**United States**: Neiman Marcus Group’s innovative approach to work flexibility has significantly improved employee retention and productivity. Under former Chief People Officer Eric Severson, the company shifted focus from traditional attendance to results-driven performance management, showcasing a successful model for balancing autonomy and accountability in modern workplaces.
The conversation surrounding work flexibility versus traditional office presence is gaining traction, especially as businesses navigate the changing landscape post-pandemic. A recent analysis highlights how the culture of accountability and results-oriented environments at Neiman Marcus Group (NMG) has led to significant performance gains, showcasing the potential of flexible work practices.
The debate commonly arises as many CEOs express the necessity for employees to return to the office, citing a desire to enhance “culture” and maintain visible, bustling office environments. However, this view often conflates presence with productivity. Research indicates that a focus on results-based management, integrated with flexibility in work arrangements, can benefit both employees and employers by reducing stress and attrition rates while boosting overall productivity.
Eric Severson, who served as Chief People Officer at NMG from 2019 until its acquisition by Saks Global in December 2024, has observed these dynamics first-hand. During his tenure, he implemented a framework known as the NMG Way of Working (WOW), which prioritised employee autonomy in exchange for accountability for results. “We wanted to get the best out of our corporate associates. But we also needed to address the needs of operations associates,” Severson explained, highlighting the strong business benefits of reducing turnover, especially in retail positions where attrition can exceed 75%.
This shift in management strategy has yielded impressive outcomes. NMG recorded retention rates in stores consistently above 75%, significantly higher than the retail industry average. Furthermore, retention in their supply chain roles reached 78% in 2024, showcasing a stark contrast to broader industry trends. The company’s ability to attract talent improved, reducing the time-to-hire for front-line associates by double digits year-over-year.
The enhanced performance metrics at NMG were not merely by-products of a temporary shift in response to the pandemic. Severson’s approach was rooted in a battle-tested strategy that had previously yielded success at Gap, where he first demonstrated the effectiveness of a flexible work model, leading to a 50% drop in turnover and a 10-point increase in engagement scores.
At NMG, store operations transformed as leadership began rewarding front-line workers based on performance metrics such as sales per hour rather than mere attendance. This empowerment allowed associates to have greater control over their schedules and work environments, while also investing in new tools to facilitate remote work and task management.
Key to the success of this model was a focus on systematic performance management. NMG replaced traditional annual performance reviews with structured quarterly goal-setting, emphasising individual accountability and professional development. Severson noted, “Managers couldn’t simply raise the bars arbitrarily, and employees couldn’t hide behind a lack of clear deliverables.”
To support this framework, NMG invested in resources that facilitated remote working arrangements, cutting down on office space and reallocating funds towards a redesigned headquarters that promoted collaboration. Establishing core hours helped to create boundary management for corporate employees spanning across different time zones.
Severson identified several key practices for successfully implementing a results-driven, flexible work environment. These include: reinventing performance management to encourage transparency and communication, closely tracking a variety of performance metrics alongside traditional business indicators, and investing in the necessary tools and infrastructure that enable flexibility.
NMG benefitted from a combination of improved retention rates and heightened productivity, leading to an increased number of high-performing employees capable of driving substantial revenue. The company also saw a notable rise in internal promotions, as employees were granted the opportunity to demonstrate their abilities within the organisation.
Interestingly, during the period leading to its acquisition, NMG experienced an increase in employee retention, a notable feat amidst the usual talent exodus that plagues many companies during such transitions. This retention is reflective of the solid work-life balance fostered by NMG’s flexible work policies, enabling individuals to contribute effectively and responsibly.
As the argument for return-to-office policies grows among some leaders—illustrated by figures like Michael Dell and the current U.S. president—NMG’s experience underscores a contrasting narrative. Citing potential pitfalls in rigid management practices, NMG CEO Geoffroy van Raemdonck remarked that compelling leaders to monitor employees often stems from a lack of established accountability systems. “The biggest benefit we got was the pride people feel — and that translated to economic results,” he said.
NMG stands as a potential model for businesses aiming to navigate the complexities of workplace culture. The company has demonstrated that fostering trust, measuring essential outcomes, and creating frameworks that balance autonomy with responsibility can lead to enhanced performance and employee satisfaction, ultimately reflecting positively on business value.
Source: Noah Wire Services
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