ROWE and Incentives: It’s a Good Solution, But Maybe Not For Everyone

123RF Stock Photo

What do ROWE and incentives have in common? More than a little. At least that’s the hypothesis I’m floating out here.

What turned my mind to this comparison was a Fistful of Talent post by Tim Sackett last week titled 80 Hours Per Week vs ROWE. In it, he talks about a recent post on his own blog, The Tim Sackett Project (What Would It Take to Get You to Work 80 Hours Per Week), which was meant to address the concept of drawing discretionary effort from workers, but ended up generating a ROWE firestorm. (For any not familiar with ROWE – Results Only Work Environment – go to www.gorowe.com to learn more.)

Reading Tim’s post, and the incredible discussion in his comment stream, I was struck by what I believe ROWE has in common with incentives.

Contingent rewards

For starters, they are both contingent rewards of a sort. With incentives, we tie cash awards to achieving results. With ROWE, we tie freedom and control to achieving results. (Or even perhaps continued employment to results. As Cali Ressler and Jody Thompson put it in their ROWE marketing materials: No Results? No Job.)

Which means you encounter – and must thoughtfully consider and accommodate – many of the same kinds of challenges that you do with incentive design. As Dan Pink is famous for telling us, the biggest issue with contingent rewards is that they focus people – typically on a set of performance measures and defined outcomes – and that this impedes problem solving and creativity. My other issues with Dan Pink aside, he is absolutely “on the money” regarding the focus thing.

We have to be careful about any reward program that focuses attention. A lot of the work done in today’s fast-moving organizations, where sensing and adapting are at a premium, requires people being open to and engaging with the bigger organizational system. The danger with ROWE, the danger that contingent reward poses, is that of focusing people too closely on a set of work goals and desired results in order to earn a “reward,” at the expense of what you also need from them in broader behaviors and availability to the system.

There’s no one-size-fits-all solution

Confession: these ideas are not really of my invention. Because I live and work in the same Twin Cities metro area as the organization that gave birth to ROWE, I’ve had opportunity for a few informal and candid conversations with people who have an insiders view on how the program works in its original home. It is these conversations (with no cameras rolling or books being sold) that have highlighted for me the focus on results and the pursuant downsides that the program is at risk to generate.

Article Continues Below

Don’t misunderstand me. I’m not coming out against ROWE any more than I would come out against incentives. While neither is the universal talent solution it is sometimes portrayed as by its particular fan base, both offer tremendous potential when implemented thoughtfully, in full consideration of context and circumstances, and with the right set of checks and balances.

As our workforces become more far-flung, heterogeneous, remote and contingent, I would expect the lessons, insights and possibilities of ROWE to offer increasing value to the management of people. My point is simply to raise a note of caution regarding the notion that ROWE – or any other particular people intervention for that matter – is an all-upside-no-downside-one-size-fits-everybody solution.

That’s it.

This was originally published on Ann Bares’ Compensation Force blog.

Ann Bares is the Managing Partner of Altura Consulting Group. She has over 20 years of experience consulting in compensation and performance management and has worked with a variety of organizations in auditing, designing and implementing executive compensation plans, base salary structures, variable and incentive compensation programs, sales compensation programs, and performance management systems.

Her clients have included public and privately held businesses, both for-profit and not-for-profit organizations, early stage entrepreneurial organizations and larger established companies. Ann also teaches at the University of Minnesota and Concordia University.

Contact her at abares@alturaconsultinggroup.com.

Topics

Leave a Comment

Your email address will not be published. Required fields are marked *