Stuart Gentle Publisher at Onrec

New Study Shows Who Sits Where at Work Can Impact Employee Performance and Company Profits

Cornerstone OnDemand and researchers at Harvard Business School find placing the right workers in close proximity to each other can add up to an estimated $1 million per annum to a company’s profit.

To increase worker performance, employers invest in a number of tactics – from education and training and performance management, to rewards and incentives. But new data shows that simply rearranging employee seating can be one of the fastest and lowest-cost ways of increasing the performance an organisation’s workforce. Research performed as a collaboration between Cornerstone OnDemand (NASDAQ:CSOD) and researchers at Harvard Business School uncovers how the distance between two employees’ desks affects various performance measures and how placing the right type of workers in close proximity to each other has been shown to generate up to a 15 percent increase in organisational performance.

For organisations looking to increase returns on the human capital of their workforce, simply rearranging employee seating may be one of the most cost-effective resources at their disposal. For an organisation of 2,000 workers, strategic seating planning could add up to an estimated $1 million per annum to profit.

Increasing Productivity in the Workplace by Optimising Seating Plans

The first study of its kind, Cornerstone’s “Planning Strategic Seating to Maximise Employee Performance” report analysed data from more than 2,000 employees over a two-year period provided by a large technology company with several locations in the U.S. and Europe. The analysis concluded that who an employee sits next to can have a significant impact on his/her performance, for both positive and negative situations.

Research uncovered three types of workers: Productive, Generalists and Quality. Productive workers are very productive but lack in quality. In contrast, Quality workers produce superior quality but lack in productivity. All the while, Generalists are average on both dimensions.

The study found that performance Spillover effects are strongest for performance measures where the employee is weakest. Seating Productive and Quality workers together and seating Generalists separately in their own group shows a 13 percent gain in productivity and a 17 percent gain in effectiveness. In short, symbiotic relationships are created from pairing those with opposite strengths. It turns out that those strong in one dimension are not very affected by Spillover in that dimension; however, they are very sensitive to Spillover on their weak dimension.

Rooting Out Toxic Behavior

The research also reveals that Spillover effects can extend to negative performance through misconduct and unethical behavior Spillovers. In measuring the extent to which a toxic worker (i.e., a worker that harms an organisation’s people and/or property) influences others, the study finds that the negative performance of these workers spills over to fellow workers in a process similar to positive Spillover. This suggests that employee engagement surveys that capture how employees feel about their work environment and their managers can be an important first line of defense in rooting out toxicity by providing an early warning to intervene in such a team.

Comments on the News

“Until now, not much has been explored on how the physical location of an employee and proximity to others can impact their productivity and performance,” said Dylan Minor, visiting assistant professor for Harvard Business School. “These results suggest that companies can develop a framework to maximise organisational performance simply through the physical placement of workers. Physical space is something organisations can manage relatively inexpensively, and it should be viewed as an important resource in increasing the returns to human capital.”

“With modern organisations shifting to open floor plans and flexible workspaces, this study shows that there is actually a science behind employee seating charts,” said Jason Corsello, senior vice president of strategy and corporate development for Cornerstone OnDemand. “This is a great example of the business value of people analytics and how an organisation’s data can help them to operate smarter and more efficient, even when it comes to deciding who sits where at work.”

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