Anything you need to quantify can be measured in some way that is superior to not being measured at all.

To be fair, venturing into the area of measuring workplace performance is as problematic as entering a swamp. It is filled with vexing and menacing pitfalls and difficulties. Not surprisingly many other consultants share her pessimistic outlook.

After all, even The Missionary of Quality, W. Edward Deming was no fan of performance measurements, which he described as "the most powerful inhibitor to quality and productivity in the Western World." And the literature abounds with examples of bad performance measures, such as: measuring production volume of shoes in Russia, resulting in 7 million left footed boots, or the infamous U.S.D.A. Tomato Red color standards, which has given the U.S. the world’s most tasteless tomatoes, or, more tragically, measuring the progress of the Vietnam War by "body counts," which contributed to a lost war.

Deming and these examples notwithstanding, I will describe how workplace performance can be measured to evaluate the performance of new or re-planned workplaces, although I will also describe the problems I have alluded to.

The question of how to measure the performance of the workplace is an important one.

The workplace or the physical and organizational systems, which support workers, is an expensive proposition. The asset value of real estate alone is often a quarter or more of the book value of a corporation, and the on-going costs of operating and maintaining it usually consumes a significant portion of the corporate cash flow. In today’s competitive business where all costs not directly involved in creating customer value are carefully scrutinized, managers of the workplace are pressed to show how it is contributing value to the corporation. If workplace planners and managers are unable to make their case, their share of dollars will be lost to other groups within the company who can.

Perspectives of Workplace Performance

Quite a popular subject, "Workplace Performance" is described in the literature and in symposium presentations and papers in terms of many aspects, varying from financial measurement, to group performance, to the performance of the physical workplace, which lead to confusion as to what it actually means. My viewpoint is that it should include all these, but that it is best understood in terms of the following perspectives:

• Strategic Performance: How is the workplace supporting the mission, goals and objectives of the business?
• Worker performance: How well are the workers who use the workplace performing their functions?
• Workplace effectiveness: How effectively does the workplace support the performance of the workers?

Strategic Performance measurements, which are subsets of the performance measurements for the company as a whole, address how the workplace supports corporate vision, mission, goals and objectives. Worker Performance and Workplace Performance measurements are subsets of Strategic Performance measurements.

Strategic Performance

Strategic Performance measures for the workplace are ideally developed in the context of overall corporate performance measures, as in the Balanced Scorecard approach, which is a "comprehensive set of performance measures" for guiding the organization toward the accomplishment of its mission and strategy.

Strategic Performance measurements depend on the exact mission, goals and objectives of the particular company, but generally cover the following types of measurements which parallel those at the corporation strategic level:

• Financial: The cost savings (net present value or some other measurement) achieved through the re-planning of the workplace due to improved utilization, lower first costs, lower churn costs.
• Customer: Greater customer satisfaction, retention, market share resulting from better design and location of client-service and support facilities, and workplace strategies which encourage more customer "face-time."
• Business Process: Improved quality and response time, lower process costs, and faster time-to-market due to workplaces designed to support business processes.

Organizational Capability: Improved productivity due to individual and group learning, experience, abilities, and information systems and organizational capabilities which are aligned with corporate strategies and objectives.

Financial Performance Measurements

Financial Performance measurements have long been used to measure workplaces from a real estate point of view. These measurements are well developed and include:

• Capital Costs
• Occupancy Costs (amortized costs, depreciation, operation, maintenance and repair) per Square Foot
• Revenue per Square Foot
• Net Present Value (NPV) of real estate costs and revenues
• Return on Investment (ROI) of real estate costs and revenues

Customer Impacts

With the exception of customer services facilities, such as sales offices, bank retail branches, or service offices for an utility, most corporate facilities do not impact the customer directly since they are largely out of their awareness. An exception might be corporate headquarters, which are often designed with the image of the company in mind. For example, a major public utility did not want to purchase a high-rise tower for consolidating its administrative functions, even though it cost substantially less than continuing to lease its facilities, because they feared the public reaction of, "The Utility Company must be charging us too much if it can afford to buy a fancy office tower!"

