Best Buy
Content
Best Buy's 'Results Only Work Environment': Changing the Productivity Paradigm?
Richa Agrawal Neha Jain Kanika
ABOUT CASE
'Results Oriented Work Environment' (ROWE) implemented by US based electronics retailer Best Buy in 2003-2004. ROWE initially started as an experiment to stem attrition in two departments at the corporate headquarters of Best Buy, but after its initial success, began to be implemented more widely. The basic premise of ROWE was that productivity was the cornerstone of work, and work meant the achievement of results and not presence at the workplace. ROWE focused only on 'results' as a measure of employee productivity.
In keeping with this, employees working under ROWE were allowed to work when they wanted, where they wanted, as long as they achieved their targets.
ROWE was hailed as a path-breaking program, which would give new meaning to flexibility and work/life balance. Average productivity of ROWE teams had also increased 35 percent. Employee engagement, which was a measure of job satisfaction and hence an important factor in retention, was also reported to be significantly higher Best Buy reportedly witnessed several non-quantifiable benefits as well. In late 2006, Best Buy announced modified the version of ROWE to be implemented in a modified form in the company's retail stores, which employed almost 120,000 people for employee-friendly work environment
OBJECTIVES
ROWE
focused only on 'results' as a measure of employee productivity. Demanding work culture that glorified long hours. Stem constantly increasing attrition at company. lower stress and improve employees morale.
DISADVANTAGE
Difference between the work and personal time of the employees could become indistinct. The difference between work and leisure. Stress and long work hours. Worked around 70 hours while standard work week is 40 hours. Spread of work over 7 days instead of 5 No monetary benefits
Manager piling too much work with out any compensation. Work is finishing early expected taking more free time Job performance could be measured in quantitative terms Not work for employees who preferred to have clear schedules and expect direction from their manager. No synergy created by face to face communication Not innovative much Conditions handle better when physically present than on telephone or by email
ADVANTAGES
Flexible scheduling Trusting team members Job satisfaction Productivity increase Lower level employees were excited ´no restrictionµ work environment Assigned targets in certain time frame People are to work at whatever time they felt like working
System was made by which they could contact each other when needed Online calendar and whiteboards Cell phone and laptops Conference calling or dialed meeting ROWE made work easier Employees happy with their freedom Work/life balance Attract best talent in recruitment
As with any change program, Best Buy also faced several issues in implementation of the program. To what extent were the concerns of the managers and employees (especially those against the program) justified?
Comparison between the OLD and NEW work culture
OLD y Long Hours
y
NEW Productivity at work measured by output.
Rewards and recognition went Assigned target for a to who prioritized work over certain time frame. personal life. Had to stay in office till the work do not finish. Working did not mean being at office.
y
Issues in implementation
y y
Required a complete overhaul of people·s attitudes towards work. Employees misgiving about whether they would be able to cope with the new system. Many managers wondered how they would establish authority if they could no longer control their employees· work time. Handling sludge(collection of attitudes and comments at the workplace that hindered the progress of ROWE.
y
y
Justification with the employees and managers
The company sought to eliminate all the issues by setting up an employee-friendly scheduling system and designing rewards and consequences around it. The company announced that all the 4,000 employees working at Best Buy·s corporate offices would be brought under ROWE.
y
y
Potential of ROWE as a standard work system
¶Results Only Work Environment· focused only on ¶results· as a measure of employee productivity. y ROWE differs from traditional ¶ flexible work schedules· . y Initial results were encouraging: Turnover fell from 14% to 0% in first three months. Job satisfaction increased by 10% Productivity improved by 13%.
y
ROWE¶s vision: Productivity at work to be measured by output & not by working hours.
What kind of employees does the system suit best?
Self-motivated employees y Autonomy/Independence , Entrepreneurial creativity y Employees at the exploration stage of career development cycle. y Self managed groups / teams.
y
Different people have different needs
ROWE: Potential for creating chaos
ROWE vs.Traditional approach. Guilt feeling / confusion related to work. Blurred difference between the work and personal life of employees. Increased working hours: 40 hours to 70 hours. No raise in compensation. ROWE highly reliant on metrics & the quantifiability of the work. Lack of synergy created by face to face communications. ROWE was applicable to only certain departments: Legal, General Administrative, Retail employees could not opt for ROWE.
Anything different from µusual grind¶ = Temporary spurt in Productivity.
Steps to prevent chaos resulting from ROWE?
Training , Counseling sessions for ROWE y Making it compulsory for employees to visit office on any one day to attend review meetings, etc. y Adopting some modern management techniques: y
Ń Flextime ² choose working hours within specified limits. Ń Telecommuting ² working at home or while travelling, keeping in contact with the office. Ń Job sharing ² employees can reschedule their work hours among themselves to suit their personal needs and thus concentrate better on their jobs. Ń Condensed work week ² implies condensing the work week by increasing the no. of working hours per day. Ń Working from home - visiting office only once or twice a week.
