Environmental factors affecting office worker performance : a review of evidence

38 Pages·1999·4.475 MB·English

by  Chartered Institute of Building Services Engineers

Environmental factors affecting
office worker performance:
A review of evidence
CIBSE Technical Memoranda TM24: 1999
*R
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Contents
1 Scope of review and types of supporting evidence 1
2 Definition of productivity 1
3 Measuring productivity
3.1 Performance measures
3.2 Self-assessed productivity
3.3 Staff costs and profit
4 Factors affecting productivity 5
4.1 Psychological processes and motivation 5
4.2 The effect of organisational factors 9
4.3 The effect of physical factors 10
4.4 Multiple environmental factors and case studies 19
4.5 Individual control 21
4.6 Summary of evidence 22
5 Conclusion 24
References 25
Scope of review and types of supporting evidence 1
Environmental factors affecting office
worker performance: A review of evidence
1 Scope of review and types environment, are placed in unnatural environments and
are asked to carry out simple performance tasks (see
of supporting evidence
Section 5.1). Office surveys tend to be conducted by
psychologists interested in the effect of environmental
Of the UK’s workforce over SO%, equivalent to over 10 and/or organisational factors on productivity. Most of
million people now work in offices, compared with 20% in the environmental studies are cross-sectional surveys,
1911(’) and forecasts of 80% by the year 2000(2). As a rather than full experiments (e.g. involving an
consequence there has been a dramatic increase in office intervention, and control groups), and they mostly
space, for example 40% per person in London over the last depend on self-ratings of performance rather than
20 years. Furthermore, the life cycle of an office building objective measures of productivity. The organisational
is around 20 to 50 years, and typically a building lasts 40 studies are better but depend on a barrage of long-term
years. Buildings are therefore both a substantial investment measurements which include a subjective element. Case
and potentially a long-term commitment. From the studies provide a valuable insight into the benefits of
occupiers’ point of view, building costs are the second- office improvements but the effects of environmental and
largest cost after staff and are typically 8 to 30% of the organisational change tend to be confounded. Design
total revenue, accounting for the initial cost over life- guidance tends to be based on the practical experience of
cycle, or rent, and running costs (see Section 3.3). To design consultants rather than being supported by
maximise on return and encourage sustainable scientific evidence.
development (e.g. ensure the building is always occupied)
It is acknowledged that the effect of the environment
it is therefore imperative that the office building is
upon productivity has been examined in many other
designed and functions in a way appropriate to support .
literature reviews For example, A~liciems(~L)o, rsch and
the activities that take place within it. Occupiers expect
Abdod4), M~Intyre‘~P)a,r sond6), Ramsay and Kwon(’) and
the office to provide a satisfactory and productive working
Wing“) reviewed the effects of temperature, Abdou and
environment to maximise the return on their costs
Lorsch(’) discussed the role of air quality, and Davies
(building and staff). What, then, constitutes a productive
and Jones(”) and Kryter‘”) adequately covered the effects
workplace and what are the key elements to designing it?
of noise. In addition, Croome and Baizhan(’2), Jokl(13),
Indeed, does the design actually affect productivity?
Lorsch and Abdou(I4), Oseland(”), Oseland and
Williams(16),S ~ndstrom(’~W),h itley‘”) and Wyon(”) have
As a first step, this report aims to present a state-of-the-art
all provided general reviews covering most aspects of the
review of literature which provides evidence of how the
physical environment. This report is justified because,
physical environment affects productivity in the work-
firstly, it provides an update to these reviews and,
place, in particular white-collar (knowledge-based)
secondly, most of these reviews have concentrated on the
workers in offices. This review presents the results of
physical rather than the non-physical environmental
scientific research and is not intended to provide practical
factors that affect productivity.
guidance on how to create a productive workplace (this
will be provided by a subsequent publication of the Office
Productivity Initiative). The review includes only
2 Definition of productivity
documented, rather than anecdotal, evidence or that
obtained through on-going discussion with end-users and
practitioners. Productivity is generally expressed in terms of efficiency,
e.g. as the ratio of output to input. Lorsch and Abd~u(’~)
There are many sources of written information, which can express productivity as ‘a measure of what can be achieved
be grouped in terms of: (a) early industrial fieldwork; (b) by human beings with the least effort’ and they also state
laboratory studies of performance tasks; (c) field surveys that ‘productivity is the ratio of output to input’. Guzzo
and experiments conducted in offices; (d) case studies; (e) and Bandy(") agree that productivity is the ratio of output
design guidance; and (f) previous reviews. All these to input and add that the productivity of a company is
sources of information have merits but they also have determined by the technology to transform the input to
problems associated with them when one is interpreting output and the performance of the workers. Similarly,
their relevance to the impact of the environment in Misterek, et a1(21) propose that ‘productivity may be
modern office environments. For example, early defined as simply the relationship between what goes into
industrial fieldwork provided easily quantifiable the system and what is produced, or more simply the ratio
measures of productivity but the research was mostly of output to input’. Pritchard et a1(22c) onclude that ‘one
conducted, in the early part of the century, in factories in area where most authors do agree is that productivity is
which repetitive physical labour was carried out. The not synonymous with aggregated individual performance.