Examples of performance measures of customer impacts are:

• Image of the facility(ies): determined through customer surveys, such as telephone interviews, mailed surveys, or interviews or surveys at the point-of-sale or transaction
• Convenience of the facility to the customer: measured by customer survey or by calculating the mean distances of service facility to customer population centroids
• Response time to customer request: measured by customer surveys or tracking the mean time from customer request to completion of the service
• Maximizing sales time with the customer: measured by customer "face time" or "windshield time"

Business Process

Business Process measurements focus on the performance of the workplace in supporting critical processes for achieving customer and shareholder objectives. Processes include the research and development phase for innovative, new products and services, the operational phase to deliver products and services to the customer and the post-sale service phase after the product or service has been delivered to the customer.

Possible Business Process measures with respect to the workplace are:

• Supporting the high rate of change of organizations: measured by the average time for workplace reconfigurations or the average down-time of the workers due to reconfigurations
  
• Minimizing customer delivery time through the effective geographical distribution of service facilities: measured by the mean distance of service centers to customer groups.
  
• Workplace effectiveness: measured by the effectiveness of various attributes of the workplace (furniture/equipment, ambient environment, support areas, technologies) in supporting worker performance.

Organizational Capability

Organizational Capability is the ability of the company to fully extend the abilities and potentials of its workers and the alignment of information systems and organizations to support its strategic goals. Core measures for worker capability are:

• Worker Satisfaction: measured by means of a survey
• Worker Retention: measured by the mean time from worker hire to worker severance or the percentage of workers lost through voluntary severance
• Worker Productivity: measured by revenue per worker, indirect indicators of productivity such as customer "face-time," and direct measures of worker outputs as elaborated below

Measurements of the alignment of Information systems and organizations are far less developed than the others, and there are few examples of them as "companies have devoted virtually no effort for measuring either the outcomes or the drivers of these capabilities." An example of information systems capability measurement is the coverage of current information systems as compared to anticipated needs.

Of these strategic performance measurements, the measurement of worker performance and workplace effectiveness are of the most interest to workplace managers and planners. It is in the expectation of improved worker performance that companies invest in the re-planning and re-design of workplaces to improve their effectiveness. The remainder of this paper addresses how we can measure worker performance and workplace effectiveness at a more detail level and the difficulties of doing so.

Worker Performance

Worker Performance measures the outputs and capabilities of individuals and groups. The definition of worker performance of knowledge workers, who make up the bulk of those in the office workplace, is especially difficult due to the elusive nature of knowledge work. The American Performance and Quality Center defines productivity as, "the relationship between what is put into a piece of work and what is yielded (output)." The application of this broad definition presents a challenge since everyone defines outputs differently, especially for the "knowledge worker," whose work is characterized by intangible, ill-defined, and uncountable outputs, processes, linkage to the company’s strategic objectives, performance criteria, and high independence. "

Members of the R&D Workplace Performance Consortium have perceived the measurement of performance and the contribution of the workplace to performance as a major stumbling block. If you can’t measure improvements, it is very difficult to convince management to invest money in the changing workplace when those funds could be spent for more marketing or R&D. As observed by Ann Bamesberger of Sun Microsystems, a member of the consortium, "Where [getting buy-in] gets tricky is proving that these changes have actual value. Gaining credibility. Nobody expects direct causal linkages. We should expect that our intervention is at least intuitively linked to some enhanced business outcome."

As we reviewed the organizational performance literature, it soon became very obvious that each situation is unique, and that performance must be defined in terms of the goals and objectives of the specific group versus the individual. In corporations today, it is generally the group, whether it be called a "department," "group," or "team," that is the basic work unit. Management goals and objectives are defined by group, and increasingly, with the interest in quality management techniques, such as process improvement, performance is measured by groups. This is entirely reasonable since it is more often the group rather than individuals that provides services to external or internal customers.

Our research consortia have been exploring the Family of Measures approach, developed by the American Productivity and Quality Center (APQC). The APQC recommends that performance be defined in terms that are most relevant to the group’s outputs and that a "Family of Measures" be used. "To determine how well an organization is functioning, its leaders must not restrict their focus to just one indicator--one individual, one department, one product, one process, one expenditure, one measure of success. They must examine an entire family of measures." Using this approach, performance includes a wide range of possibilities: from the excellence of the product or service, keeping on schedule or budget, time-to-market, to customer satisfaction.