Remind employees of the Work/life balance.
Richa Agrawal Neha Jain Kanika
ABOUT CASE
'Results Oriented Work Environment' (ROWE) implemented by US based electronics retailer Best Buy in 2003-2004. ROWE initially started as an experiment to stem attrition in two departments at the corporate headquarters of Best Buy, but after its initial success, began to be implemented more widely. The basic premise of ROWE was that productivity was the cornerstone of work, and work meant the achievement of results and not presence at the workplace. ROWE focused only on 'results' as a measure of employee productivity.
In keeping with this, employees working under ROWE were allowed to work when they wanted, where they wanted, as long as they achieved their targets.
ROWE was hailed as a path-breaking program, which would give new meaning to flexibility and work/life balance. Average productivity of ROWE teams had also increased 35 percent. Employee engagement, which was a measure of job satisfaction and hence an important factor in retention, was also reported to be significantly higher Best Buy reportedly witnessed several non-quantifiable benefits as well. In late 2006, Best Buy announced modified the version of ROWE to be implemented in a modified form in the company's retail stores, which employed almost 120,000 people for employee-friendly work environment
OBJECTIVES
ROWE
focused only on 'results' as a measure of employee productivity. Demanding work culture that glorified long hours. Stem constantly increasing attrition at company. lower stress and improve employees morale.
DISADVANTAGE
Difference between the work and personal time of the employees could become indistinct. The difference between work and leisure. Stress and long work hours. Worked around 70 hours while standard work week is 40 hours. Spread of work over 7 days instead of 5 No monetary benefits
Manager piling too much work with out any compensation. Work is finishing early expected taking more free time Job performance could be measured in quantitative terms Not work for employees who preferred to have clear schedules and expect direction from their manager. No synergy created by face to face communication Not innovative much Conditions handle better when physically present than on telephone or by email
ADVANTAGES
Flexible scheduling Trusting team members Job satisfaction Productivity increase Lower level employees were excited ´no restrictionµ work environment Assigned targets in certain time frame People are to work at whatever time they felt like working
System was made by which they could contact each other when needed Online calendar and whiteboards Cell phone and laptops Conference calling or dialed meeting ROWE made work easier Employees happy with their freedom Work/life balance Attract best talent in recruitment
As with any change program, Best Buy also faced several issues in implementation of the program. To what extent were the concerns of the managers and employees (especially those against the program) justified?
Comparison between the OLD and NEW work culture
OLD y Long Hours
y
NEW Productivity at work measured by output.
Rewards and recognition went Assigned target for a to who prioritized work over certain time frame. personal life. Had to stay in office till the work do not finish. Working did not mean being at office.
y
Issues in implementation
y y
Required a complete overhaul of people·s attitudes towards work. Employees misgiving about whether they would be able to cope with the new system. Many managers wondered how they would establish authority if they could no longer control their employees· work time. Handling sludge(collection of attitudes and comments at the workplace that hindered the progress of ROWE.
y
y
Justification with the employees and managers
The company sought to eliminate all the issues by setting up an employee-friendly scheduling system and designing rewards and consequences around it. The company announced that all the 4,000 employees working at Best Buy·s corporate offices would be brought under ROWE.
y
y
Potential of ROWE as a standard work system
¶Results Only Work Environment· focused only on ¶results· as a measure of employee productivity. y ROWE differs from traditional ¶ flexible work schedules· . y Initial results were encouraging: Turnover fell from 14% to 0% in first three months. Job satisfaction increased by 10% Productivity improved by 13%.
y
ROWE¶s vision: Productivity at work to be measured by output & not by working hours.
What kind of employees does the system suit best?
Self-motivated employees y Autonomy/Independence , Entrepreneurial creativity y Employees at the exploration stage of career development cycle. y Self managed groups / teams.
y
Different people have different needs
ROWE: Potential for creating chaos
ROWE vs.Traditional approach. Guilt feeling / confusion related to work. Blurred difference between the work and personal life of employees. Increased working hours: 40 hours to 70 hours. No raise in compensation. ROWE highly reliant on metrics & the quantifiability of the work. Lack of synergy created by face to face communications. ROWE was applicable to only certain departments: Legal, General Administrative, Retail employees could not opt for ROWE.
Anything different from µusual grind¶ = Temporary spurt in Productivity.
Steps to prevent chaos resulting from ROWE?
Training , Counseling sessions for ROWE y Making it compulsory for employees to visit office on any one day to attend review meetings, etc. y Adopting some modern management techniques: y
Ń Flextime ² choose working hours within specified limits. Ń Telecommuting ² working at home or while travelling, keeping in contact with the office. Ń Job sharing ² employees can reschedule their work hours among themselves to suit their personal needs and thus concentrate better on their jobs. Ń Condensed work week ² implies condensing the work week by increasing the no. of working hours per day. Ń Working from home - visiting office only once or twice a week.
Remind employees of the Work/life balance.