relevance to modern-day office work is therefore Individual performance is typically output such as
questionable. Laboratory studies of performance tasks number of pieces finished or output relative to an
also allow quantifiable productivity data to be obtained evaluation system such as ratings performance. Pro-
but have many shortcomings associated with them, ductivity includes the idea of output relative to inputs, or
mostly because the subjects cannot interact with the outputs relative to objectives or goals.’
Scope of review and types of supporting evidence 1
Environmental factors affecting office
worker performance: A review of evidence
1 Scope of review and types environment, are placed in unnatural environments and
are asked to carry out simple performance tasks (see
of supporting evidence
Section 5.1). Office surveys tend to be conducted by
psychologists interested in the effect of environmental
Of the UK’s workforce over SO%, equivalent to over 10 and/or organisational factors on productivity. Most of
million people now work in offices, compared with 20% in the environmental studies are cross-sectional surveys,
1911(’) and forecasts of 80% by the year 2000(2). As a rather than full experiments (e.g. involving an
consequence there has been a dramatic increase in office intervention, and control groups), and they mostly
space, for example 40% per person in London over the last depend on self-ratings of performance rather than
20 years. Furthermore, the life cycle of an office building objective measures of productivity. The organisational
is around 20 to 50 years, and typically a building lasts 40 studies are better but depend on a barrage of long-term
years. Buildings are therefore both a substantial investment measurements which include a subjective element. Case
and potentially a long-term commitment. From the studies provide a valuable insight into the benefits of
occupiers’ point of view, building costs are the second- office improvements but the effects of environmental and
largest cost after staff and are typically 8 to 30% of the organisational change tend to be confounded. Design
total revenue, accounting for the initial cost over life- guidance tends to be based on the practical experience of
cycle, or rent, and running costs (see Section 3.3). To design consultants rather than being supported by
maximise on return and encourage sustainable scientific evidence.
development (e.g. ensure the building is always occupied)
It is acknowledged that the effect of the environment
it is therefore imperative that the office building is
upon productivity has been examined in many other
designed and functions in a way appropriate to support .
literature reviews For example, A~liciems(~L)o, rsch and
the activities that take place within it. Occupiers expect
Abdod4), M~Intyre‘~P)a,r sond6), Ramsay and Kwon(’) and
the office to provide a satisfactory and productive working
Wing“) reviewed the effects of temperature, Abdou and
environment to maximise the return on their costs
Lorsch(’) discussed the role of air quality, and Davies
(building and staff). What, then, constitutes a productive
and Jones(”) and Kryter‘”) adequately covered the effects
workplace and what are the key elements to designing it?
of noise. In addition, Croome and Baizhan(’2), Jokl(13),
Indeed, does the design actually affect productivity?
Lorsch and Abdou(I4), Oseland(”), Oseland and
Williams(16),S ~ndstrom(’~W),h itley‘”) and Wyon(”) have
As a first step, this report aims to present a state-of-the-art
all provided general reviews covering most aspects of the
review of literature which provides evidence of how the
physical environment. This report is justified because,
physical environment affects productivity in the work-
firstly, it provides an update to these reviews and,
place, in particular white-collar (knowledge-based)
secondly, most of these reviews have concentrated on the
workers in offices. This review presents the results of
physical rather than the non-physical environmental
scientific research and is not intended to provide practical
factors that affect productivity.
