what is ROWE and how does it affect the workplace?

Workstation

Let’s talk about ROWE – a results-oriented work environment. Here’s a good primer.  It’s very simple in the most distilled form:

ROWE, or Results-Only Work Environment, (also known as Results Oriented Work Environment), is a management strategy created by CultureRx and used by Best Buy.  In this model, employees are paid for results (output) rather than the number hours worked. The goal is to keep workers who deliver results while firing those who are not productive.

ROWE in practice means “each person is free to do whatever they want, whenever they want as long as the work gets done.”  Employees control their own calendars, and are not required to be in the office if they can complete their tasks elsewhere.

I’ve read about ROWE and I think one of the primary objections will be on the part of many employees, oddly enough. When companies start realizing that they had 8 people sitting around browsing the web 7 hours a day and working 1 hour a day, they’ll be able to start cutting employees.  I know as a consultant I’m expected to be on-site simply to satisfy the client’s desire to know I’m “working”, when in reality I can complete most of my consulting work in a couple of hours a day.  But as long as companies expect “core hours” they will build inefficiency into the system AND overpay employees (and consultants).  Would most people be happier working in a ROWE environment?  Sure – if they are paid a salary.  If you’re in my shoes and can only bill 2 hours a day in a ROWE environment, but 8 if required to be on site – I don’t know how many people would happily agree to that.

ROWE certainly seems like a step in the right direction, but it’s embraced mainly as a transitional step from traditional employment. I think the future will be much more freelance-ish.  Employees will be treated more and more like freelancers (or will actually BE freelancers).  Companies will use them when they have work that needs doing, and let them go when they don’t.  If it wasn’t for the lack of national health care in America, I think we’d be even closer to that already.  ROWE fixes one problem:  employee dissatisfaction with core hours.  What it doesn’t fix is the problem of salary inequality.  Someone who works 20 hours a week at the same skill level as someone who works 60 hours a week shouldn’t be paid the same.  ROWE seems to assume that salaries are the norm – you’re paid a flat rate to do project work.  The more logical idea will be to start paying employees an hourly rate for effective time.  If you need three hours to complete a project, you get paid for three hours’ work.  If ROWE tells you that you get paid for a full eight-hour day when you only needed three hours to complete your work, then ROWE’s doomed to failure.

The future of American work is – hopefully – the smart convergence of a flexible workplace with government-provided healthcare and diligent knowledge-based workers. I like the idea of a lot of freelancers, or semi-freelancers, providing services to companies on an as-needed basis without fears about health care or retirement savings.  It may be a bit of a dream, but hey – that’s how I’m trying to configure my life so at a minimum I’m doing my bit to move the economic model that way.  I just wonder if that’s REALLY what everyone wants – to actually be paid for what they accomplish, rather than just the amount of time they are clocking in at the job.  I could be wrong, but I suspect most people want to be paid for showing up, not for delivering the goods.

photo credit: Isa Costa

Hunter has an interesting post on this subject that I commented on; it inspired this post.

Reblog this post [with Zemanta]

17 comments

  • Ugh, I remember those times. The face time was killing everybody and my career. You see how I didn't say that it was killing me? I left at 5 every day. I was done, all work completed. I am sure it didn't look good, no matter how efficient I was and all my deadlines met. My colleagues on the other hand had a silent competition going on – who outsits who. It was making them miserable, but if Joe is still there then Sally will have to sit there too and Sam has to stay b/c Sally is still there, blah, blah…
    However, when I was an intern I was paid by hour. I could leave anytime or stay as long as I wanted. I was paid $20/hr. times were so good back then..

  • If you pay people for how long something takes it will be very hard to know how long it actually should take. Of course, paying based on a fixed result has the same problem – with knowledge workers it can be hard to know how long something will take or should take with any precision.

    In general there may be a lot of people who don't care much about the results they produce, but that might be as much about the job they're doing as it is about them. My goal is to hire people who actually have an interest in doing their specific job well and then help them improve, while avoiding the “perform or die” pressure of freelance work.

