organizational productivity

Buildings factor in organizational productivity

Research finds outcomes similar to employee-focused corporate strategies
Tuesday, July 11, 2017

Two truisms of modern office environments bear up differently to critical scrutiny. A recent comprehensive review and synthesis of existing research from around the world bolsters the supposition that building technologies and enhanced operational practices can have a positive impact on occupants’ performance and well-being, but raises some questions about the purported benefits of open office plans.

These findings are in a new report from the Continental Automated Buildings Association (CABA) and the National Research Council (NRC) Canada, which sets out an analytical framework for assessing the influence of building technologies and operations on organizational productivity metrics compared to other employee-focused corporate strategies. Building automation systems (BAS) and whole-building green strategies — defined as better buildings approaches — are measured against office design/format, workplace health programs, bonuses and flexible work options, although not necessarily in search of a hierarchical ranking.

“By comparing better buildings approaches to other corporate programs, which may have known costs and expected outcomes in a particular organization, the decision-maker is empowered to choose (or not) a better building approach relative to another approach,” the introduction to Improving Organizational Productivity with Building Automation Systems states.

The report, which was released in late May, is a first step in a planned three-part project to quantify links between buildings’ technical performance and organizational productivity in order to identify and demonstrate how building systems and operational practices can enhance the workplace.

Enabling comparison

NRC analysts chose seven key performance indicators (KPIs) that collectively are important gauges of organizational productivity: absenteeism; employee turnover intent; self-assessed performance; job satisfaction; health/physical symptoms; overall physical well-being; and complaints to the facilities manager. They then drew applicable data from 500 peer-reviewed academic studies that measure some aspect of how organizations function within their workspaces.

The KPIs were assigned units of measurement that could be expressed on a standardized scale — for example, days-per-worker-per-year to reflect impacts on absenteeism — and values for each KPI were plotted in a matrix that allows observers to see and compare how the five productivity strategies flow through to outcomes. This illustrates the degree to which each of the strategies reduces absenteeism, negative health/physical symptoms and workers’ inclination to seek other employment, while improving job satisfaction, overall physical well-being and building occupants’ own assessments of their job performance. (Analysts were unable to find adequate data to derive a value for the seventh proposed metric: complaints to the facilities manager.)

The new framework provides measurable values for qualities that the report acknowledges have been “notoriously difficult to quantify convincingly” in the past, offering prospective investors a more complete package of information for their payback calculations. The framework also gives budgeters a means to evaluate outcomes against input costs, and assess expenditures on all five strategies in relation to their broader range of returns.

“Our results are consistent in showing that, in general, better buildings approaches offer benefits across multiple metrics that are comparable to the benefits from other corporate programs,” the report states. “Whereas most of the other corporate strategies we studied have ongoing costs to the organization, most of the better buildings improvements would also lower building energy use and some (e.g. lighting controls that reduce lamp on-time; BAS systems that include default detection and diagnostics) will reduce maintenance costs as well. Organizations that seek to improve their overall productivity would do well to consider these results in making strategic choices.”

Questioning assumptions

The comparison to other corporate strategies uncovered occupants’ general antipathy to the open office format. Private offices surpassed or ranked alongside better buildings approaches and workplace health programs in every productivity metric, even while they diminish in number.

“The justification for this transition (away from private offices) has typically been the expectation that it will bring increased flexibility, transparency and enhanced communication between team members, although the underlying economic driver has been real estate cost savings,” the report states. “It is a strategy that is very familiar to this report’s audience, and thus serves as an excellent touchstone against which to compare other strategies.”

The exhaustive look at existing research also highlights where more work needs to be done. Notably, analysts had to abandon one of their envisioned productivity metrics — complaints to the facilities manager — because they were unable to find data that they contend should be abundant.

“This is surprising because the data are routinely collected and archived in electronic format in most large organizations, and it seems like such an obvious outcome for building researchers to pursue, with their historic focus on occupant comfort,” the report’s authors observe. “This is also an area in which a business case could be made in a relatively straightforward manner. Even excluding the potentially large benefits that lowering occupant discomfort might have for a range of organizational productivity metrics, responding to a complaint has direct tangible costs too, with both fixed and variable components.”

In future, they foresee that the Internet of Things will provide tools for measuring existing and emerging metrics. At the same time, researchers are grappling with how to measure concepts such as employee engagement, creativity, the battle for talent, internal communication effectiveness and presenteeism, and how to do this comparatively across multiple workplaces or with findings from multiple studies. In all this, they stress the importance of a common scale for key metrics and longitudinal data for assessing the connection between strategies and outcomes, and the persistence of effects.

CABA is currently recruiting interested organizations to participate in the next phase of the project, slated to begin later this year.

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