guidance on how to create a productive workplace (this
will be provided by a subsequent publication of the Office
Productivity Initiative). The review includes only
2 Definition of productivity
documented, rather than anecdotal, evidence or that
obtained through on-going discussion with end-users and
practitioners. Productivity is generally expressed in terms of efficiency,
e.g. as the ratio of output to input. Lorsch and Abd~u(’~)
There are many sources of written information, which can express productivity as ‘a measure of what can be achieved
be grouped in terms of: (a) early industrial fieldwork; (b) by human beings with the least effort’ and they also state
laboratory studies of performance tasks; (c) field surveys that ‘productivity is the ratio of output to input’. Guzzo
and experiments conducted in offices; (d) case studies; (e) and Bandy(") agree that productivity is the ratio of output
design guidance; and (f) previous reviews. All these to input and add that the productivity of a company is
sources of information have merits but they also have determined by the technology to transform the input to
problems associated with them when one is interpreting output and the performance of the workers. Similarly,
their relevance to the impact of the environment in Misterek, et a1(21) propose that ‘productivity may be
modern office environments. For example, early defined as simply the relationship between what goes into
industrial fieldwork provided easily quantifiable the system and what is produced, or more simply the ratio
measures of productivity but the research was mostly of output to input’. Pritchard et a1(22c) onclude that ‘one
conducted, in the early part of the century, in factories in area where most authors do agree is that productivity is
which repetitive physical labour was carried out. The not synonymous with aggregated individual performance.
relevance to modern-day office work is therefore Individual performance is typically output such as
questionable. Laboratory studies of performance tasks number of pieces finished or output relative to an
also allow quantifiable productivity data to be obtained evaluation system such as ratings performance. Pro-
but have many shortcomings associated with them, ductivity includes the idea of output relative to inputs, or
mostly because the subjects cannot interact with the outputs relative to objectives or goals.’
2 Definition of prod uctivit v
The next question, then, is what are the input and output (quality, quantity, meeting targets); efficiency (ratio of
variables? Dorgan Associates(23p) rovide examples in their expected resources to those used); quality (subjectively or
definition of productivity, which is ‘the increase in the objectively assessed quality attributes); profitability (ratio
amount of time when work is being done with a decrease of total revenues to total costs); productivity (ratio of
in absenteeism, a decrease in employees leaving work quantity of output to input in terms of value/cost); quality
early, a reduction of extra long lunches, and the increase of work life (psycho-social aspects and social response to
in quantity and quality while at work from improved air company); and innovation (applied creativity).
quality’. Lorsch and Abdou consider that the output
There is therefore the potential for confusing productivity
achievement may be expressed in terms of quantity and/or
terms and Pritchard et al(”) warn us that psychologists
quality and the input effort may be the amount of time
often equate performance with productivity. Of course, if
and money required rather than physical effort. Misterek
an increase in performance is produced without any extra
et al(’l) distinguish between partial productivity, which
input resources then the increased performance is
involves measuring a portion of the inputs (e.g. labour
equivalent to productivity. However, most of the increases
costs), and total productivity, which compares all inputs
in performance shown in the literatiire are an outcome of
and outputs (e.g. materials, labour, capital) which tciid to
some additional cost to the company, as either time and/or
be quantified using a common denominator such as cost.
money (e.g. refurbishment, energy, training, manage-
Juri~on‘~sa~ys) that output can be defined in terms of
ment), which tends not to be included in the productivity
‘gross’ or ‘value added’, where gross output is the total
equation. To prevent further confusion, in this review the
production and the value added output includes the
term ‘environment’ refers to the general workplace
company’s own efforts only and excludes intermediate
environment. This includes both physical conditions (e.g.
goods and services purchased outside. He continues that
temperature, noise, space and layout) and other workplace
total productivity should include labour, capital, raw
factors (e.g. company policy, organisational structure, type
material and other relevant costs. Wir~eman(~a~ls)o
of work, reward system).
acknowledges that productivity measures should include
employee work performance and associated organisational
costs including turnover, absenteeism, tardiness, over-
3 Measuring productivity
time, vandalism, grievances and mental and physical
health. She notes that organisational costs (productivity)
are easier to measure than individual worker performance. 3.1 Performance measures
Juri~on(p~o~in)ts out that as ‘productivity measures the
The Sumerians kept records of each individual worker’s
relationship between products and services produced and
performance more than 7000 years ago. Presumably, the
the resources to create them’, then ‘productivity is
work was simple, repetitive and easily measured. In
increased by producing more with the same amount of
today’s modern office measuring performance and
resources or producing the same amount with fewer
productivity is not so straightforward. For example,
resources.’ Misterek and colleagues provide examples of
following their survey of 70 companies, Brill et a1(28r)e port
increased productivity. They term greater output and
that ‘no organisation in our survey has available any in-
greater input (with the increase in output greatest) as
place work measuring system for measuring job
managed growth; greater output and no change in input
performance’. Table 1 shows NEMA’s list of indicators of
as working smarter; greater output and less input as the
increased productivity(26)T. he first three items on the list
ideal; no change in output but less input as greater
are more conducive to measurement than the other
efficiency; and less output and less input (but a smaller
indicators, e.g. creativity is difficult to define, let alone
decrease in output) as managed decline.
