Best Buy Co. said Monday it has ended its program that allowed corporate employees to control their schedules and how often they showed up at the company’s Richfield headquarters.
Known as Results Only Work Environment (ROWE), the company evaluated employees solely on performance versus time worked and office attendance. Employees worked when they wanted and wherever they wanted just as long as they got the job done.
Now most corporate employees will work the traditional 40-hour week, though managers still have discretion to accommodate some workers. ROWE, which the company launched in 2005, did not apply to Best Buy’s store employees, who make up the lion’s share of the retailer’s 168,000-person global workforce.
American workplaces have been buzzing with debate over telecommuting since Yahoo CEO Marissa Mayer recently ended the company’s policy of allowing staff to work from home. Critics say the move hurts working women, but proponents of working in the office say employees need to be at work to collaborate and drive innovation.
“It makes sense to consider not just what the results are but how the work gets done,” said Best Buy spokesman Matt Furman. “Bottom line, it’s ‘all hands on deck’ at Best Buy and that means having employees in the office as much as possible to collaborate and connect on ways to improve our business.”
The move comes amid CEO Hubert Joly’s efforts to remake the struggling consumer electronics retailer and sustain a fragile financial recovery. Last week, Best Buy laid off 400 corporate employees, a decision that will help save the company about $150 million. Best Buy also reported stronger-than-expected sales, a performance that impressed Wall Street.
Last year, 63 percent of companies allowed employees to work some hours from home, compared with 34 percent in 2005, according to a study by the National Study of Employers, which was produced by the Society for Human Resource Management and the Families and Work Institute.
In 2010, 54 percent of women 16 years and older participated in the labor force, with 71 percent of those women raising children, the study said.
Erin Kelly, an associate professor at the University of Minnesota who has authored studies on ROWE, said companies are unfairly scapegoating flexible work programs for their subpar performances.
“I’m concerned that these flexibility initiatives and telework initiatives are getting blamed for what may be other problems those organizations are facing in the broader market,” Kelly said.
In her research, Kelly said ROWE “reduced work-family conflicts. In the period we were studying employees in the ROWE departments, they were less likely to leave the company and less likely to be thinking about leaving the company.”
But industry experts say Best Buy and Yahoo, each led by a new CEO who inherited companies hobbled by dysfunctional cultures, are trying to send a broader message to employees, male or female, that they mean business.
“They truly want people to be available and present at this particular time to hasten a turnaround,” said Carol Spieckerman, president of retail consulting firm newmarketbuilders. “In a lot of ways, it’s a symbolic way for Best Buy and Yahoo to remind their employees that the old ways are not going to guide the company.”
After an investor presentation last November, Joly told the Star Tribune that he intended to restore accountability to the company’s culture.
“In a turnaround transformation, direction needs to come from the top. I make sure it gets to a conclusion based on fact," Joly said. "You need to feel disposable as opposed to indispensable.”
ROWE is the brainchild of Cali Ressler and Jody Thompson, two former Best Buy employees, who later founded CultureRx, a Minneapolis-based human resources consulting firm. In addition to Best Buy, CultureRx’s clients include Gap, Banana Republic and H.B. Fuller.
According to their website, CultureRx claimed that ROWE helped Best Buy teams save $2.2 million over three years by reducing turnover by 90 percent and boosting productivity by an average of 41 percent.
Ressler and Thompson did not return a call seeking comment. But in a recent open letter to Mayer of Yahoo, the duo blasted her decision to end remote workplaces.
“We are having a very hard time understanding how this will benefit Yahoo and how your employees can ever really trust you again,” the duo wrote. “We don’t think you deliberately meant to send a message to Yahoo employees that you are an Industrial Age dictator that prefers to be a baby sitter versus a 21st century CEO that can lead a company into the future. Or did you?”
Thomas Lee • 612-673-4113