Markkula Center of Applied Ethics

The Ethics of Working from Home

By Margaret Steen

As communications technology makes it possible for employees to work from almost anywhere, businesses are confronting the question of whether doing so makes good business sense, and whether employees should be allowed to do so. A panel discussion called "Economic, Ethical, and Legal Attributes of 'Working from Home'" at the Business and Organizational Ethics Partnership explored the ramifications of this decision.

Yahoo generated a lot of attention when it announced that employees needed to work in their assigned office, not remotely, to increase collaboration. Other companies offer flexible schedules to accommodate workers' child care, elder care, or other personal needs. And some companies have taken a third approach, called ROWE, which stands for results-oriented work environment. These companies look exclusively at whether employees are getting their work done and don't worry about when or where it happened; only its volume and quality.

The panel was moderated by Kristin Major, vice president and deputy general counsel for global functions and information services at Hewlett-Packard Co. Panelists were Patty Woolcock, executive director of the California Strategic Human Resource Partnership; Eric Severson, senior vice president of global talent solutions for Gap Inc.; and Laura Maechtlen, a partner in the San Francisco office of Seyfarth Shaw LLP.

Severson told the story of Gap Inc. and its transformation to ROWE in the early 2000s. In the pre-recession economy, the company had turnover rates as high as 35 percent in professional creative positions. It also wanted to differentiate itself in the talent market.

Severson said in their extensive research, they were "challenged to find anything that suggested that physical presence correlated with productivity or collaboration." They also found that "process measures" such as how much time people spent logged onto the computer network did not correlate with productivity, since an employee who is browsing Facebook is on the network but a creative designer who is sketching new products ideas in the lobby of the building may not be.

Productivity, communication, quality, and service levels all increased after the ROWE program was implemented. Gap found that employees were getting an average of 1 hour more of sleep per night with ROWE, which correlates highly with better job performance. Also, the percentage of employees who exercised regularly nearly doubled.

Although Gap Inc.'s ROWE program allows employees to not work in the office at all, what employees used it for most was to change their starting and ending times, often to save time on their commute time. The percentage of employees working from home did go up but remained relatively low.

For now, Gap Inc.'s ROWE program is only available for its professional workers, since employees in stores can't work from other places. However, Severson said they are looking at how to replicate the spirit of the program in stores, possibly by creating a system that lets employees switch shifts without manager intervention.

Severson said that generally, programs like this decrease voluntary turnover and increase involuntary turnover, as it becomes clear which employees were "always there but not actually accomplishing anything." Gap Inc. cut its voluntary turnover rates in half after implementing the ROWE program. Involuntary turnover tripled, but it was a very small percentage to begin with.

One risk with evaluating employees only on results is that if the expected results are unrealistic, employees may find themselves with plenty of flexibility but still working all the time. Severson said Gap Inc. manages this by measuring employee engagement in quarterly surveys. "You can't have high employee engagement if you're driving employees into the ground," he said. "It doesn't ever work."

Panelists also discussed the real challenges that come with having employees working in different locations, whether those are satellite offices or the employees' homes.

"You have to make things more explicit than you might have when you no longer see people face-to-face every day," Woolcock said. Setting expectations about how quickly remote parties will respond to email, for example, is more important when you can't just stop by their office.

These expectation-setting conversations may be more difficult when they have to be formal, Major said. "When you're in the same office, it's easier to stop by and ask casually about when something will be done."

Making remote work successful also requires more communication about what equipment will be supplied, for example, and clear communication with all employees about how managers decide who is allowed to work remotely.

"I think if you have managers who are trained well and manage actively, then you can manage workers effectively whether they're in the office or out of the office," Maechtlen said.

Margaret Steen is a freelance author.

August 2013


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