After Yahoo, Best Buy ends work-from-home

Best Buy kills ROWE

Best Buy said Monday it has ended its program that let corporate employees control their schedules and how often they showed up at the company's Richfield headquarters.

The program — Results Only Work Environment, or ROWE — evaluated employees purely on performance rather than hours worked or office attendance. People worked when and where they wanted, as long as the job got done. Now most corporate employees will work a traditional 40-hour week, though managers keep some discretion. ROWE, launched in 2005, never applied to store employees, who make up the lion's share of the retailer's 168,000-person global workforce.

The context

American workplaces have been buzzing with debate over telecommuting since Yahoo CEO Marissa Mayer ended work-from-home at Yahoo. Critics say such moves hurt working women; defenders say employees need to be together to collaborate and drive innovation.

Best Buy's move comes amid CEO Hubert Joly's push to remake the struggling electronics retailer. Last week, the company laid off 400 corporate employees, a decision expected to save about $150 million — while also reporting stronger-than-expected sales that impressed Wall Street.

"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," spokesman Matt Furman said. "It makes sense to consider not just what the results are but how the work gets done."

After an investor presentation last November, Joly told the Star Tribune he intended to restore accountability to the company's culture: "In a turnaround transformation, direction needs to come from the top... You need to feel disposable as opposed to indispensable."

The pushback

Not everyone buys the turnaround rationale. Erin Kelly, a University of Minnesota associate professor who has studied ROWE, said companies are scapegoating flexibility programs for deeper market problems: "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." In her research, ROWE departments saw reduced work-family conflict, and employees were less likely to leave — or think about leaving.

The broader trend runs the other way: 63% of companies allowed employees to work some hours from home in 2012, versus 34% in 2005, according to the National Study of Employers (from the Society for Human Resource Management and the Families and Work Institute).

Industry watchers say the real message is symbolic. "They truly want people to be available and present at this particular time to hasten a turnaround," said Carol Spieckerman, president of retail consultancy 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."

ROWE's creators respond

ROWE was the brainchild of two former Best Buy employees, Cali Ressler and Jody Thompson, who later founded the Minneapolis HR consultancy CultureRx. Its clients include Gap, Banana Republic, and H.B. Fuller — and the firm claims ROWE saved Best Buy $2.2 million over three years by cutting turnover 90% and boosting productivity an average of 41%.

The duo, who didn't return calls for this story, had already blasted Mayer's decision in an open letter to the Yahoo CEO: "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?"

Archive summary, March 2013, based on reporting by the Minneapolis Star Tribune.