I understand the legal implications of working from home however there is one thing that is directly connected and for some reason it really bugs me: trust.
I work in an office from 9am to 5:30 pm - Monday to Friday with the same people for just over a year. I know who loves Facebook - probably a bit too much, who is a morning person and who loves to work at night. I also know that the ones who care about their work and what they do are the ones that get the job done (either in working hours, or later, at home).
There is a contract (the papers that state salary and stuff) which basically requires an exchange; usually is money for some type of work.
Commuting at rush-hours, many and log meetings, I have never seen to improve efficiency.
If you don’t trust your people, why keep them employed? Interesting enough, trust goes both ways: the less you trust me, the less I trust you and the less I trust you, the less interest and care I have towards my job. You might argue that “there will be too many breaks” or “people won’t work”. That might be true from some, but those are the same that work less in the office as well. Also, try to measure “work” on achievement/day not hours/day.
The happier employees are, the more “freedom” employees have, the more they will want to work with and for you and the less reasons you have to doubt them. Give some time for innovation and “personal projects” as well. You will soon realize that the 6 hours you “loose”, you will gain by great product ideas, self-trained staff as more people will actually try to get your business better.
If not, keep on not trusting employees, micro-manage them and carry on with the same results :-).