Getting Results – Performance vs. Putting in the Hours

By Elizabeth Harrin (London)

“In my 20 years of experience both as a practitioner as a VP of Operations & Supply Chain and as a Business Consultant and entrepreneur across multiple industries and globally, I’ve found that those work environments focused on results over presence are at least 80% more likely to achieve bottom line results,” says Lisa Anderson, President of LMA Consulting Group, Inc. “It is amazing how much effort and hours seem to be valued in the traditional business environment yet they have no correlation to business results.”

Results are what keep businesses in business, so it’s strange to think that the Results-Only Work Environment, or ROWE, movement is a relatively new thing. Developed by Cali Ressler and Jody Thompson, ROWE is different to flexible working policies: it says that you do what you need to do in order to achieve the specified results.

Financial Rewards for Results

A results-only policy works when employees know what results are expected. “I select very small and measurable objectives for this purpose,” says DeAnne Merey, President of DM Public Relations, which uses results-only approaches to incentivise employees. “These goals are intended to align the interests of my associates with those of the clients. However, in the rare instance when the objective doesn’t further a client goal, the bonus system still applies.”

Bonuses are applied for every successful project, although each associate is given a base salary as well. “It’s fun for them to have an unlimited opportunity to earn bonuses throughout their day,” Merey says. “They enjoy calculating their bonuses each pay period so they always have more than their salary. This is the payment structure that I wish I had when I worked for others.” The more work they do, the more Merey’s employees are compensated.

Financially rewarding people on results means that there isn’t the opportunity to reward employees for length of service and loyalty. Merey has found a way round that, through tying extra rewards to the calendar. “I factor longevity into Christmas bonuses, which are not performance based,” she explains.

Develop Results-Based Objectives

“I’ve seen many project teams achieve 10 to 20 times the impact through a rigorous focus on results,” says Anderson. “The key is two-fold: performance management processes focused on specific, results-oriented objectives supported with solid leadership. Otherwise, a results-oriented work environment can result in disaster. Employees will not be comfortable with the environment up front as it is likely to be opposite of what is typical – and suddenly accountability is heightened. Yet if the objectives are jointly developed, fully understood and backed with solid leadership and support, it will become a significantly more rewarding environment in the long run. Those companies who implement this philosophy successfully will leapfrog their competition, as there is a severe shortage of excellent leaders.”

Avoiding the Pitfalls of Focusing on Results

It’s not just a case of setting clear objectives and letting your team get on with it. Managing a results-only work place takes effort from the senior executives.

“If a new hire fails to secure any bonuses, this could be demoralising,” says Merey. “However, the program is structured so that bonuses should not be outside the reach of anyone for each pay period. If many pay periods elapse without a bonus, we have to re-evaluate the employee’s value to our firm, and that is not necessarily a bad thing.” A focus on results will certainly flag up employees who are not performing adequately – and senior managers need to be able to deal with these cases appropriately.

“A pure focus on results can actually make it less likely that you’ll accomplish what you set out to do!” says Stephen Balzac, President of 7 Steps Ahead, an organisational development and management consulting firm, and author of The 36-Hour Course in Organizational Development. “Focusing entirely on results will frequently reduce risk taking, experimentation, and innovation; the company can become stuck in one way of doing things.”

Balzac suggests that it’s better to identify processes that will lead to the desired results and will also let you constantly adjust and improve your processes. “If the only thing that matters is crossing the finish line, once you have something that works, you’re less likely to experiment with different ways of running the race. If you assume that running is the only valid mode of transportation, you’ll lose to the person who rides a bike or drives a car!”

Balzac also points out that results-only environments may work well for some types of organisations, but not so well for others that require team work. You couldn’t for example, set shop assistants a financial target for the day and let them close the shop when that target had been hit. Customers would soon get annoyed at the irregular hours of the shop, and choose to buy their products elsewhere. The same goes for customer service telephone support and call centres. “What is the goal of having employees in the office?” he says. “If your organisation requires strong teams and people working together, then it makes sense to have some ‘face time’, provided that face time is oriented around the goals of building the team. Having people in the office for the sake of being in the office is not particularly useful.”

Focusing on Individual Performance

Even if you aren’t in a full ROWE workplace, as an individual you can still bring aspects of ROWE to your day-to-day work.

“People are so confused on what loyalty and hours worked actually translate into,” says James Sinclair, Principal at OnSite Consulting, a company that turnarounds insolvent and underpeforming businesses. “The reality is that loyalty and hours worked are not the benchmarks a company should set when determining job security or growth. Instead it should all come down to performance. What is the return on investment you can provide your employer on your cost?”

Staying late and being overly accessible eventually grow old, Sinclair warns. Too much of this and your performance starts to suffer anyway. “Performance is the critical point at all times. Performance includes by default all the secondary and tertiary items people are thinking about – problem solving, management, leadership, creative thinking, because they all tie into the return on investment.”

The message, according to the experts, is to ask not what your company can do for you in terms of flexible working policies, but what you can do for your company. Deliver a quality return for their investment, and in a ROWE environment, both you and your company will benefit.