Despite some critical scrutiny, the concept of allowing employees to work wherever they want, whenever they want is still alive and well in a handful of companies.
While everyone in San Francisco seems to be spending the morning rush hour stuck in traffic on the notorious Bay Bridge or I-80, Eric Severson is exercising at the gym. He used to be right beside them, fighting traffic during a grueling 45-minute stop-and-go trip across town.
Now he rolls into the Gap Inc. corporate office around 10 a.m., after a virtually traffic-free 15-minute ride.
"One big lifestyle difference now is that I'm working out, doing my cardio routine every day," says Severson, Gap's vice president of human resources. "Also, I'm much healthier -- getting more sleep and I'm more alert."
His freedom is not the result of a flexible-work schedule or a promise that he'll stay in the office later in the evening -- it's all about the company's new Results-Only Work Environment.
In a ROWE setup, employees are measured by their results, not time spent in the office. As long as employees get their jobs done, when and where they do that is irrelevant. Want to work from home today? Sure. Want to conduct a meeting at your favorite coffee shop instead of a stuffy conference room? Go right ahead. Are you more of a night owl who prefers to work at 1 a.m.? Nobody's stopping you.
That leaves plenty of time to live your life -- attend a child's dance recital, go golfing in the afternoon or take an elderly parent to a daytime doctor's appointment.
While it's worked for companies such as Gap and Fairview Health Services, and is being tested in a pilot program for 400 employees by the U.S. Office of Personnel Management, ROWE probably isn't a fit for every company.
Some critics express concern that such an environment leaves no clear division between work life and home life, doesn't work for employees who are less-than-superb time-managers, hurts team building and idea creation, and forces managers to change age-old thinking about measuring performance.
Others, however, say ROWE is the truest form of flexible work -- that it's the future of employment because it treats work as something you do, rather than somewhere you go.
Yearning for Flexibility
Gap chose ROWE in an effort to retain key employees. San Francisco is loaded with opportunities for specialists in the retail business, given that it's home to the corporate headquarters for companies such as Levi Strauss & Co., Williams-Sonoma Inc. and The Gymboree Corp. As a result, Gap was forced to figure out ways to battle high turnover, trying things like No Meeting Fridays, a Laptops for All program and traditional flexible-work schedules. But nothing seemed to do the trick.
"When we looked at exit data from our employees, we were seeing that work/life flexibility was always among the top three reasons people were leaving," says Severson.
So, in 2008, Gap decided to "go ROWE," consulting with Cali Ressler and Jody Thompson of CultureRx in St. Paul, Minn. Ressler and Thompson invented ROWE at Best Buy a few years prior to that and have since left the company to start their own business. Today, CultureRx has hundreds of clients and had revenues of $750,000 last year.
"We wanted to dramatically reduce our turnover and do it in a way that our competitors could not easily replicate," says Severson. "ROWE seems to be something that employers are very slow to adopt. They're afraid of it."
But not Gap.
The company initially offered ROWE to the production and technical-design team within its Outlets division, which is responsible for 307 Gap Outlet and Banana Republic Factory Stores. It was a good place to start, considering that the 80 employees chosen often found themselves working odd hours in order to collaborate with colleagues in Asia and Europe.
But allowing people to come and go as they please was a strange concept for senior leaders, who were anything but blindly supportive at first.
"Essentially, our CEO said to us, 'I'm a little skeptical, but you show me ROI. Show me first that you do no harm and then I'd really like to see that it's driving a positive,' " says Severson, who adds that, for ROWE employees, turnover dropped to 7 percent in 2008 from 21 percent in 2007 and employee-engagement scores increased to 82 percent in 2008, from 69 percent the year before.
In light of those results, senior leaders gave the program their blessing, expanding it to 300 Outlets workers at corporate headquarters in June 2009 -- everyone from designers and production workers to merchandisers and inventory managers.
To make sure employees don't feel like they're required to work 24/7, there is an unwritten rule at Gap -- all meetings and collaborative efforts take place between 9 a.m. and 5 p.m., says Severson. That way, nobody is forced to comply with a co-worker's odd hours.
And the program continues to impress: In 2009, employee engagement went up to 88 percent for the employees on ROWE while turnover remained at 7 percent.
Managers Make the Difference
The tale of ROWE's inception at Best Buy has been well-documented. In 2006, Ressler and Thompson worked in HR and secretly allowed a small group of employees at the corporate headquarters in Richfield, Minn., to work wherever they wanted, whenever they wanted -- as long as they delivered measurable results. Initially, senior management didn't even know.
Word of the program spread throughout the increasingly excited workforce and senior leaders eventually rolled out ROWE to 3,000 employees at Best Buy's headquarters, according to CultureRx.
Four years and countless magazine and newspaper articles later, Best Buy's program is still going strong, according to a company spokesperson (Best Buy declined to make executives and employees available for this story). The bulk of the current and former employees reviewing their experiences working at Best Buy's corporate office on glassdoor.com -- a site that allows people to anonymously post company reviews and salaries -- had good things to say about ROWE.
One former senior manager calls the program "a great promoter of work/life balance," while a senior demand-planning analyst writes, "If it takes me six hours to do my job and you take eight, why should I have to sit in my chair two hours longer?"
Still, there were some dissenters on the glassdoor.com site.
A consumer-marketing associate writes that employees were not asked to -- but expected -- to work from home on their company laptops.
"You have to be very smart about the way you manage your time, or you will have issues with work/life balance," writes the employee.
A director at the company writes that the "lack of structure and process can make it difficult for some people to find their place within the fast-changing environment."
