Do Results-Only Work Environments Really Work?

Do Results-Only Work Environments Really Work?

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Guest blog post by Abby Perkins, Managing Editor of the Talent Tribune blog on SoftwareProviders.com

ROWE, or results-only work environment, is one of the latest buzzwords in employee management. Proponents say it makes employees happier and more productive. Those who oppose it argue that it’s simply a form of delegation, and lacks the benefit of close supervision. But what is a results-only work environment – and does it really work?

Understanding the Results-Only Work Environment

Many workplaces base employee compensation and evaluation on the idea that workers should be paid for their time. Under this theory, time is equivalent to output – and the employees that are tied to their desks or workstations from 9 to 5 (or longer) are the most productive.

This model works fine in factories, retail stores, hospitals and other establishments where tasks are both location-specific and visible. But many modern workplaces don’t look like that. Knowledge-based work – think marketing, advertising, or engineering – is invisible and location-neutral. Proponents of ROWE argue that these types of employees should be paid – and evaluated – for the results they accomplish, not the time they spend at work.

How it Began: the Best Buy Experience

ROWE was launched in 2003 by two Best Buy employees, Jody Thompson and Cali Ressler. Fed up with traditional HR practices, Thompson and Ressler came up with a new way to manage knowledge workers. Instead of worrying about time clocks or time spent at desks, managers set performance goals. As long as goals were met, employees could work wherever, whenever, and however they wanted. There was no set workday, and no mandatory meetings.

Despite some initial resistance, ROWE was policy de rigueur for many Best Buy departments by 2005. Ressler and Thompson claim that during that time, those departments experienced a 41 percent increase in productivity. However, Best Buy’s experiment with ROWE ended when a new CEO, Hubert Joly, took over in 2012.

Joly says he dropped the program to get more employees into the office to collaborate on ways to improve the business. The company’s performance had been flagging since the economic downturn in 2008, and improved after Joly’s arrival.

Now, Best Buy is back to an “all hands on deck” business model. But that doesn’t mean ROWE is out of the picture elsewhere. Ressler and Thompson went on to consult with and implement ROWE in many different businesses. Since then, ROWE has shown up in some surprising places — and the business world has learned a lot more about results-only work environments.

ROWE is:

  • An opportunity to be paid and evaluated based on performance, not time.
  • A system for defining work and setting goals.
  • A team effort. ROWE requires teamwork and total commitment to stay on track.
  • An opportunity for innovation. When people stop punching a clock, they find ways to work more efficiently.

ROWE is Not:

  • Flex time, or simply another way of tracking employee hours. ROWE doesn’t care how long anyone works, as long as work gets done.
  • Free time. Each worker has goals that must be achieved, regardless of when or how long they work.
  • Another form of micro-management. Managers won’t always know where their employees are or what they’re doing. But they will know if goals are being met.

The Result:

According to case studies by CultureRX, Thompson and Ressler’s consulting business, companies that implement ROWE can expect an increase in growth and in employee satisfaction. Employees will be happier, healthier and more productive. Teams will innovate and create new ways of doing things — even new products.

What Industries Benefit From ROWE?

ROWE is used in many knowledge-based industries. Here are just a few examples:

  • Accounting: The Garabedian Group, an accounting firm, recently moved from hourly billing to fee-for-service.
  • Manufacturing: Dynatronix, a manufacturing company, redesigned its production system to accommodate ROWE. The result? A 20 percent increase in on-time deliveries and a 40 percent decrease in production time for their biggest product.
  • Consulting: Retail consulting firm JL Buchanan has been able to cut costs and increase revenue using ROWE.

Other companies using ROWE include GAP, Yum Brands, Dixie Iron Works and Ripple IT.

However, ROWE is difficult – even impossible – to implement in some workplace settings. An example? Retail sales. Employees can’t work on their own schedule when they need to be present to mind the store, work the registers, and provide customer service. Other examples include emergency medical services, hotel front desks and restaurants. Any workplace or work function that requires employees to be in a set place at a set time is unlikely to benefit from ROWE.

The bottom line? ROWE isn’t for every company, or for every manager. However, it’s had great results in a number of industries. Where it does fit, productivity and profitability climb.

How much is a warm chair worth to your business? Would you ever try out ROWE in your business?

Abby Perkins in the managing editor of the Talent Tribune blog on SoftwareProviders.com

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