I hired a reputable local company to install 6 foot vinyl fence around my yard. Salesman was telling me how they would be using cement to hold the post in place. To my surprise I see the workers use dry cement mix with no water or sand or anything in the holes for poles. When asked about it, they saying that "water from the ground and rain" will activate the cement and its better to do it this way than pouring wet cement. Is this correct? I even called the company and they said that this is how they are doing it for everyone.
Unless you are in a extremely dry area this is fine.
The concrete mix will absorb moisture from air and surrounding soil and will slowly set. Usually a couple of days is all it takes.
Some rain or a bucket of water will speed up the process, but isn't really needed.
In fact, poured concrete is more in danger off being over-saturated with water, which dilutes the mix too much or flushes part of the mix away.
If you expect the posts to get a lot of lateral pressure while curing (like the fence catching a lot of wind) you may want to speed up the curing a little bit to prevent the posts being pushed out of vertical before the concrete is set enough. But a temporary brace at an angle serves just as well.
This is a common technique for setting posts in the ground.
Here is a video from Quickcrete that explains how to do it:
This is perfectly fine unless you live in a desert where it never rains.
I've seen Florida Public Works workers build a concrete catch basin for a large pipe that passed under a road, and they used full, sealed bags of concrete mix and simply stack the bags in a gradual stair-step arrangement. When they were done and everything was neatly stacked, they punched a hole in each bag with a tool -- that's all -- and they left. It rains every day for half of the year in this part of Florida, and the catch basin was soon a solid mass. A year later, the paper and plastic that the bags were made of was noticeably breaking down, and two years later all the paper and plastic was gone and the catch basin looked like it was made of concrete pillows. It's been at least 20 years at this writing, and the catch basin still looks fine.
Concrete hardens through a process called hydration. As you'd guess by the name, water is required. It's common practice to place dry post mix with a pool of water standing on top. I haven't seen anybody just pour in the dry mix and walk away, but I guess if the climate is sufficiently wet and/or humid, then maybe.. In either case, eventually that concrete will get enough water to cure to some degree.
The concrete resulting from dry-placed methods ends up weaker than a wet mix with the right amount of water. It's easy to tell the difference when breaking the concrete off a post with a sledge hammer -- the stuff that was done dry often falls apart with a single blow. As long as the soil is stable (no expansion/shrinking) it's probably alright to have weak concrete surrounding the post.
In my opinion, the only reason it might be "better" to do concrete this way is that it saves the installer the trouble of mixing concrete, placing it before it sets too much, cleaning tools, and disposing of excess/waste concrete. In other words, it's "better" because it's faster, cheaper, easier for the contractor.