The performance measures should be defined in terms of the business plan of the group, typically consisting of mission, goals, objectives and strategies. Output measures start with the business goals and objectives of the group. Since we are interested in the core measures of a group’s performance, the group’s performance should be captured in as few measurements as possible—about five to six.

These measurements can be direct or indirect measurements of performance outputs. Some desired characteristics of products or outputs of a group work process can be measured directly. Or, characteristics of the group, which correlate to performance, could be measured in order to assess performance.

These measures can be defined quantitatively or qualitatively. One is not necessarily better than the other. Logically, all quantitative measurements ultimately have to be translated to a qualitative scale in order to have meaning. For example, how much "better" is beating the budget by 10% versus 15%? This can only be determined by assigning a value scale to being 10% and 15% under the budget. In addition, qualitative measures may capture the essence of the group’s output, especially for knowledge-type workers.

Group performance measures are best developed with the managers and representatives of the group itself. Oftentimes groups already have performance measures in place as part of their quality management or process improvement processes. If so, the group may actually have historical data concerning their performance, which can serve as the basis for comparison of future performance changes.

For example, the mission and four main business objectives and output performance measures of a software development group were:

• Vision: A shared database across the corporation
• Mission: To develop a single system for collecting, processing, and reporting volume and customer information for our products, utilizing common customer data.
• Objective 1: Develop software in a timely manner
• Measure 1: Were the products produced on schedule or products on schedule/total products
• Objective 2: Develop software on budget
• Measure 2: Were the products developed on budget or products on budget/total products
• Objective 3: Produce high quality software
• Measure 3: Were the products of high quality (error-free, elegant solutions)?
• Objective 4: Create high customer satisfaction
• Measure 4: Were the customers satisfied with the products?

What Affects Performance?

Factors which directly or indirectly affect individual performance in some way, and by extension affect group performance, range across the spectrum of the workers’ physical and social environment:

• Personal
• Organizational/Management
• Process-related
• Technology
• Physical Environment

Personal Factors

• Technical competence in performing the job.
• Motivation to work performance, especially since "the work of knowledge professionals happens inside their heads." Compensation, recognition, leadership, physical environment and just about anything else that affects mood can also affect motivation.
  
• Work strategies: taking initiative, networking, self management, teamwork effectiveness, leadership, fellowship, perspective, show and tell, and organizational savvy.

Organizational/Management Factors

• Participation in determining how workers are managed and how their workspace is arranged.
• Independence and initiative in doing the work.
• The lack of obstacles to effective work, e.g., adequate resources and tools, clear mandate, lack of interference.
• Clear performance expectations and feedback to keep workers on track and not go off on unproductive tangents.
• Few and focused meetings and the lack of interruptions to concentrated, focused work;
• Compensation/Incentives

Process-Related

• More effective and efficient processes, supported by the right kinds of technologies

Technologies

• Production tools: computers, appropriate software, printers, scanners, copiers
• Communication tools: telephone, fax, modem, networks, video-conferencing
• Automation: computers and other technology to duplicate and even enhance processes performed by workers, e.g., workflow software which automatically pulls and sends information as necessary.

Physical Environment

• Spatial comfort: the most important physical factor that affects performance. Includes amount of workspace, adequacy of storage, furniture/equipment configuration, furniture comfort and ergonomics.
• Control of ambient noise such as distracting conversations, equipment noise, and other audible distractions.
• Privacy, including phone privacy, visual privacy, and freedom from interruptions.
• Air Quality: air movement, air freshness, ventilation, odors, humidity and warmth.
• Lighting: glare, brightness, colors, natural light.
• Support space: availability and adequacy of quiet rooms, large and small meeting rooms, resource centers, and lounge areas.

As shown later, the large number of possible influences of group performance make it very difficult to determine which specific factor or factors was the primary drivers for affecting group performance.

Workplace Effectiveness

Workplace Effectiveness measures how well the workplace supports the performance of the workers. The workplace can include any aspect which is of interest but, typically, you should focus on those aspects which may have been problematic before and were hopefully addressed by the re-plan. These may include location, size, physical configuration, furniture/equipment systems, ambient environment, information systems, and support systems and spaces.

