Rowe - Results only Work Environment

Abstract

It's a general assumption in the business world that when measuring productivity, companies look at the time an employee puts at work instead of the output he/she produces. This decades- old business dogma was radically challenged in Best Buy by a program called ROWE, for "Results-Only Work Environment." In my paper I am going to discuss ROWE, its history, the concept, the results, the challenges, its limitations, and finally how has it fared in other businesses.

History

In 2003 two guerrilla HR types at Best Buy, Cali Ressler and Jody Thompson, went about a radical workplace experiment that would change the work environment. The program developed by the two was named results-oriented work environment (ROWE). Its main goal was to develop a work environment that puts emphasis on results rather than attendance. Employees had the freedom to work anywhere they wanted as long as goals were met. ROWE started in secret, gaining ground until CEO Anderson got briefed about the project in 2005 and became an official program rolled out in Best Buy Headquarters. In a way this was an internal change force, using the Burke-Litwin model as an example, although fundamental change should flow from the top to the bottom, the feedback goes in both directions, indicating that internal organizational factors can impact the environment and not just be on the receiving end of change. (Ian Palmer, 2008) After the program gained publicity and credibility, ROWE has also been implemented in other companies such as GAP OUTLET.

The Concept

ROWE is a corporate culture initiative designed to significantly improve employee productivity, accountability and engagement. Under a ROWE, employees are empowered to work whenever and wherever they want as long as the work gets done. (Booth, 2009)

ROWE has 13 commandments, each play a part in creating the perfect environment that'll lead to the successful implementation of the concept. Here are a few samples;

* People at all levels stop doing any activity that is a waste of their time, the customer's time, or the company's money

* Everyday feels like a Saturday

* Nobody talks about how many hours they work

* It's okay to take a nap on a Tuesday afternoon, grocery shop on Wednesday morning, or catch a movie on Thursday afternoon

* Nobody feels guilty

* Work isn't a place to go, it's something you do

* Employees have the freedom to work any way they want

* Every meeting is optional

* No judgment about how you spend your time (Cali Ressler, 2008)

The Results at Best Buy

A few months after the implementation of ROWE the results validated the company's gamble with ROWE'ers, as employees who work under that program are called, posting high metrics for quality, productivity, engagement scores, measuring job satisfaction and retention. For example, voluntary turnover among men dropped from 16.11% to 0 in all departments. In the dot-com division orders processed by people who are not working in the office are up 13% to 18% over those who are. Best Buy employee productivity gained 35% in departments that switched to ROWE. (Conlin, 2006)

The company estimates that each employee leaving costs the company $102,000. This includes costs of recruiting, hiring, relocation and training. From fiscal years 2005 to 2007, three teams reported dramatic declines in voluntary turnover in that period, resulting in a total company savings of $10 million. (Kirdahy, 2008)

Six years after starting ROWE, according to a blog conversation with both Cali and Jody, the business results have been amazing. For one, people don't want to leave. On some teams, voluntary turnover rates (i.e. people quitting) have dropped as much as 90%, and they're experiencing all the cost benefits you get from that kind of retention.

It has been noted, however, that firings, or "involuntary turnover," will often increase during the transition to ROWE. People can no longer disguise paper shuffling and excessive motion for delivering results.

Meanwhile, productivity has gone through the roof. Six months after teams go live, they are asked how much more productive they perceive they are on a scale of 0-100%. Then managers are asked how much more productive the team is according to actual business results. If perception and reality match, that's a winner. Under this model, ROWE teams show an average increase in productivity of 41%. It makes sense.

On the personal side, ROWE has transformed people's lives. We've heard stories about ROWE saving marriages, allowing people to be better parents (and opened the door for some to actually be parents), get in shape and give back to their community. (Ferriss, 2008)

Resistance to ROWE

There has been plenty of opposition inside the company from the day ROWE started gaining momentum. Many executives wondered if the program was simply flextime in a prettier bottle. Others felt that working off-site would lead to longer hours and destroy forever the demarcation between work and personal time. Cynics thought it was all a PR stunt dreamed up by Machiavellian operatives in human resources. And as ROWE infected one department after the other, its supporters ran into old-guard saboteurs, who continue to plot an overthrow and spread warnings of a coming paradise for slackers.

Critics feared executives would lose control and co-workers