What happens when you give employees unlimited vacation and make coming into the office optional?

That’s what two human resource employees at Best Buy decided to find out. In 2003 they instituted a policy that, they hoped, would assess employees based on the work output they produced instead of their ability to show up in the office every day. They could take as much vacation as they wanted, could work from home without special permission, and could even skip meetings if they didn’t think they were integral to them. But they were also expected to meet predetermined goals and were evaluated based on their ability to do so. The results?

ROWE, among other things:

  • Led to employees sleeping almost a full hour more on nights before workdays, simply because they were less stressed about going to the office.
  • Made people more likely to stay home or go to a doctor when they were sick, which improved overall health and reduced the spread of illness around the office.
  • Allowed people to exercise more.
  • Reduced turnover.
  • Improved morale.

“Our evidence shows that the sense of control over when, where, and how you work really does make a difference in terms of the quality of employees’ lives,” says Moen.

That all sounds great for the employees. But Ressler and Thompson claim the company benefited, as well. According to them, voluntary turnover rates went down as much as 90 percent on ROWE teams, while productivity on those teams increased by 41 percent. (Best Buy’s stock price tumbled in 2008 along with those of other consumer stocks dependent on discretionary spending, and the company has stumbled along to some extent ever since—suffering from broad trends that have slammed many brick-and-mortar retailers.)