working conditions, breaks, perks, they make people happy to come to work and happy and greatful they have such a great job. They want to do well because they like it.