How flexible work actually works

November 9, 2011: 6:00 AM ET

Imagine unlimited paid vacation and sick leave, with no mandated office hours. Chaos, right?  Not according to a handful of award-winning employers profiled in a new report on effective workplaces.

By Katherine Reynolds Lewis, contributor

FORTUNE -- At MeetingMatrix International, a communications firm based in Portsmouth, N.H., employees have no defined work schedules, unlimited paid time off, and meetings are optional. How do they ever get any work done? That's actually the only thing that matters: results.

MeetingMatrix executives point to longer customer support hours, increased sales during a down economy, and 100% retention as evidence that their focus on the end results -- and not hours in the office -- works.

"When you start treating people like adults, they start acting like it," says the company's CEO Jmichaele Keller, who in 2008 shelved his company's employee monitoring systems in favor of a more flexible approach. Under the new regime, "people have a lot of ability to shape what is going on in their world and not a lot of micromanaging.... There really is no direct tie in an office environment between the amount of time spent and the productivity of that individual."

MeetingMatrix is among 262 organizations to win an Alfred P. Sloan award for excellence in workplace effectiveness and flexibility this year, the winners of which were announced today by the Families and Work Institute and the Society for Human Resource Management.

The top 10 employers on this year's list, based on overall score, were the Arizona Foundation for Legal Services & Education, Bryson Financial Group, the Greater Dayton Area Hospital Association, Humanix, McGladrey, Menlo Innovations, Microsoft (MSFT), Rose City Mortgage, Ryan LLC, and the Shodor Education Foundation.

Faux-flexibility vs. the real deal

"Because of the recession and because of the global economy and because of technology, work has become so much more demanding," says Ellen Galinsky, president and co-founder of the Families and Work Institute. Galinsky says that successful companies have begun to tackle these challenges by legitimately loosening their hold on their employees rather than resorting to halfway measures.

For instance, companies that replace a 9 to 5 schedule with "flexible" hours of 7 to 3 aren't necessarily accommodating employees' need to handle personal affairs, whether it's a sick child, leaky bathtub, or car repair. Other businesses are redesigning work such that incentives and rewards are aligned with the results that an employee delivers -- not the hours that they show their faces in the office, Galinsky says.

Take Ryan, a tax services firm based in Dallas. A few years ago, a resignation letter from a rising star in the company prompted CEO G. Brint Ryan to reevaluate the firm's focus on long hours and face time.

The result: MyRyan, a software package that displays the performance objectives that truly matter for each employee and the team, whether it's revenue targets, 360 review scores, customer service ratings, or other things. Ryan employees no longer need to account for their time -- as with MeetingMatrix, staffers can take unlimited paid vacation and sick days.

"Hours no longer are the key focus," says Delta Emerson, a senior vice president at Ryan. When the compensation committee met this year to evaluate performance and decide on pay raises, employee hours were not even mentioned.

Voluntary turnover at Ryan decreased to 6.5% from 18.5%, and involuntary turnover (in other words, firing poor performers) increased to 6.9% from 4.3%. Despite the recession, the firm posted record profits and revenue in both 2009 and 2010. "In the past, somebody who was putting in a ton of hours could be performing poorly, but the hours would carry them. That no longer happens," Emerson says.

Ingredients for a flexible office

Any company hoping to implement flexible work should invest in IT that will make it seamless and efficient. Ryan employees, for instance, need to access large databases in order to work remotely, Emerson says.

MeetingMatrix uses Microsoft Lync to connect every employee around the globe. They show that they are available via instant messaging, and understand that they could be called on their cell phone on a day off if they are needed, says Keller.

Similar changes are underway at companies like Delta Airlines, Ounce of Prevention, and WellStar Health System, giving employees more control over their schedules, according to the FWI-SHRM report. Delta employees can choose the schedules they want to work and can swap shifts. WellStar lets employees schedule themselves via a web-based tool, collaborating with coworkers to make sure that they are covered, according to the report.

To be sure, it's a greater responsibility to ensure that you meet your job objectives than to simply be expected to place your body in an office chair for eight hours. Ryan employees are expected to understand the demands that flexibility places on them. You can't just direct people to call you if anything pops up.

"It's not that your personal life takes complete precedence over the business. You may be missing that soccer game you wanted to go to because there's a huge client issue that needs to be resolved," Emerson says.

Just the same, some companies have taken a different approach to the always-on nature of flexible work. The Habitat Company, a Chicago-based real estate firm, established an e-mail policy that responses should only be expected during business hours, as part of an overall flexible culture.

With the right training, you can start to break the habit of equating hours worked with productivity. "People can get very judgmental of each other based on their own personal scripts," Emerson says.

Three years after Ryan changed its policies, "people feel comfortable to come and go and do their personal stuff without having to feel they have to explain," she says.

Editor's note: A previous version of this story incorrectly stated that 450 organizations received the Alfred P. Sloan award this year. The correct figure is 262. 

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About This Author
Katherine Reynolds Lewis
Katherine Reynolds Lewis
Contributor, Fortune

Katherine Reynolds Lewis is an award-winning Washington D.C.-based journalist specializing in finance, work, and family issues. She has written for publications including the Fiscal Times, Money, MSN, the New York Times, Parade, Slate, USA Today magazines, and the Washington Post Magazine. Previously, she worked as a national correspondent for Newhouse News Service and reported for Bloomberg News in Washington. She began her career in New York at the Bond Buyer, after graduating from Harvard College with an A.B. in physics. She is active in the Asian American Journalists Association and serves as founding co-chair of the AAJA Digital Group.

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