    • I agree with Richard. I'm a freelancer and one of my regular gigs is BIG on efficiency: my days there are planned out in 15 minute increments. However, sometimes I find that I'm not given sufficient time for a particular task – simply because the people who put my plan together don't know or under-estimate how long a specialised task takes.

      If ROWE was brought in, I expect that lots of people would have this problem and would end up doing lots of unpaid overtime.

      Apart from that, I think it's a great idea!

  • May work for some job functions I guess. For those of us who are deadline driven and whose tasks are already cut to the bone, efficiency-wise, at fee proposal stage it wouldn't happen. I work a fair amount of hours when I have too, but it's not uncommon for people get told off in this place for being seen sitting in the office every night at 9pm. It's assumed they're being inefficient and blowing fees.

  • Another thought – don't you have to be fully staffed for this? How many workplaces have enough people that responsibilities don't overlap and slide and get thrown at whoever has a few spare minutes?

  • That type of environment works in sales. I agree it allows the employees to be more flexible. I don't think sitting at a computer all day is necessary and no one is fully working that full time. They could be more efficient in other ways. At the same time people don't get into sales for that reason. They don't want the stress and fear that comes in that environment. Especially when job security doesn't exists in these days, too much emphasis on ROWE could hurt the workplace. People need balance.

    Craig
    http://www.budgetpulse.com

  • I love the idea of ROWE – it drives me nuts to have set hours. Of course, one doesn't have to go with ROWE to solve that problem – I could just work whatever 37.5 hours per week I wanted (instead of anything set).

    That being said, it is quite inefficient to have me work a set number of hours per week, period. I am salaried, with a required # of hours per payperiod. It is frustrating to me to work more than that one pay period, and less another, and not be able to flex between the two (I end up working less than my “hourly” salary one pay period, and either billing for non-work or taking PPL for another pay period).

    There is a variation on ROWE that works – pay for deliverable. A freelancer or consultant often provides a service with specific targets, if you paid on that time frame, then it is up to the freelancer to manage time and payment. I actually try to set up all my contracts with a fixed amount of $$ over a fixed amount of time for Items A-G.

  • This drives me crazy because I'm a HUGE fan of efficiency and I consider myself extremely efficient. But I feel no guilt leaving at 5pm because I know how much I've done and how well I've done it.

    I first heard about ROWE from an article about Best Buy and I thought it was the best thing ever. What I've realized is that, as you go further in your career, an informal style of ROWE starts to appear. You have so much work and people “trust” you more (or are just aware of how “good” of a worker you are) so there's less attention paid to your hours and more paid to the results you get.

  • I think that one aspect of work that ROWE misses is that there is efficiency gained from some forms of inefficiency. Look at the studies into how highly connected people improve information flow in organizations. These highly connected people spend a lot of time not getting anything done because they are talking to people. But by getting the right information to the right person at the right time, they can save a great deal of money during product development, help ensure that the product incorporates the best ideas from the team, etc. Take that person out and the product suffers. Paying them for what they have accomplished is the same as taking them out. Unintended consequences…

  • Pingback: consulting health care services | Digg hot tags

  • Pingback: Holiday Travel, Shopping, and Your Retirement

  • Pingback: Friday Finance Findings for November 21st : Generation X Finance

  • Pingback: Weekend Linkage - November 23, 2008

  • Pingback: Signs of Economic Recession: Laid Off Bloggers, Web Sites For Sale

  • Pingback: Saving Money on Christmas Lights - Holiday Deals Edition | Money Smart Life

  • Pingback: Post Weekend Links: Free Dr. Pepper, Jack’s Back, Heat, and the new King of the Cassel

  • I agree with Richard. I'm a freelancer and one of my regular gigs is BIG on efficiency: my days there are planned out in 15 minute increments. However, sometimes I find that I'm not given sufficient time for a particular task – simply because the people who put my plan together don't know or under-estimate how long a specialised task takes.

    If ROWE was brought in, I expect that lots of people would have this problem and would end up doing lots of unpaid overtime.

    Apart from that, I think it's a great idea!