quantify. Traditionally, psychologists have studied the
S~ndstrom“~s)u ggests that the environment can be impact of the environment upon performance under
studied at three different levels of analysis: individual controlled laboratory conditions using a series of simple
workers; teams or units; or the corporation. Similarly psychometric tasks which were mainly based on
performance can be measured at these three levels, for examining speed, accuracy and fatigue, i.e. NEMA’s first
example output per hour, project deadlines, and company three indicators. These simple psychometric tasks reflect
profit respectively. The 11 indicators of increased the skills and actions required for the more repetitive type
productivity listed by the National Electrical Manu- of work, e.g. vigilance tasks directly reflect air traffic
facturers Association (NEMA)(26)a ll relate to individual control skills. However, with the change in modern office
performance (Table 1). Sink(27)i dentified seven distinct work from simple, menial and repetitive tasks to more
measures of ‘organisational performance’: effectiveness complex, creative and demanding ones, items 4 to 11 in
NEMA’s list are perhaps better indicators of increased
performance.
Table 1 Indicators of increased productivity(26)
In addition to NEMA’s indicators being quite difficult to
1 Performing tasks more accurately
quantify, it is not clear how to combine them to represent
2 Performing faster without loss of accuracy
the multi-tasking required in office work or how to
3 Capability to perform longer without tiring
account for other important skills such as decision
4 Learning more effectively
making. Aronoff and Kaplan(’) propose that the greater
5 Being more creative
the knowledge component of the work, the more difficult
6 Sustaining stress more effectively it is to develop reliable measures of productivity and,
7 Working together more harmoniously furthermore, they note that if the range of input and
8 Being more able to cope with unforeseen circumstances output factors is too narrowly defined then the resulting
9 Feeling healthier and so spending more time at work information tends to be unreliable and misleading.
10 Accepting more responsibility
Owing to lack of confidence in the relevance of
11 Responding more positively to requests
laboratory-based psychometric testing, ASHRAE(29h) eld a
2 Definition of prod uctivit v
The next question, then, is what are the input and output (quality, quantity, meeting targets); efficiency (ratio of
variables? Dorgan Associates(23p) rovide examples in their expected resources to those used); quality (subjectively or
definition of productivity, which is ‘the increase in the objectively assessed quality attributes); profitability (ratio
amount of time when work is being done with a decrease of total revenues to total costs); productivity (ratio of
in absenteeism, a decrease in employees leaving work quantity of output to input in terms of value/cost); quality
early, a reduction of extra long lunches, and the increase of work life (psycho-social aspects and social response to
in quantity and quality while at work from improved air company); and innovation (applied creativity).
quality’. Lorsch and Abdou consider that the output
There is therefore the potential for confusing productivity
achievement may be expressed in terms of quantity and/or
terms and Pritchard et al(”) warn us that psychologists
quality and the input effort may be the amount of time
often equate performance with productivity. Of course, if
and money required rather than physical effort. Misterek
an increase in performance is produced without any extra
et al(’l) distinguish between partial productivity, which
input resources then the increased performance is
involves measuring a portion of the inputs (e.g. labour
equivalent to productivity. However, most of the increases
costs), and total productivity, which compares all inputs
in performance shown in the literatiire are an outcome of
and outputs (e.g. materials, labour, capital) which tciid to
some additional cost to the company, as either time and/or
be quantified using a common denominator such as cost.
money (e.g. refurbishment, energy, training, manage-
Juri~on‘~sa~ys) that output can be defined in terms of
ment), which tends not to be included in the productivity
‘gross’ or ‘value added’, where gross output is the total
equation. To prevent further confusion, in this review the
production and the value added output includes the
term ‘environment’ refers to the general workplace
company’s own efforts only and excludes intermediate
environment. This includes both physical conditions (e.g.
goods and services purchased outside. He continues that
temperature, noise, space and layout) and other workplace
total productivity should include labour, capital, raw
factors (e.g. company policy, organisational structure, type
material and other relevant costs. Wir~eman(~a~ls)o
of work, reward system).
