Do Results-Only Workplaces Really Work?

What is ROWE?

ROWE is an HR strategy that revolves around how employees are paid. Rather than paying employees for the number of hours they work, companies that use ROWE pay employees based on their work output. Employees don’t need to work certain hours or even in the office, so long as they meet their performance metrics. They have complete autonomy over their projects, including how they want to work on them and how much time they dedicate to them.

This is different from a work environment with “flexible hours,” as there is still an expectation within those environments that employees will work a certain number of hours.

What is the idea behind ROWE?

The concept of ROWE is relatively easy to grasp. An organization’s primary goal is to succeed. Their most valuable tool in working toward that goal? Highly skilled, highly motivated employees. And those employees are most driven to succeed when they work in a relaxed, comfortable environment and feel appreciated for their expertise and accomplishments. [Read related article: The Benefits of Highly Motivated Employees]

ROWE aims to provide that relaxed, comfortable environment while eliminating the customs of a conventional office. An ideal ROWE has no set hours and no required meetings. Employees aren’t even required to come into the office — at all. They have total autonomy over where, how and when they work. The only measure of value is the results they deliver.

With ROWE, an employee’s performance is measured entirely on their delivered results. Productivity is measured by output, not hours worked or face time put in. Therefore, much of an employee’s work can be done at home (or wherever else they might choose to work), on the employee’s schedule.

What are the pros and cons of ROWE?

Should your business explore a results-only workplace? That’s a big decision — and one that deserves a lot of thought and discussion. Below, we’ve put together a basic list of the pros and cons of ROWE to help you get started:

Pros of the ROWE model:

• ROWEs require less physical space because fewer employees spend time in the office.
• Employees use fewer sick days and take less time off because they can better work around appointments, illnesses and other events.
• Employees are healthier, happier and have less work-related stress.
• ROWEs are environmentally friendly, saving both energy and commuting expenses.
• ROWEs increase employee satisfaction and decrease employee turnover, thereby reducing hiring and onboarding costs.
• Companies that have been able to effectively implement ROWE report a significant increase in productivity.

Cons of the ROWE model:

• ROWEs can be challenging to manage since it’s often harder to communicate with remote employees who work varying schedules.
• ROWEs open up the possibility for unethical behavior since value is only measured in results — not how the results are reached.
• Employees who find self-discipline or self-motivation hard may not succeed in result-only work environments. 
• The ROWE model doesn’t work for everyone. It’s impossible for consumer-facing fields like customer service or retail, and difficult for highly collaborative companies to implement.

ROWEs hold benefits for both employers and employees. However, these workplaces also comes with potential drawbacks that organizations should consider. When determining whether it’s right for your business, take the time to weigh the pros and cons in relation to your company’s needs.

Does the ROWE model get results?

For many businesses, the advantages of ROWE outweigh the disadvantages, and the ROWE model gets them the results they are seeking. Employers everywhere are constantly looking for ways to attract and retain top employees — without having to pay for large wage increases or expensive benefit plans. A great way to do that? Providing a completely flexible, completely results-based work environment.

It’s a big draw for workers, with flexibility topping the list of desired employee benefits and more employees choosing to work from home every year. An Integrated Benefits Institute study found that nearly half of employees would actually quit their jobs if they had to go into the office 

full time. The ROWE model can help eliminate that possibility and increase overall employee satisfaction. As research has shown, keeping employees happy is good business. Employee satisfaction can be linked to increased productivity, engagement, attendance and retention.

What companies use ROWE?

Businesses will find that many top competitors follow a ROWE model despite some drawbacks. These companies believe that making employees have a stake in their success will benefit everyone from top to bottom. According to the head of CultureRX, Jody Thompson, ROWE models make every employee 100 percent accountable and autonomous. Companies that started or changed over to a ROWE model include WATT Global Media, JL Buchanan, World Wide Webhosting and Summit CPA.

The most well-known ROWE Fortune 100 company is Best Buy. Best Buy started the strategy at its headquarters and included all 4,000 then-current employees in the initiative. ROWE seems to work well at companies that implement the human resources model. When instituted by Best Buy, the company reported productivity increases of 41 percent and 90 percent lower turnover rates between 2005 and 2007, according to CBS News.