What Is a Results-Only Work Environment?

Ask any manager to describe the best way to evaluate direct
reports and she's likely to mention results — that is, how
well employees perform tasks and accomplish goals. But according to former Best
Buy HR managers Cali Ressler and Jody Thompson, few managers actually evaluate
on that basis. Instead, most managers reward employees based on how much time
they log at the office or how well they navigate office politics. To correct
this common problem, Ressler and Thompson developed the Results-Only Work
Environment (ROWE) at Best Buy.

ROWE is a management philosophy based on the premise that giving
employees complete control over their time is the best way to increase
productivity in the workplace. If Best Buy is any example, the system can work:
Departments that use ROWE report average productivity increases of 35 percent. Now Ressler and Thompson have spun off their own
company, CultureRx, and written a book,
Why Work Sucks and How to Fix It. As their idea gains media attention, the question is whether or not ROWE can
work outside of Best Buy.

How It Works

As Ressler and Thompson put it in their book, “In
a Results-Only Work Environment, people can do whatever they want, whenever
they want, as long as the work gets done.” This is not simply
company-sanctioned flextime. A true ROWE has unlimited paid vacation time, no
schedules, no mandatory meetings, and no judgments from co-workers and bosses
about how employees spend their days. In other words, managers trust employees
to get their work done and do not mandate — or even comment on —
when, where, or how it happens. Because everyone is evaluated based on what
they accomplish, as opposed to how much time they spend looking busy at their
desks, it becomes clear very quickly who is actually getting work done and who
isn’t.

What this looks like on a daily basis is different for
every employee. For example, one Best Buy e-learning specialist completes an
entire month of work in two weeks so that he can spend the rest of the month
following his favorite bands around the country, checking in with the office
via email and cell phone. For someone else, it might mean working from 6 a.m.
to 10 a.m. and then logging back online at 8 p.m., whether from the office,
home, or a resort in Hawaii.

Why It Works

ROWE advocates say that a relentless focus on results
forces managers and employees to be clear about job descriptions and
expectations. Scott Jauman, a Lean Six Sigma Master Black Belt at Best Buy,
says teams learn how to communicate more effectively and plan ahead around each
other’s schedules. Plus, they learn to work together and back each
other up in new ways. Ressler and Thompson call it cross-training: Employees
tend to be more willing to fill in for co-workers when necessary, and in the
process they learn new jobs.

Many of the productivity gains that result from a ROWE
come from its effectiveness at retaining and motivating valued employees. At
the same time, a ROWE exposes a team’s underperformers, the ones who
used to get away with contributing little. The net result is a stronger team
that can do more with less. For example, after migrating to a ROWE, Best Buy’s
strategic sourcing and procurement team boosted employee retention by 27
percent and shed 10 low-performing employees. But the real proof was the huge
uptick in performance: The department, which buys materials for the corporate
environment, saw a 50 percent increase in cost reductions over two years.

Where It Works — and Where It Doesn’t

So far, Best Buy has implemented ROWE in most departments
at its Minneapolis headquarters, where the company’s so-called
knowledge work happens, but to date the philosophy has not made its way into
environments other than offices. According to Best Buy, the company has
discussed bringing ROWE to the retail floor but does not yet have a vision for
how it would work. “ROWE obviously has some limitations in the
service economy, where a number of jobs require coverage, like dealing with
people in a hotel or retail store,” says Tammy Erickson, author of
the Harvard Business blog
href="http://discussionleader.hbsp.com/erickson/">Across the Ages.

Likewise, ROWE is ill-suited for industrial environments,
says Lance Haun, who writes the YourHRGuy blog and heads up
HR at an 800-person aerospace manufacturing company in Portland, Ore. “Our
operation has a lot of cogs going at the same time,” he says. “I
think it would be very hard for [ROWE] to work even remotely well in this
large-scale environment.”

Also unclear is how inherently time-driven workplaces such
as stock brokerages and doctors’ offices, which must operate on the
external schedules of entities like stock markets and patients, could
offer employees complete control over their work hours. In addition to helping
about 80 percent of Best Buy headquarters employees (roughly 3,200) migrate to
a ROWE, Ressler and Thompson have successfully transitioned one other company,
a small Wisconsin-based insurance brokerage firm. Several other companies are
in the process of trying pilot programs.

Who It Works For

In theory, a ROWE would work for anyone whose work is
project or task based, regardless of whether the employee is an individual contributor
or part of a team. In practice, however, a ROWE comes with several caveats.
Perhaps the most significant one is the fact that for a ROWE to be effective,
it requires a mature, goal-oriented manager. Erickson points out that in
traditional work environments, many employees complain that they can’t
be measured by results because their leaders don’t articulate what
they want them to accomplish. “A ROWE takes it to the next level and
forces managers to figure out what they want done,” Erickson says, and
not every manager will live up to that challenge. Employees, for their part,
need to deliver.

“If you don’t have enough
self-discipline to stay focused when away from the office, you will struggle,”
says Jauman. Even for workers who choose to go into the office every day from 8
to 5, a ROWE necessarily requires more self-motivation because managers no
longer play the role of supervisor. After two years, Best Buy saw a 77 percent
increase on average in involuntary turnover across three ROWE departments —
meaning, the number of people the company fired for underperformance soared.

Legal Issues

Thompson and Ressler admit that ROWE is complicated when
it comes to issues such as nonexempt (hourly) workers. Federal law requires
that hourly workers log the time they work so that they can be paid overtime if
necessary. But part of the migration to ROWE is a psychological shift away from
thinking about work in terms of time. Nonexempt workers in a ROWE would have
the freedom to set their own hours, but by law they would also have to meet the
very non-ROWE requirement of tracking their time in order to be paid.