Counter Point - Absence Management, People Management and Family Values

Great post by the original performance Guy, last Wednesday discussing the impact of Absence Management and commenting on a recent article in Business Week discussing how employers are fighting the issue of employees playing hooky. This topic is of high interest to many people - both in senior management and at the line level. And the reality is that that the approach endorsed by the Business Week article is completely opposed to the reality that organization performance is a function of people.

For the defense, I submit a great article from Jeffrey Pfeffer in the most recent, and regrettably, last issue of Business 2.0. In his article, "It's time to live up to family values," Pfeffer, a professor of organizational behavior at Stanford University's school of business, notes that a key issue for employers is the declining birth rate and the reality is that most employers don't practice what they preach in terms of work / life balance. Among the damning stats:

- 86 million Americans do not get a single sick day to care for a sick child
- The US is the only industrialized nation without a policy of paid leave for infant care
- Many employees don't get paid vacations
- The current policy of 12 weeks UNPAID family leave is resisted by many employers
- Many people and organizations would rather have sick people on the job than at home, at the expense of performance and productivity

Pfeffer notes that the over the last decade, companies on Fortune's list of top companies to work for (Fortune is the parent company of the newly departed B2.0) have notably improved work-family benefits. And those companies typically beat benchmarks for shareholder return. While this is not the entire story unto itself, the top line would seem to indicate that being good to employees and their families is good for the stock and good for performance. Is there a better indicator of strong performance management?

On the flip side of the coin, you have companies that focus on performance, not if the employee is in the office or has punched the time clock. A great example of this is Best Buy, also mentioned in the Business Week article, but with little detail. This is unfortunate, and likely due to the fact that their story runs counter to the slant of the article. Best Buy is on the forefront of the concept of performance impact with their concept of ROWE - Results Oriented Work Environment. The net of this is that performance is based on (get this) performance, not hours worked. Best Buy does not care if you are in the office, they only care if you get something done. The concept is covered in Business 2.0's April edition.

According the the article, more than 60% of the Minneapolis' based Best Buy's corporate workforce at the home office is now managed based on ROWE. If you factor out senior executive staff who are measured on things like EPS, the real percentage is even higher. According to the article, implementing a resulted oriented approach as improved productivity by 35%. You heard that right - the team is more than 1/3 more productive when measured based on what they produce, not what time they show up at the office.

According to a spokesperson in the article, the program "has forced managers and employees to be really clear about what needs to be accomplished". This is interesting for a variety of reasons including the revolutionary idea that performance should be judged on well defined goals, not the number of hours worked, whether you were at your desk promptly at 8am, or whether at performance review time your boss happens to like you.

Interestingly, Best Buy is has not only spun off a consulting organization to impart this success to other organizations, they are also experimenting with the ROWE concept for their retail stores. While there are some obvious hurdles, if they achieved 50% of the performance improvement in store that they have achieved at corporate, the results as measured in sales person productivity and by association, same store sales, would be extraordinary.

Also interesting to note that the companies called out as using software to track absenteeism in the BW article include Wal-Mart, whose contributions to performance management include low or no health benefits and locking 3rd shift cleaning employees in store, and Dell, who happens to have restated their earnings and fired their CEO for playing fast and loose with the numbers. If this smacks of a double standard, it should. Or at a minimum, it is reflective of a corporate culture and how performance is managed and incented or not.

In a performance oriented world, always-on world, it is my strong belief that if employers spend half as much time on employee care and incenting performance as they did trying to play defense against the small number of people who abuse the system, we would all be much farther ahead.