acknowledges that productivity measures should include
employee work performance and associated organisational
costs including turnover, absenteeism, tardiness, over-
3 Measuring productivity
time, vandalism, grievances and mental and physical
health. She notes that organisational costs (productivity)
are easier to measure than individual worker performance. 3.1 Performance measures
Juri~on(p~o~in)ts out that as ‘productivity measures the
The Sumerians kept records of each individual worker’s
relationship between products and services produced and
performance more than 7000 years ago. Presumably, the
the resources to create them’, then ‘productivity is
work was simple, repetitive and easily measured. In
increased by producing more with the same amount of
today’s modern office measuring performance and
resources or producing the same amount with fewer
productivity is not so straightforward. For example,
resources.’ Misterek and colleagues provide examples of
following their survey of 70 companies, Brill et a1(28r)e port
increased productivity. They term greater output and
that ‘no organisation in our survey has available any in-
greater input (with the increase in output greatest) as
place work measuring system for measuring job
managed growth; greater output and no change in input
performance’. Table 1 shows NEMA’s list of indicators of
as working smarter; greater output and less input as the
increased productivity(26)T. he first three items on the list
ideal; no change in output but less input as greater
are more conducive to measurement than the other
efficiency; and less output and less input (but a smaller
indicators, e.g. creativity is difficult to define, let alone
decrease in output) as managed decline.
quantify. Traditionally, psychologists have studied the
S~ndstrom“~s)u ggests that the environment can be impact of the environment upon performance under
studied at three different levels of analysis: individual controlled laboratory conditions using a series of simple
workers; teams or units; or the corporation. Similarly psychometric tasks which were mainly based on
performance can be measured at these three levels, for examining speed, accuracy and fatigue, i.e. NEMA’s first
example output per hour, project deadlines, and company three indicators. These simple psychometric tasks reflect
profit respectively. The 11 indicators of increased the skills and actions required for the more repetitive type
productivity listed by the National Electrical Manu- of work, e.g. vigilance tasks directly reflect air traffic
facturers Association (NEMA)(26)a ll relate to individual control skills. However, with the change in modern office
performance (Table 1). Sink(27)i dentified seven distinct work from simple, menial and repetitive tasks to more
measures of ‘organisational performance’: effectiveness complex, creative and demanding ones, items 4 to 11 in
NEMA’s list are perhaps better indicators of increased
performance.
Table 1 Indicators of increased productivity(26)
In addition to NEMA’s indicators being quite difficult to
1 Performing tasks more accurately
quantify, it is not clear how to combine them to represent
2 Performing faster without loss of accuracy
the multi-tasking required in office work or how to
3 Capability to perform longer without tiring
account for other important skills such as decision
4 Learning more effectively
making. Aronoff and Kaplan(’) propose that the greater
5 Being more creative
the knowledge component of the work, the more difficult
6 Sustaining stress more effectively it is to develop reliable measures of productivity and,
7 Working together more harmoniously furthermore, they note that if the range of input and
8 Being more able to cope with unforeseen circumstances output factors is too narrowly defined then the resulting
9 Feeling healthier and so spending more time at work information tends to be unreliable and misleading.
10 Accepting more responsibility
Owing to lack of confidence in the relevance of
11 Responding more positively to requests
laboratory-based psychometric testing, ASHRAE(29h) eld a
Measuring productivity 3
Table 2 Proposed measures of producti~ity’~~’ productivity by stimulating the production of new ideas
(innovation).
I Absence from work or from work-station; unavailability on
telephone Guzzo and Bondy(20)s uggest that ‘there is no common,
2 Health costs including sick leave, accidents, injuries widely shared definition of productivity, consequently,
3 Observed downtime, interruptions there is no one best way of measuring a rise or fall in
4 Controlled independent judgements of work quality, mood etc. productivity’. In their review of 104 studies, and in Katzell
et al’s review(36)o f 103 studies examining organisational
5 Self-assessments of productivity
issues, many different productivity measurements were
6 Component skills, task measures such as speed, slips, accuracy
made: sick pay, safety and accident records, disciplinary
7 Output from pre-existing work-groups
actions, backlogs, number of transactions, units serviced,
8 Total unit cost per product or service
monthly applications processed, key stroke rates, on-time
9 Output change in response to graded reward completion of work, pass rate of exams, supervisor ratings,
10 Voluntary overtime or extra work performance ratings, client complaints, peer ratings,
11 Cycle time from initiation to completion of discrete process personal appearance, idle time, hours per day performing
12 Multiple measures at all organisational levels required task, observed required behaviour, work load,
13 Individual measures of performance, health, well-being at work cost savings, profit, overtime costs, operating expenses,
14 Time course of measures and rates of change sales figures, volume of business, interest on accounts and
turnover. Guzzo and colleagues categorised these
measures as those concerned with: (a) output including
workshop to discuss how productivity could be assessed in
quantityhate, quality/accuracy, costs/efficiency; (b) with-
the workplace. A list of 14 potential measures of
drawal including turnover, absenteeism and tardiness;
productivity was produced (see Table 2). Unfortunately,
and (c) disruption including accidents/safety, strikes,
many of the methods have practical problems associated
slow-downs and grievances. These measures are mostly
with them. For example, it is easier to observe the time
performance indicators and tend not to be converted into
performing a task than to measure the efficiency at a
financial savings to the company.
