I was recently introduced to the concept of ROWE (www.gorowe.com) – a concept pioneered at Best Buy by Cali Ressler and Jodi Thompson. The idea is pretty simple – don’t pay people to for the hours they spend, but for the results they produce. The site is a bit limited on the details, but they did impress the white house enough to get a pilot going and now it looks like it’s seeing a wider adoption. The idea of ROWE is not new, but there are a lot of different flavors of how it is deployed and the management process that accompanies it.
It’s interesting to see a number of industries move towards ROWE-style management. Consider Netflix, who became famous for their culture of “no vacation days” with focus on execution: the Netflix presentation on company culture.
The nice thing about FairSetup is that it fits snugly into both Agile and ROWE philosophies. Specifically, it helps manage the expectations across the team and sets up a transparent means of connecting outcomes to compensation through impact – something that, until FairSetup came about, has been incredibly difficult to do. The trouble with MBO, ROWE, etc. is that there is always a risk of focusing too much on the details. For example: boss Mary gives an employee John a goal. Even if John realizes midway through execution that the goal needs to be adjusted, John has little incentive to push for adjustment. Under FairSetup, however, the idea of expectation replaces (or works in tandem with) short-term objectives – the goal is to execute short-term objectives to expectation, but compensation is tied to overall business unit performance.
The overall trend is to gradually move towards compensating people for the value that they create, not the time that they spend.