Chris Ferdinandi, writer of the popular blog RenegadeHR and also an HR generalist at EMC Corp., admits he's "madly in love with ROWE," but cautions that organizations cannot rely simply on results -- they should know how the work is getting done. (He says his blog is independent of EMC, and the company is not considering "going ROWE.")
"Environments in which employees are goaled, assessed and paid based only on outcomes and not processes may lead to increased instances of unethical behavior," he says.
Reed Deshler, a principal at Louisville, Ky.-based consultancy AlignOrg Solutions, agrees that people might be inclined to take advantage of a ROWE system if it doesn't align with the culture and mission of the organization.
"If it's not implemented fully, or if the people working in that environment don't understand the culture and the way that it's supposed to operate, [unethical behavior] could result," says Deshler, "but it would be unfair to say that's more prevalent with ROWE than with other organization cultures or choices."
Nevertheless, Ressler says, ROWE makes it easier to sniff out questionable behavior.
"If employees are going to act unethically, they're going to do it in any work environment they're in," says Ressler. "However, in a ROWE, they would be exposed more quickly. When the focus is solely on results, underperformers and unethical behavior can't hide."
Ferdinandi cautions that teamwork could suffer in a ROWE environment, since the workforce tends to be spread out.
"If you look at codependent teams, for example ... , " says Ferdinandi, "me finishing my work is dependent on one of my teammates finishing their work. There has to be some communication about how and when that work is getting done. Just focusing on the results, I think, is a little bit misleading."
ROWE, he says, wrongly assumes that employees will have the discipline and time-management skills necessary for setting their own schedules. Those folks, Thompson and Ressler counter, can just come into the office during normal hours and won't have the added pressure of managing their own schedules.
That's all well and good, says Ferdinandi, but the office environment in ROWE isn't quite the same.
"You could certainly come to the office, but if none of your co-workers are there, perhaps your boss isn't there . . . you might not have the guidance and the structure you were looking for," he says.
A sparsely populated office also reduces the chances for inadvertent contact with co-workers -- something that's long been a source of innovation and creativity in the workplace.
Ressler argues, however, that, most of the time, inadvertent contact comes in the form of a co-worker bothering you about the previous night's baseball game or American Idol episode. In ROWE, she says, conversations are more focused, leading to more work getting done.
"Are there fewer drive-bys and interruptions in a ROWE? Yes. And that is something that 98 percent of employees cheer about during the migration process," she says.
There's also the concern that ROWE could lead to employees slacking off. To combat this, managers need to set clear expectations of the amount of work that's expected to be done and when it should be completed. At J.A. Counter and Associates Inc., a consultancy in New Richmond, Wis., that uses ROWE, company leaders have set up definitive rules so the employees know exactly what's expected of them.
All phone calls must be returned within 12 to 24 hours, for example. Meetings must be prepped within 24 hours, and all client applications must be processed within one to two days, says Deb Henke, operations manager.
Ferdinandi agrees that managers with clear expectations make the difference between a successful ROWE and an unsuccessful one.
"There needs to be a lot of communication between teams on how and when the work is getting done," he says. "I think you need managers to understand how, individually, their employees work best and ensure that they have the tools, resources, systems and structure they need to get their work done."
Daniel Pink, a Washington-based author of Drive: The Surprising Truth About What Motivates Us and other workplace books, has studied ROWE and agrees that managers -- and their buy-in -- hold the key.
"Managers have to understand, in their gut, that ROWE is not a deviation from accountability, but a pathway to accountability," he says. "We're getting rid of all kinds of metrics for performance and we're letting people do whatever they want, but this is a different way to achieve accountability. In fact, I think you can make a very hard-headed case that ROWE fosters greater accountability because it puts the accountability on results, not on inputs."
However, he concedes the approach isn't for every organization.
"For instance ... in a retail environment, you need someone running the cash register while the store is open. It's hard to say to that person, come and run the cash register whenever you feel like it," says Pink.
But Ressler and Thompson say that, even if an organization is inherently run on time constraints, it could still benefit from ROWE. Sure, a waiter can't decide to leave during a restaurant's dinner rush but a group of servers could decide -- without the manager -- to let a colleague go home on a slow night, says Thompson.
When HR is Wary
When trying to sell their consulting services and help transform an organization to ROWE, Ressler and Thompson say, HR can often be their biggest hurdle. One reason, they say, is because HR is often in charge of workplace rules, many of which no longer apply once ROWE is in place.
"Sometimes, we actually do have to move on because if we don't have a partner with HR, and the business leader doesn't have the appropriate support [he or she needs] from human resources, it's really difficult for us to implement," says Thompson. "But we've also found business leaders and HR partnerships that are very healthy and very good, and those are the places where the Results-Only Work Environment can really thrive."
Pink says HR executives who don't buy into the ROWE concept might not understand how it could change HR, along with the rest of the company.
"More of the administrative tasks end up going away for HR and, I think, it frees up HR to do more sophisticated, strategic work like finding and nurturing great talent," he says. "HR does fewer of the routine ham-and-egg administrative [tasks] and does more of the strategic responsibilities and does better for the firm."
Eva Sage-Gavin, executive vice president of human resources at Gap, says she sees a similar change for HR since the organization went ROWE. If an employee is responsible for completing a task and doesn't do so, for example, he or she has the entire team to answer to -- not just the supervisor and HR. And that's changed how HR does its job.
"I've found something amazing: It's almost relieving HR from being a disciplinarian because the team depends on each other," she says, adding that the company is considering offering ROWE to a wider range of employees. "It lets us, as HR professionals, coach the team and coach leaders more than a classic time-and-attendance-type approach [would allow]."