Posted by: itm2011 | May 15, 2011

Trusting your Employee’s: The Case of Best Buy’s ROWE Program

Trusting your Employee’s: A Case Study of Best Buy’s ROWE Program

(NYSE: BBY)

Dochi Nwaigwe

IN 434 – International Management

Company Information

Originally referred to as the “Sound of Music” in 1966, Best Buy Co., Inc. did not bear its corporate name until over fifteen years later in 1983. A specialty retailer of consumer electronics, Best Buy accounts for 19% of the market in the United States. The company’s headquarters is located in Richfield, Minnesota, a suburb outside of Minneapolis. Best Buy operates more than 1,200 stores in the United States, China, Mexico, Puerto Rico and Canada. The company has been named “Specialty Retailer of the Decade”, “Company of the Year”, among many other reputable rankings and lists. Best Buy’s subsidiaries include Geek Squad, CinemaNow, Magnolia Audio Video, and Pacific Sales. After Circuit City went out of business, Best Buy became the primary electronics retail store in eastern United States. However, Fry Electronics still holds as major competitor in western United States. This document presents a discussion about ‘Best Buy’s ROWE Program’.

Company Culture

The culture that is presented by Best Buy, in this case, is one that reflects the transition from traditional business methods to a more contemporary, flexible work schedule. The attitude prior to the change was becoming one of quiet desperation where many employees were growing tired of being overworked. Because of the tension building from disgruntled employees, Best Buy chose to implement a new structure of managing the schedule to increase morale and help motivate the workers. During one of the training sessions one of the managers reflected upon how some of the employees were discussing how sick they were of punching a time clock. His exact words were “ They felt it was almost inhumane.” Because Best Buy acknowledged that they couldn’t demand so much of their employees and give nothing in return they permitted other departments the opportunity to use ROWE (results-only work environment) if their division wanted to.

Although, not all of Best Buy departments were quick to implement the new ROWE, if at all. And even though there were many employees who appreciated more free time at home and the liberty to create their schedules; there were still others that were quite reluctant. For example Denise Lamere, a corporate strategist for Best Buy, used to feel that she had an advantage over her other co-workers because not having a husband or children gave her the competitive edge of having less exterior distraction, therefore allowing her to be one of the first people into the office and one of the last to leave.  As for departments that were not willing to apply the ROWE program was the legal department. They felt as if it would reduce the amount of money they would make, and also potentially leave the company very vulnerable if no one is in the office available to handle any emergence.

The ROWE program has helped change the culture in a positive way at Best Buy. The company has seen an increase in employee morale, a rise in productivity, and a reduction of voluntary turnover. Because of the program, many managers had to take a step back and reevaluate their relationships with their employees to see how much pressure they were applying and the level of stress it was causing. After that the managers were able to create a more organized method of reaching the employees that required building more trust and developing a deeper understanding of their employees strengths and weaknesses.

ROWE  Program

         The approach that Best Buy has taken towards organizational change through the use of the ROWE program was developed 6 years ago. The ROWE program is the type of schedule that does not focus on time clock and how many hours worked, but results and if the job is completed. As opposed to work being a place you go, work is something you do. The emphasis is placed on trust. Trusting that an employee will do his or her part on their own time. The idea is that in allowing people the freedom to choose when they want to work they will work when they are most motivated or focused.

This philosophy was not well received by the whole organization though especially by the managers, as previously stated. The job of the manager had to evolve and with it so did their perspective towards their position. The age-old tradition of a manager being a taskmaster who’s primary concern is to stand over an employee’s shoulder authoritatively and prevent them from slacking off was going to be restructured. The new design required a system in which all employees’ schedules could be accounted for and that everyone was in communication with one another.  This was done through the use of cell phones, since they never knew when or who was in the office and by the managers being informed of their employee’s schedules for that week.

There is always going to be resistance to change, be it an individual or an organization, because people become comfortable and fear the unknown that exists with change. This has been touched upon earlier with examples on the individual level and on the organizational level. On both accounts the primary cause of the resistance is clinging to the old ways.

For the individual’s case we will go back to Denise Lamere, the corporate strategist, who expressed her reluctance towards the ROWE program. She believed that she had an advantage in the previous system because she had no family to distract her from work. With the new system that was being introduced she, like many others, had to step back and take another look at their definitions of success. In the past she prided herself on always having lunch at her desk and not in the cafeteria. In fact, she admits that she used to gossip about other co-workers who would return late from their lunch breaks.

On the organizational level it took more time to make the transition.  In the beginning, the process was moving slow because many employees were hesitant to do something without being asked or consulting someone first. Although, after that initial hurdle was passed production improved dramatically. Also there was the issue of developing a new style of management. There would have to be completely new design to the matter of which the managers could regulate the employees and make sure that the company was still competitive.

The Work Environment

         The work environment to begin this case was already stressful for many of the employees. The source of the initial stress was the fact that many of the employees felt they were being over worked. The managers also played a part in making the workplace more of a stressful environment. Because of the negative energy that this was creating corporate decided to try a more flexible system of scheduling that permitted employees to determine their own hours. This restructuring was not an easy process, therefore resulting in producing more stress but it would relieve any. People were stressed because they didn’t know how the change would affect them. They were worried that they may lose their competitive edge or receive less pay. Also some people generally like schedules and feel that the new system will be disorganized. There are a few factors that are creating the stress existing in this case.

Conclusion

The organizational change has greatly benefitted the culture at Best Buy. Many of the employees that were considering leaving have vastly decreased. There were reported cases of many people after training sessions breaking down and crying because they were so happy they would be able to spend more time with their family members. From an organizational perspective, I feel that the new emphasis placed upon managers trusting their employees is the most crucial change. Trust helps not only improve morale but can also be a strong motivator. When you take the time to trust the people on your team you give them the opportunity to prove themselves. If they succeed it helps twice over, in that not only does the manager know they can do the job but also the employee now knows they can, which strengthens their self-confidence. Since under the ROWE program managers do not walk around inspecting desks the employee will feel more comfortable, and when one is relaxed their mind is less distracted allowing them to be more focused and efficient.

 

 

SOURCES

Best Buy’s ‘Results Only Work Environment’: Changing the Productivity Paradigm?

http://www.icmrindia.org/casestudies/catalogue/Human%20Resource%20and%20Organization%20Behavior/HROB092.htm

Smashing The Clock

http://www.businessweek.com/magazine/content/06_50/b4013001.htm

Throwing out the Rules of Work

http://www.workforce.com/section/hr-management/feature/throwing-out-rules-work/index.html

Reworking Work

http://www.time.com/time/magazine/article/0,9171,1083900,00.html

Rethinking the Time Clock

http://money.cnn.com/magazines/business2/business2_archive/2007/03/01/8401022/index.htm

Rajiv L., Irina T., Carin-Isabel K. Best Buy Co., Inc.: Customer-Centricity. April 18, 2006. Prod. # 506055-PDF-ENG

 

 

 

 

 

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