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Employee or Consultant?

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rookie - member
1 posts

In discussing ROWE with a senior member of management at my company, he brought up an interesting debate point. He is a staunch "old school" thinker believing that companies pay employees for TIME, not results (it is fascinating to watch how he clings to this, too).

He retorted that what ROWE suggests transforms the concept of employees (I know; I thought the same thing). "What you are saying is that there are no employees. Everyone basically becomes a consultant or a contractor. You would have to negotiate for every task you want done. What about benefits? You don't pay your plumber--a contractor--benefits. Are you willing to give up benefits? What about worker's compensation? What happens if you stub your toe while walking from your kitchen to your laptop? Is the company liable? How will you deal with OSHA standards? You CAN NOT run a business like this! What you are proposing is preposterous..."

My response was that they were all valid concerns that must be looked at, but there are hundreds, if not thousands, of companies that offer telecommuting arrangements, for example. They must deal with the same hurdles, so clearly there are answers.

The debate went on for a little bit, and we agreed to come back to it another time (because we had to get back to "work").

I am still working on his concerns in my mind, though. In a ROWE:

Is an employee still an "employee", or do they become independent contractors?
What happens to benefits, like health and life insurance--do they become the employee/contractor's responsibility?
How do you deal with Worker's Comp. issues if there is no standardized office place? Same for Safety/OSHA compliance?

What do you think?

rookie - member
6 posts

Great question! I believe a ROWE makes employees true exempt employees, not contractors. Contractors are often selected to perform specific tasks at an hourly rate whereas exempt employees are paid for results and to perform a role. In a true ROWE, results and outcomes are rewarded - not the individual activities. Also, ROWE removes time restrictions so that employees to focus on counting hours like a contractor might instead shifting focus to the outcomes. Employees in a ROWE are more like owner-operators with a stake in the business because of increased loyalty and engagement.

novice - member
16 posts

arkanjel,

Marissa's got it. 'nuff said.

C&J

rookie - member
7 posts

I think that is a perfect explanation. I believe your boss is stuck in the exempt/non-exempt paradigm, and I don't envy you trying to get him out of it.

__________________
John C. Harris, MPA, MBA, Green Belt
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