Mark Craemer No Comments

Employee engagement initiatives should not be considered fuzzy, feel good opportunities merely to improve job satisfaction and employee retention. Instead, they should be seen as a business strategy for achieving increased productivity.

Fully engaged employees can indeed deliver higher productivity, but what engages one employee does not necessarily do much for another. That’s why things like flextime, telecommuting, concierge services and other benefits help, but don’t necessarily contribute directly to the bottom line.

Unlike other work/life balance programs, ROWE is a business strategy that can positively impact the bottom line while at the same time stimulate employee engagement.

ROWE (Results Only Work Environment) is a human resource management strategy created by Jody Thompson and Cali Ressler and first implemented at Best Buy in 2003. Using ROWE, 80% of Best Buy’s corporate staff now come and go as they please as long as the work gets done on time.

The premise of ROWE is that employees are paid for results rather than hours worked. This provides both freedom for employees and results for employers. ROWE is based on the assumption that employees will do more and better work when given the latitude to decide how and when it is done.

Unlike flextime, ROWE is employee controled not management controled. ROWE requires accountability and clear goals, while flextime requires policies and guidelines. ROWE has unlimited options and is fluid, while flextime has limited options and ultimately is inflexible. Most importantly, ROWE is based on the work and not the hours.

The concept of ROWE is a bit like college where you decide when and where to study and write papers. In most workplaces today, employees are treated more like grade schoolers with strict policies on when to show up, where to sit, how to do the work and when to leave. No wonder recent graduates become disillusioned when entering the “real world.”

Now that aging Baby Boomers are mixing with Generations X and Y, it seems a perfect time to initiate a different approach to how work is performed. We certainly have the technology (teleconferencing, emailing, text messaging, and cell phone calling) to extend the workplace location and flexibility on when to do the tasks. Now it’s just a matter of will.

ROWE is not an entirely new concept. Piece work, where workers are paid a fixed rate for each unit produced or action performed, has been around for more than a century. And then there is performance-rated pay, where money is paid directly on how well a worker performs in the workplace. Commission-based sales is a form of this type of compensation.

High technology companies have been tinkering with alternative concepts for some time. At IBM, 40% of employees have no official office. Sun Microsystems allow nearly half of their employees to work anywhere they want. Google offers their engineers the ability to spend a full day each week working on side projects to pursue their own interests. In a typical year, more than half of Google’s offerings, including Gmail and Google News have come during this 20 percent time opportunity.

ROWE builds upon these and other models to provide employees with more opportunities to do the job their own way and this can lead to greater employee engagement and higher productivity.

But ROWE is not without it’s challenges. Measuring output for some jobs (overhead, administration) can be very difficult. Some people have a hard time working with others if they are not face-to-face. And overall management can be challenging.

Nevertheless, ROWE is proving to be effective returning an average of 35% increase in productivity while reducing voluntary turnover by as much as 90%. In addition, research by the Flexible-Work and Well Being Center at the University of Minnesota found that more ROWE employees than comparable employees:

  • Have greater organizational commitment
  • Report higher job satisfaction
  • View the culture as family friendly
  • Report increased job security

And fewer ROWE employees than comparable employees:

  • Do low-value work
  • Experience interruptions at work
  • Feel pressure to work overtime

Some successful examples of ROWE implementations can be found in retail corporate offices (Gap Outlet, Best Buy), financial services (JA Counter & Associates), and non-profit (Girl Scouts of America in San Gorgonio County of California).

Implementing ROWE as a sound business strategy can provide many benefits. Employees gain the freedom to do the job their own way, which leads to greater job satisfaction, better work/life balance, and higher productivity. Employers are better able to separate performers from non-performers, attract more talented people, and increase their bottom line.

What is your opinion of ROWE? Is this something you and your organization could benefit from?

Mark Craemer

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