Rethinking the Time Clock

Best Buy is getting rid of its time clocks--and wants to persuade you to get rid of yours too.

By John Brandon, Business 2.0 Magazine

(Business 2.0 Magazine) -- If you walk into a Best Buy store this summer and see a tanned, rested sales-clerk clocking in or out of his shift on a whim, congratulations. You may have stumbled on a radical experiment: letting store employees work when they want.

You may also be looking at the future of your workforce, if Best Buy (Charts) has its way.

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Management consultant Judy Thompson says traditional work schedules are outdated since today's employees are capable of managing their time.
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With a classic flextime structure, workers arrange their schedules with their boss in advance. But under a program called Rowe, for "results-only work environment," the boss has no say in scheduling and can judge employees only on tasks successfully completed - even if none were done in the office. The five-year-old plan now covers 60 percent of the employees at Best Buy's corporate headquarters near Minneapolis.

And by all accounts, it's working. Employee productivity has increased an average of 35 percent in departments covered by the program. Rowe "has forced managers and employees to be really clear about what needs to be accomplished," says spokes-woman Dawn Bryant.

Flush with the success of Rowe in its white-collar world, Best Buy is about to start testing the program in select retail stores. The company won't release any details on this pilot project, and skeptics abound. "It's pretty tough to 'phone it in' or work on your own independent schedule in retail," says Susan Seitel, president of Minnesota-based Work Life & Human Capital Solutions.

But if successful, the program could address the retail industry's biggest problem: Historically, annual employee turnover at big-box stores is close to 100 percent, according to AMR Research senior vice president Judy Sweeney. That means that all the clerks in an average store will quit or be fired within a year.

Best Buy, whose retail floor staffers are known as "blue shirts," is particularly notorious. Ex-employees fill MySpace groups like the Best Buy Losers Club with complaints about draconian scheduling practices. The company says turnover costs - recruiting, training, and loss of operational time - are $102,000 per blue shirt, or about 250 percent of their salary.

Meanwhile, Best Buy isn't satisfied with overhauling its own work environment: It wants to use what it has learned to install the Rowe program in yours too. To that end, a spinoff consulting company called CultureRx was formed in November 2005 and is currently in talks with other Fortune 100 firms.

"Stay tuned," says CultureRx co-founder Jody Thompson. "Rowe can work anywhere."

Even in a retail environment? Yes, says Phyllis Moen, a sociology professor at the University of Minnesota who is conducting a Rowe study. "It's not about being free to come and go," she says, "but being free to come and go based on getting the work done, so covering the show floor will necessitate coordinating with others. It's a revolutionary idea." Will the revolution sweep the rest of corporate America?

We'll find out - in due time.

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.