particular task, so records of absenteeism and time at work
may provide quantitative and unobtrusive means of J~rison(a~r~gu)e s that defining meaningful outputs is
assessing productivity. Nevertheless, observing down- difficult for knowledge workers but nevertheless the
time may be misleading as people could be away from outcome of the service offered could be measured. For
work or their work-station simply because they are example, the quantity of output or desired results, such as
working elsewhere and behaviour such as staring out of the number of products produced, number of reports
the window for several minutes cannot always be prepared, number of contracts negotiated or number of
considered wasted time as it may provide a sufficient customers visited, could be computed. These measures
break to allow a problem to be solved. Wyon(’’) notes that can then be compared with the input or resources, e.g.
‘most of them (ASHRAE’s measures) have never been labour hours, capital equipment, supplies, materials. He
used as the dependent measure in controlled experiments finishes by suggesting accounting for quality by defining
on indoor climate, whether in the field or in the output in terms of products meeting quality standards.
laboratory’. Furthermore, the definition of productivity
established in the previous section shows that many of the Similarly, Ghobadian and A~hworth(f~o~un) d that the
measures on the list are actually performance indicators output of service sector organisations is intangible,
rather than measures of productivity. heterogeneous, ill-defined and subject to a wide band of
quality variations. They studied three separate
ASHRAE does not specifically mention using objective, organisations and for each one measured the input
quantitative and unobtrusive measures of work output. (resources), output (service produced) and the impact
These measures provide the most reliable source of data (what is achieved) by producing a set of performance
but only some types of work are suitable for providing indicators for each. They comment that the precise
such data. Examples are the number of insurance claims measurement technique was different in each organisation
processed or enquiry queuing times, the number of but nevertheless it was possible to develop a set of
contacts in telesales, key presses in word-processing pools, performance measures. Ghobadian and Ashworth also
or the number of components produced in manufacturing distinguish between efficiency (the ratio of input to
companies. Researchers (eg Vernon(30))h ave for some output) and effectiveness (the impact) and note that
time used quantitative measures when examining companies may be interested in only one or both of these
factories and more recently several studies have been measures of productivity. SalemmeJ3*)t oo, emphasises the
conducted in the offices of American insurance companies need to shift from measuring output to impact of output,
who had in-house objective measures of productivity, e.g. e.g. customer satisfaction. He also encourages using a
the number of insurance claims processed per day (see family of performance indicators e.g. errors, rework,
References 31-34). usefulness to customer.
Reducing staff turnover by incentives, such as a good Pritchard et a1(22)d escribe the development of their
working environment or career prospects, may be productivity measurement and enhancement system
considered an improvement in productivity if the costs of (ProMES). The system involves establishing the level of
recruiting and training new staff are higher than those of performance expected to meet the job duties (outputs) and
the incentives required to keep existing staff. For then weighting the job duties for importance; these
example, the MCG 1997 survey of private and public weightings are termed contingencies. So they do not just
sector organ is at ion^'^^) reports that the average measure the product/output, but develop objective
recruitment cost is &775 per person but suggests that indicators of how well each output is accomplished. The
training costs in blue chip companies can be as high as stages of the system are to (a) identify salient products, (b)
one year’s salary per recruit. In contrast, it has been develop performance indicators of these products, (c)
suggested that increased staff turnover may improve establish contingencies (weightings) and (d) put the
4 Measuring productivity
system together as a feedback system. They have used between job satisfaction and objectively measured per-
their system with some success in offices with well- formance. However, Lawler and present
defined staff output. several studies conducted after 1955 which show a low but
consistent relationship between job satisfaction and
Miller(39)p rovides an example of the measurement of performance, particularly absenteeism and staff turnover.
