Case Application Best Practices at Best Buy Do traditional workplaces reward long hours instead of efficient hours? Wouldn’t it make more sense to have a workplace in which “people can do whatever they want, whenever they want, as long as the work gets done?” Well, that’s the approach that Best Buy is taking.97 And this radical workplace experiment, which obviously has many implications for employee motivation, has been an interesting and enlightening journey for the company. In 2002, then CEO Brad Anderson (now the company’s vice chairman) introduced a carefully crafted program called ROWE—Results-Only Work Environment. ROWE was the inspiration of two HRM managers at Bes Buy, Cali Ressler and Jody Thompson, who had been given the task of taking a flexible work program that was in effect at corporate headquarters in Minnesota and developing it for everyone in the company. Ressler and Thompson said, “We realized that the flexible work program was successful as employee engagement was up productivity was higher, but the problem was the participants were being viewed as ‘not working.’” And that was a common reaction from managers who didn’t really view flexible work employees as “really working because they aren’t in the office working traditional hours.” The two women set about to change that by creating a program in which “everyone would be evaluated solely on their results, not on how long they worked.” The first thing to understand about ROWE is that it’s not about schedules. Instead, it’s about changing the work culture of an organization, which is infinitely more difficult than schedules. With Anderson’s blessing and support, they embarked on this journey to overhaul the company’s corporate workplace. The first step in implementing ROWE was a culture audit at company headquarters, which helped them establish a baseline for how employees perceived their work environment. After four months, the audit was repeated. During this time, Best Buy executives were being educated about ROWE and what it was all about. Obviously, it was important to have their commitment to the program. The second phase involved explaining the ROWE philosophy to all the corporate employees and training managers on how to maintain control in a ROWE workplace. In the third phase, work unit teams were free to figure out how to implement the changes. Each team found a different way to keep the flexibility from spiraling into chaos. For instance, the public relations team got pagers to make sure someone was always available in an emergency. Some employees in the finance department used software that turns voicemail into email files accessible from anywhere, making it easier for them to work at home. Four months after ROWE was implemented, Ressler and Thompson followed up with another culture check to see how everyone was doing. So what’s the bottom line for Best Buy? Productivity jumped 41 percent and voluntary turnover fell to 8 percent from 12 percent. They also discovered that when employees’ engagement with their jobs increased, average annual sales increased 2 percent. And employees said that the freedom changed their lives. “They don’t know if they work fewer hours—they’ve stopped counting—but they are more productive.” As Ressler and Thompson stated, “Work isn’t a place you go—it’s something you do.” Discussion Questions 1. Describe the elements of ROWE. What do you think might be the advantages and drawbacks of this program? 2. Using one or more motivation theories from the chapter, explain why you think ROWE works. 3. What might be the challenges for managers in motivating employees in a program like this? 4. Does this sound like something you would be comfortable with? Why or why not? 5. What’s your interpretation of the statement that “Work isn’t a place you go—it’s something you do”? Do you agree? Why or why no
Answers
Answer:
Best Practices at Best Buy
Do traditional workplaces reward long hours instead of efficient hours? Wouldn’t it make more sense to have a workplace in which employees could work however and whenever they wanted to as long as they did their work? Well, that’s the approach Best Buy tried.113 And this radical workplace experiment, which obviously has many implications for employee motivation, was an interesting and enlightening journey for the company.
In 2002, then-CEO Brad Anderson introduced a carefully crafted program called ROWE—Results-Only Work Environment. ROWE was the inspiration of two HRM managers at Best Buy, Cali Ressler and Jody Thompson. These two had been asked to take a flexible work program in effect at corporate headquarters in Minnesota and develop it for implementation throughout the company. Although that flexible work program had had some stunning successes, including high levels of employee engagement and productivity, there was one significant issue. Those involved in the program were perceived to be “not working.” And that was a common reaction from managers who didn’t really view flexible work employees as actually doing work because they didn’t show up at work during the “traditional” hours. The two women set about to change that impression by creating a program in which employees would be evaluated on what they accomplished—their “results only”—not on the amount of hours they spent working.
The first thing to understand about ROWE was that it wasn’t about schedules. Instead, it was about changing the work culture of an organization, which is infinitely more difficult than changing schedules. With Anderson’s blessing and support, they embarked on this journey to overhaul the company’s corporate workplace.
The first step in implementing ROWE was a culture audit at company headquarters, which helped them establish a baseline for how employees perceived their work environment. After four months, the audit was repeated. During this time, Best Buy executives were being educated about ROWE and what it was all about. Obviously, it was important to have their commitment to the program. The second phase involved explaining the ROWE philosophy to all the corporate employees and training managers on how to maintain control in a ROWE workplace. In the third phase, work unit teams were free to figure out how to implement the changes. Each team found a different way to keep the flexibility from spiraling into chaos. For instance, the public relations team got pagers to make sure someone was always available in an emergency. Some employees in the finance department used software that turns voice mail into e-mail files accessible from anywhere, making it easier for them to work at home. Four months after ROWE was implemented, Ressler and Thompson followed up with another culture check to see how everyone was doing.
So what results did Best Buy see with this experiment? Productivity jumped 41 percent, and voluntary turnover fell to 8 percent from 12 percent. They also discovered that when employees’ engagement with their jobs increased, average annual sales increased 2 percent. And employees said the freedom changed their lives. ROWE reduced work-family conflict and increased employees’ control over their schedules. ROWE employees didn’t “count” how many hours they were at work but instead focused on getting their work done, however many or few hours that took. For them, work became “something you do—not a place you go.”
Despite the positive aspects of the program, Best Buy’s current CEO, Hubert Joly, decided to eliminate the flexible work environment associated with ROWE. Now instead of being able to work whenever and wherever they choose, most corporate staff will be required to work traditional 40-hour weeks in the office. And Ressler and Thompson? Well, they now own their own HR consultancy practice, which promotes the ROWE idea to other companies.
Using one or more motivation theories from the chapter, explain why you think ROWE works.
Step-by-step solution:
Step 1 of 3
Equity and expectancy theories are the two motivation theories that can be compared with the working of ROWE (result only work environment).
Equity theory: This theory states that employees tend to make comparison between the efforts and what they receive out of it. The result of comparison decides how employees will react and behave. The result of what they perceive from the comparison they did may be lower or higher the productivity improved or reduced quality of performance or may increase in absenteeism. Equity theory laid emphasis on fair allocation of rewards among individuals.
Expectancy Theory: It proposes that an employee tends to perform in a way that is based on the belief that an outcome follows his act the attractiveness of that outcome to the individual makes him perform the act accordingly.