There's a whole book that goes much deeper into this subject: "Slack" by deMarco (of "The Mythical Man Month" fame. Edit: Crap, it was "Peopleware", thanks for pointing it out) It describes some negative effects of 100% utilization efforts. The funniest one is that the workers quickly adjust to the 100% utilization metric and achieve it by slowing down so that their inbox is never empty.

Google Books link: http://books.google.pl/books/about/Slack.html?id=563gvssRPvk...