accountant productivity. He uses the errors found in They suggest that satisfaction with the job means that the
reports, success in meeting deadlines, cycle time to workers are more motivated to go to work, thus reducing
complete reports, reports per accountant, mistakes absenteeism and turnover. This conclusion is the general
identified by auditors and total audit cost to derive his consensus of most researchers in this field, (e.g. Reference
parameters. He points out the value of displaying the 20). Furthermore, L~cke(r~ev~ie)w ed 4000 studies of job
performance indicators to provide feedback, which in satisfaction conducted over 50 years. The studies showed
itself will increase performance. He also suggests that dissatisfied employees are more likely to be late for
establishing a family of measures and weighting them by work or absent, or quit their jobs, resulting in extra costs
usefulness. in sick leave and training. Locke concluded that the twin
goals of productivity and satisfaction go together well but
not all satisfied workers are necessarily productive.
3.2 Self-assessed productivity BOSTI(46s) urveyed 4000 office workers and found that job
satisfaction was correlated with perceived performance.
Self-assessment of productivity has been used in the field Lawler and Porter(43)s uggest that good performance may
for some time and has provided useful results. Raw et al(40) lead to higher job satisfaction because 'the relationship
consider perceived productivity to be as important to found between satisfaction and performance comes about
assess as actual productivity. Leaman and B~rdass'~~)th rough the action of a third variable-rewards. Briefly
argue that the advantages of measuring perceived stated, good performance may lead to rewards, which in
productivity outweigh the disadvantages. For example, turn lead to satisfaction; this formulation would then say
self-assessed productivity allows a single question, is that satisfaction, rather than causing good performance, as
common to all respondents, can be used for different we previously assumed, is caused by it'. The reward may
building types and organisations, is convenient and be intrinsic, such as self-respect, pride of craft and feeling
inexpensive, and provides common benchmarks. of accomplishment; or extrinsic, such as pay, promotion
and status.
The main disadvantage is that the worker's perceived
levels of productivity may differ from actual productivity. In a study of 6000 workers in 70 organisations, Brill et
However, Roethlisberger and Dickson's well-known a1(28)u sed four scales: environmental satisfaction, job
of the Hawthorn Works of the General Electric satisfaction, job performance and supervisory job
Company actually provides some indication that self- performance. They found that environmental satisfaction
assessment does reflect actual output. They found a strong correlated fairly well with job satisfaction (r = 0.26 to
relationship (r = 0.99) between nine wire-men's estimated 0.35) but poorly with job performance (r = 0.10 to 0.15).
and actual outputs (Figure 1). On average the wire-men As part of their study, Brill et a1 used the results of
tended to overestimate their output, but by only previous studies to determine the relationship between
approximately 4%; however, those performing most job satisfaction, job performance and bottom-line
poorly overestimated their output by 8 to 11%. A productivity in terms of salary costs. Schmidt et al(47)
definitive study, with a larger sample size, is required to found that one standard deviation change in the job
instil confidence in self-assessment methods, but there is performance scale was equivalent to a 40 to 72% rise in
some indication that they are useful for examining relative salary but Brill et a1 thought this value was high so
changes in performance. assumed a conservative 20% change. Mirvis and La~ler'~~)
found a relationship between job satisfaction and
absenteeism and turnover which Brill et a1 converted to a
900
dollar value using 'economic analysis'. As an example
Brill et a1 estimated that the improvement in job per-
formance and job satisfaction related to the environmental
improvement in the offices of 400 respondents was
equivalent to a 15.2% salary offset. Unfortunately, the
calculation methods are neither well explained nor
L convincing.
3
2
600
c Kroner et a1(32,49s)t udied occupants of an insurance
m
'W company moving into a new building. The company had
500 Hours: its own in-house method of objectively measuring per-
Reported formance, e.g. the number of insurance claims processed,
400 IActual and the researchers administered questionnaires. They
2 3 6 5 4 1 8 7 9 found a statistically significant association between the
change in productivity and the change in overall satis-
Wireman
faction with the workspace. Satisfaction was 33% higher
Figure 1 Reported and actual output of wiremen.'"' in the group of workers who increased productivity. No
comparison of perceived versus objective productivity was
Proxies for productivity often used are scales of job made.
performance and even job satisfaction. These scales
comprise a selection of standardised questions which Intermediary variables such as the number of sick
produce a job satisfaction or performance score. Research building syndrome (SBS) symptoms have also been found
conducted before 1955 showed no clear relationship to be indicators of productivity. For example, Raw et al(40)
Measurinq productivity 5
10 mately &1500/m2p er annum, i.e. equivalent to 87% of the
revenue costs.
