What Happened When We Killed Timekeeping and Attendance

timepiece

One of the great perks of being an entrepreneur is having complete control over time.

From the time we founded STORM, Pao and I have always worked with a completely flexible schedule.

Actual sms messages:

Dude, coffee shop muna ako this morning.

or

Had a late night, will work from home today

or

Won’t be in the office this afternoon

We never had to be worried that the other person is slacking off. We’ll even tell one another if we need a break to slack off. This is because we trust one another. In the end, I know Pao cares about the firm and will work his tail off for its objectives. I know that goes both ways.

This never became a rule for our employees though.

We followed a semi-flexible work schedule: people came in anytime between 8am to 10am and could leave 9 hours after. You were really only late if you came in after 1oam. Like most firms, we had punctuality and attendance rules: 3 lates merits a written reprimand, 5 lates merits a suspension…something like that.

I never considered anything more flexible. After all, we did have teams like Customer Service and Supply Chain which needed people present in very specific time slots.

How could we do anything more flexible?

As owners, Pao and I still pretty much enjoyed the freedom to go in and out at our discretion. Functional managers also had this level of freedom, but everyone else kept to the semi-flexible rules, with disciplinary actions for violations.

reception

One fateful day though, I was asked to sign a Written Reprimand for someone whom I thought was performing reasonably well.

That disturbed me. The punctuality issues had little to do with the performance.

Why couldn’t we give all our people the same freedom we enjoyed?

And at the heart of it: can we trust our employees first?

True to our form as a company which decides fast and then measures outcomes, I met with Pao and our People Operations team that afternoon.  We created the following rules:

  • From 15 SL’s and 15 VL’s, we created a policy where an individual could use unlimited leaves. Actually, there would be no more “leaves.” We just didn’t count.
  • We totally separated salary and timekeeping. There is now no need to log-in and out of the office. Salary would be given wholly every 15th and 30th. Deductions per timekeeping are now extinct.
  • The 15  SL’s, which was converted to Flexible Benefit Points when unused, are automatically given as Flexible Benefit Points at the person’s daily rate. The person cannot convert this to cash and can only use it on her Benefits Marketplace. We believe in the power of benefits given in kind.
  • For those eligible for OT, the person will now file OT herself, no questions asked. If you think you deserve to be paid OT on a particular day, you just file it, and it will be given to you.
  • Teams with definitive service hours, like customer service and supply chain, were given the directive to create their own rules, to be managed and policed within the team.
  • Leaders were then asked to step up: the company will be monitoring metrics and individual performance much more closely – the leaders have to lead.

We did an impromptu general assembly and instituted the new rules. I told everyone we’ll be doing this for a month and see what happens.

Apparently, the market already had a name for this: ROWE (Results Only Work Environment), I didn’t like the name because I felt it ignored one very powerful factor our firm valued – culture. Alas, the name “Rowe” stuck internally.

Our people loved it. They began posting on social media how great they felt being trusted and being “treated like an adult.”

But of course, the proof would be in the pudding. We locked in on our metrics and let the weeks pass.

The first thing I noticed was how Fridays would be much leaner than every other day. As a lifelong HR practitioner, I felt this was a bad sign.

A month after, our numbers were in, and it confirmed my suspicions. Our metrics were evidently down from a month ago.

I talked worriedly with my management team – did this mean we recruited poorly? After all, shouldn’t the RIGHT people fare well in this sort of environment?

We did another assembly and I told everyone about our results.  I told everyone I was tempted to just pull the program – the results more than justified that move.

But I said we’ll give it another few weeks. I reminded them that things have to change drastically for ROWE to continue. Like most worthwhile things, they would have to fight for it. I told them I WANT the program to succeed, but it would be up to everyone.

Soon, a lot of people in the our Yammer group began sporting this profile picture.

prowe

Weeks went by, and I didn’t really see anything different. Fridays were still extra-lean, attendance-wise. People came in much later than 10am.

I was going to chalk this up to a “Well, we tried” and wreak personal havoc on our recruitment process.

As another month crept in, I asked for the metrics. I was shocked to see the results.

They were up.

At first I couldn’t believe it. But there they were.

Assembly again. I told everyone about the metrics. ROWE was on the resuscitator, but it was alive!

I told everyone I was extending the program to see if the figures were just a fluke.

A month after, the numbers held.

This brings us to today. We’re still very much studying the program. There weren’t a lot of things changed with the original rules we drafted. But before declaring the program as a permanent part of the company, I  still want to generate more data.

Some notable observations and key realizations:

  • With absolute freedom comes…absolute transparency. If there’s one thing about this program, it’s that a person’s true colors will shine. A performer who really makes the firm her own will excel even more because of the flexibility, while people who have discipline and/or commitment issues will have their problems exacerbated.  We had to release a couple of employees whose lack of discipline really negatively impacted the teams they were in.
  • So…Fridays are STILL lean days. But with our metrics being met, I think this is more MY problem. As a lifelong HR practitioner, I think I still very much equated SEEING people with ACTUAL productivity. This is a paradigm shift I have had to swallow.
  • The employee satisfaction that comes from being able to take leaves whenever you want and being trusted for your work IS the biggie. We will trust you first. Will you be worthy of this trust? Most people we see will respond very well to this.
  • For this to work, a company’s metrics and numbers obviously have to be managed well. This is something we continuously work on.
  • Leaders HAVE to step up in this sort of framework. With less structure, more leadership and influence have to be exerted so people will consistently use the flexibility effectively and not abuse it.
  • I don’t believe in purely working from home though. I’m still old-fashioned when it comes to this. I think part of the fun being in a startup is that feeling of being in the trenches with a close group of people. Tough to do that if you aren’t in the same work area. I think our culture and our sense of fun as a company encourage everyone in the firm go to the office even if its strictly not a requirement – a welcome development for me.

The program for us has taken very interesting twists and turns. Promising though.

Let’s see what happens from hereon.

 

Comments

  1. Loved the article, Peter. I heard about this initiative a couple of months ago and was really curious how it was going. The easiest (laziest) way that managers tell themselves that their people are “working” is by making sure that they have their asses on their seats at specific times, which is foolish of course.

    Question: As a tech firm, what metrics and numbers do you manage? I think this is where a lot of firms make mistakes.

    • Thanks Ryan!

      Metrics-wise we’re still a work-in-progress. We have a suite of metrics which every functional head is accountable for. These are myriad in number. Customer Service, for example, has average response turnaround time, average resolution turnaround time, etc…. Supply Chain would have a host of their own metrics. So when I say “metrics” its a large group of numbers which we are constantly tweaking and adjusting.

      • Thanks, Peter. I guess there’s no lazy way out if a company wants to implement this. The leaders really need to pin down the “real” metrics that make sense to the company and their respective business units.

        That’s one positive thing that a company can take away from “experimenting” with something like this, they are forced to find out what these important metrics are.

      • I think the main thing is that there needs to be a pre-existing culture that can support it before one even considers an implementation. One can’t expect the program to create the culture you want. That might blow up in the would-be-implementor’s face.

  2. Keep us posted Peter! I heard about ROWE when I read the book “Why Work Sucks and How to Fix It: The Results-Only Revolution”. Very interesting concept and something I think does work but I do share some hesitations as well. Like what Ryan posted, can you tell us more about what metrics you were tracking?

    • Hey Paolo, thanks for chiming in. Answered Ryan with the metrics question. Haven’t read the book. Is it any good? I’m wary it might just hardsell me their consulting services.

  3. I think the better term is “Result(s)-Oriented Work Environment” or “Result(s)-Oriented Environment”

  4. Looking forward to the follow-up article, Peter.

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