I think flexible work hours are great in a motivated group with clear goals but they could be costly if you have an unmotivated group doing it for the paycheck.
Right! However the employee actually has a couple of choices at this point... either they can have a lot of free time, start a startup, go snowboarding, etc, or they can go to their manager and negotiate. From what I've heard, both of these actually occur.
Another interesting trend is that employees tweak what they're doing and start working more efficiently, increasing a teams output by as much as 35% without working "more".
> [it] could be costly if you have an unmotivated group doing it for the paycheck
It would appear that lack of motivation shows up in lack of results and the unmotivated group quickly has to find another job. In one case, a company fired nearly 90% of a particular department, but the retention rate sky rocketed, so their costs went way down, even when you include the cost of having to look for and hire new people.
http://gorowe.com/
The basic tenet of ROWE is to stop doing busy-work, and start doing only what matters. Stop wasting everyone's time. All meetings are optional. You work when and where and how you like, as long as the job gets done. That's key, by the way... as long as the job gets done.
The most common objection in the corporate world seems to be "but how will we know if people are doing their job if they aren't in the office from 9 - 5?" and the answer, of course is "how do you know now?" (hint: for the most part, you don't, unless you have clear goals and are judging people solely on output rather than on face-time etc.)
In a start-up this is hardly an issue!