Most of the published calculations comparing building
with staff costs are found in the Northern American
literature. For example, R~senfeld(’~e)x amined several
HVAC installation projects. He estimated salaries cost
$300/ft2/year whereas the average energy costs of an
HVAC system is $1.50/ft2, equivalent to 0.5% of the cost of
productivity or midday per person. Thus, staff costs
2l/4
are 200 times the HVAC energy costs. Several other
researchers have conducted an analysis similar to that of
Rosenfeld (Table 3). The various assumptions about staff
salaries and occupant density lead to different estimates of
staff costs whereas there is less variation in the estimated
energy costs. It is evident that staff costs are 100 to 200
-20
times the cost of energy and the total energy costs can be
0 1 2 3 4 5 6 7 8 9 1 0
offset by a 0.5 to 1.0% reduction in staff costs.
Number of SBS symptoms
Table 3 also shows that staff costs are 20 to 44 times the
Figure 2 Change in productivity is related to SBS.‘40’
HVAC running costs, indicating that a 2.3 to 5% increase
in productivity is required to offset these extra HVAC
found an almost perfect correlation (r = 0.98) between costs. R~senfeld(’~al)s o estimated that the initial cost of
self-ratings of productivity and SBS symptoms based on HVAC in an office building is $10/ft2/year; thus staff costs
mean scores (Figure 2). The plot indicates that a person are equivalent to 30 times the HVAC installation costs,
with more than two SBS symptoms is likely to experience and so the HVAC system installation cost is justified
a negative effect on perceived productivity. However, this when it increases productivity by 3.5%, i.e. 15 midday per
significant relationship may be due to high inter-
person. Aronoff and Kaplan”) conducted a similar
correlation between the two subjective ratings rather than analysis and estimated that the initial costs and running
a proven causal relationship between SBS and objectively costs of a typical HVAC system were equivalent in salaries
measured productivity. to 11/3d ays per employee. In summary, the extra annual
energy costs for HVAC are offset by an increase of
approximately 1% in productivity, but a 6 to 9% pro-
3.3 Staff costs and profit ductivity gain is required to offset the full running and
installation costs.
Staff time and equivalent salary costs are convenient units
for expressing productivity. For example, a reduction in
wasted staff time (e.g. through illness) can be converted 4 Factors affecting
into cash savings. The ratio of staff to building costs is
productivity
often used as a justification for investment in building
services and management, such as air-conditioning, as a
small investment may result in large savings in staff costs 4.1 Psychological processes and
if the workers are more productive. Bernard Williams
Associates(5o)c alculated that a typical UK organisation motivation
spends 70 to 80% of its revenue on staff and related costs.
In comparison 5% of revenue is spent on premises, of Previous reviews of the impact of the environment upon
which 1% is operating costs (management, alterations, productivity generally conclude that productivity research
cleaning, maintenance, energy etc.); the remainder goes is somewhat confusing because the results are sometimes
towards assets and equipment (e.g. IT and business conflicting and the relationships observed between
support). They also note that ‘although managers and productivity and environmental factors are not simple
accountants get very excited about operating costs ones. Wyon(19) argues that ‘the magnitude of the
including maintenance, energy etc., these very rarely environmental effect upon the dependent measure of
amount to more than 1% of the total revenue expenditure’. productivity has often been surprisingly large, as high as
Hodgett‘’l) estimated that the annualised building cost, 50%, more usually 5-15%’ and Brill et a1(28a) lso estimated
including capital investment, is approximately &200/m2i n that improved environmental conditions could result in a
the UK, of which energy and plant costs are around 15% increase in productivity. However, Lorch and Abdou
&10/m2p er annum. In contrast, staff costs are approxi- concluded that ‘determining a quantitative relationship
Table 3 Comparison of energy and staff costs for North American offices.
Abdou &
costs Ro~enfeld‘~~’ Lorsch‘” EPA‘53’ Woods‘54) BOMA(55)
Staff costs ($/ft2/year) 300 218 200 237 130
HVAC running costs ($/ft2/year) - 2-10 6 12 2.9
Energy costs ($/ft2/year) 1.5 1-2 2 2 1.5
Ratio of staff to energy costs 200 114218 100 118 87
Productivity offset of energy (%) 0.5 0.5-0.9 1. o 0.9 1.2
Productivity offset (midday per person) 2’14 2-3’14 4’13 3 x 10’ 5