ROWE, is a management strategy designed to increase productivity while eliminating the arbitrary constraints of traditional workplaces. The program, created in 2005 by two Best Buy staffers, gives employees the freedom to work on their own terms and their own time, and measures them only on the results they produce – not the amount of time they spend at their desks.
Though Best Buy abandoned ROWE in 2013 (a move that many think was indicative of much deeper company issues), many organizations, both large and small, have implemented ROWE or variations of results-only workplaces to great success. Here’s what you should know about the approach.
What is a results-only work environment?
ROWE is an HR strategy that revolves around how employees are paid. Rather than paying employees for the number of hours they work, companies that use ROWE pay employees based on their work output. Employees don’t need to work a certain set of hours or in-office, so long as they meet their performance metrics. They have complete autonomy over their projects, including how they want to work on them and the amount of time they dedicate to them.
This is different from a work environment with “flexible hours,” as there is still an expectation within those environments that employees will work a certain number of hours.
FYI: Results-only work environments work best when the work that is being done can be specifically measured, as it gives managers a straightforward way to evaluate performance.
What is the idea behind ROWE?
The concept of ROWE is relatively easy to grasp. An organization’s main goal is to succeed. Their most valuable tool in working toward that goal? Highly skilled, highly motivated employees. And those employees are most driven to succeed when they work in a relaxed, comfortable environment and feel appreciated for their expertise and accomplishments.
ROWE aims to provide that relaxed, comfortable environment – while eliminating the customs of a conventional office. In an ideal ROWE workplace, there are no set hours and no required meetings. Employees aren’t even required to come into the office – at all. They have total autonomy over where they work, how they work and when they work. The only measure of value is the results they deliver.
With ROWE, an employee’s performance is measured entirely on his or her delivered results. Productivity is measured by output, not hours worked or face time put in. Therefore, much of an employee’s work can be done at home (or wherever else he or she might choose to work), on the employee’s schedule.
Do results-only workplaces get results?
For many businesses, the advantages of results-only work environments seem to outweigh the disadvantages. Employers everywhere are constantly looking for ways to attract and retain top employees – without having to pay for large wage increases or expensive benefit plans. A great way to do that? Providing a completely flexible, completely results-based work environment.
It’s a big draw, with flexibility topping the list of desired employee benefits and more employees choosing to work from home every year. But it also has big results for companies. Organizations that have implemented ROWE have seen material benefits that include cost savings, financial gains, increased productivity and improved workplace morale.
The pros and cons of ROWE
Should your business explore a results-only workplace? That’s a big decision – one that deserves a lot of thought and discussion. Below, we’ve put together a basic list of the pros and cons of ROWE to help you get started:
- ROWE workplaces require less physical pace because fewer employees spend time in the office
- Employees use fewer sick days and take less time off because they can better work around appointments, illnesses and other events.
- Employees are healthier, happier and have less work-related stress
- ROWE is environmentally friendly, saving both energy and commuting expenses.
- ROWE increases employee satisfaction, and decreases employee turnover, thereby reducing hiring and onboarding costs.
- Companies that have been able to effectively implement ROWE report a major increase in productivity.
- ROWE workplaces can be difficult to manage since it’s often harder to communicate with remote employees who work varying schedules
- ROWE opens up the possibility for unethical behavior since value is only measured in results – not how the results are reached
- Employees who find it hard to self-discipline or self-motivate may not succeed in ROWE workplaces
- ROWE doesn’t work for everyone. It’s impossible for consumer-facing fields like customer service or retail, and difficult for highly collaborative companies to implement
Bottom Line: ROWE holds benefits for both employers and employees. However, it also comes with potential drawbacks that organizations should consider. When determining whether it’s right for your business, take the time to weigh the pros and cons in relation to your company’s needs.
Companies that use ROWE
Businesses will find that many top competitors follow a ROWE model despite some drawbacks. These companies believe that making employees have a stake in their success will benefit all from top to bottom. According to the head of CultureRX Jody Thompson, ROWE models make every single employee 100% accountable and autonomous. Companies that started or changed over to a ROWE model include WATT Global Media, JL Buchanan, Collage.com, World Wide Web Hosting, and Summit CPA.
The most well-known ROWE Fortune 100 company is Best Buy. Best Buy started the strategy at its headquarters and included all 4,000 current employees in the initiative. ROWE seems to work well at companies that implement the human resources model. When instituted by Best Buy, they reported productivity increases of 41% and 90% lower turnover rates between 2005 and 2007.
The bottom line
In many cases, results-only workplaces produce results. However, ROWE isn’t right for every organization. The most important factor in deciding whether ROWE will work for you? Knowing your business – and your employees. Implemented effectively, ROWE could have a big impact on your productivity, your efficiency, your employees’ satisfaction and even your bottom line.