Best Buy: Discontinuing ‘Results Only Work Environment’

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Work culture At Best Buy Right from the time the company was founded, Best Buy had believed in a highly demanding work culture which valued hard work and expected long hours of work from the employees. Employees who gave priority to work and office rather than their personal life were recognized and rewarded. As a result, there was very little work/life balance for the employees of Best Buy. In a well reported instance, a manager of Best Buy once gave a recognition plaque to an employee “who turns on the lights in the morning and turns them off at night.” Employees were closely monitored by their managers during their working hours. Flexibility was unheard of at the company and employees had to stick to the fixed working schedules of the organization.....

Responding to the crisis that the company was facing, two executives in Best Buy’s HR department, Cali Ressler (Ressler) and Jody Thompson (Thompson), developed a new workplace program to address the problem of employee dissatisfaction and the resulting attrition in the company. Together, they developed a program called the Results Only Work Environment (ROWE). Given the deep seated support for a demanding work culture among the top level management of Best Buy, Ressler and Thompson realized that the program might be considered too radical for them to approve................

The ROWE was a unique workplace program which worked on the belief that productivity was the key to success at the workplace. The program emphasized that working did not mean sitting at the office from morning to evening. Rather, work was done in such a way that results were accomplished. The ROWE’s slogan was, “Work whenever you want, wherever you want, as long as the work gets done.” ...

Soon after the program was implemented across the organization, it started giving good results. Work was redesigned with the focus exclusively on the results achieved and performance of the employees. The actual results which were reported by the company as well as research conducted on the program by scholars proved that the ROWE had brought down the attrition levels of employees, increased productivity, helped employees achieve a better work-life balance, and thereby improved their well-being. ........................

Despite its popularity, the ROWE program was discontinued by Best Buy in March 2013. Best Buy’s decision to discontinue ROWE came within a month of Yahoo! Inc. (Yahoo) discontinuing the work from home option for its employees. Yahoo’s decision to discontinue the work from home option in February 2013 was met with a lot of criticism from both employees and industry observers around the world. The discontinuation of the ROWE came within six months of the appointment of its new CEO Hubert Joly (Joly) in August 2012. Before the appointment of Joly, Best Buy was struggling with problems like falling sales due to heavy competition from discount chains like Wal-Mart and online stores like Amazon.com, Inc.............

The turnaround strategy unveiled by Joly started showing good results. For the second quarter of FY 2013, Best Buy’s revenues increased by US$ 12 million to US$ 266 million and the company posted profits for the first time after a gap of one year. The share price of Best Buy which had taken a beating because of the crisis, saw a spectacular revival too (Refer to Exhibit III for the chart of Best Buy’s share price). The company also initiated steps to cut its costs. Just before the ROWE was discontinued, Best Buy laid off 400 corporate employees. This would save the company US$ 150 million. After taking over as the CEO of Best Buy, Joly instituted a new policy in the place of the ROWE called “all hands on deck” ............

Exhibit I:Selected Financials of Best Buy (In US$ millions)
Exhibit II: Revenues, Profits, and No. of Employees of Best Buy from 2003 to 2013
Exhibit III:Chart of Best Buy’s Share Price

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