In the case of the software development group, assessment of workplace effectiveness included measurements such as:

• Personal Workspace: Are the work surfaces adequate to support your job function?
• Meeting Spaces: Do you have the ability to meet with co-workers conveniently and effectively?
• Support Spaces: Do you have adequate access to shared hard copy information (files, manuals, etc.)
• Technologies: Do you have convenient access to electronic data and tools when and where you need them?
• Group Organization: Are others you depend on to get your work done conveniently accessible?
• Ambient Environment: Are you able to screen out noise distractions when you need to focus on your work?
• Overall Workspace: How effective is the overall workplace in supporting your work?

Correlating Measures of Workplace Performance

It is desirable to be able to correlate the results of these three measures (Strategic Performance, Worker Performance, Workplace Effectiveness) and to conclude that:

1. The measurements changed in some predictable, consistent fashion. For example, both worker performance and workplace effectiveness improved
2. That improved worker performance was the result of more effective workplace performance.

For example, if frequent interruptions were identified as a barrier to better performance, the workplace was changed to deal it, and the group perceived that there were fewer interruptions as a result of those changes, then this change probably contributed to improved performance.

But although it may be possible to make the first conclusion, the second conclusion is very difficult to obtain because of the dangers of inferring correlation between events. We are mindful of Aristotle’s admonition:

Assuming that if one thing is or becomes, a second is or becomes, men imagine that, if the second is, the first likewise is or becomes. But this is a false inference…the mind, knowing the second to be true, falsely infers the truth of the first…

Correlating the different measurements of workplace performance is difficult. If there is an improvement in workplace effectiveness, it is not clear that improvement of worker performance results. And certainly the same is true for strategic performance.

To address whether workplace effectiveness infers improved worker performance or strategic performance would require a well designed and rigorous experimental or analytical approach which must confirm the following conditions:

1. Improved workplace effectiveness and improved worker performance vary together in a consistent and predictable fashion
2. Improved worker performance occurred after improved workplace effectiveness
3. Improved worker performance is not due to other factors

It is the third requirement which is the most formidable. As described previously, worker performance may be the result of many kinds of changes (new management organization, processes, technologies, furniture and equipment, the general upswing the economy, etc.), and the simultaneous change of all of these variables is not unusual when developing a new workplace or re-planning an existing one. The effect of non-workplace variables, such as management changes, or new leadership, would have to be shown to be inconsequential for us to conclude that group performance changes resulted from workplace changes. This can be done through the use of control groups (one, that does not experience changes in the workplace, for comparing with the group that does) or showing that alternative explanations for changes in worker performance did not have an impact on worker performance.

In most cases, companies are interested in results and are not in the business of seeking "truth" as in academic research, and showing the first two conditions is usually sufficient. More to the point, few companies have shown interest in paying substantially more for confirming the third condition. Since we are starting with the viewpoint that worker performance is the resultant of the interplay of many factors, perhaps the point is to see how and if performance was improved as a result of all those factors, instead of just trying to understand the impact of isolated factors.

Measurement Methodology

The workplace performance should be measured as part of an overall planning/design process for the development of a workplace. The information developed in the process of planning naturally feeds into the workplace performance measurement process.

1. Orientation: Meet with leaders and representatives of the business unit to review project goals and objectives, corporate context, vision, goals and objectives of their business unit, and performance objectives. These results are the basis of discussing possible Strategic Performance measures of the workplace. This and following meetings should be kept small, numbering no more than eight or ten so as to encourage interaction. Leaders of the company may be interviewed as well so that the team is informed of the overall corporate vision, strategies, goals, objectives, and performance measurements. Leaders of the business group and most certainly the company may prefer to be interviewed prior to the orientation meeting.
2. Strategic Performance Measurements: Prepare draft strategic performance measurements and review with representatives of the business group.
3. Work Process Review: Meet with focus group of business unit to review the business visions, goals and objectives, understand their organizational structure, analyze their business processes (by mapping them), identify obstacles to better group performance, discuss possible Group Performance measures, and begin to explore workplace strategies.
4. Group Performance and Workplace Effectiveness Measurements: Develop Group Performance and Workplace Effectiveness measurements based on the results of the Work Process Review and review with the focus group.
5. Workplace Strategies: Review workplace strategies with a focus group and revise as required. Workplace strategies are best developed beforehand, by the planning team, based on the results of the previous review of the work process, and then reviewed by business group representatives.
6. Pre-move survey: Administer Group Performance and Workplace Effectiveness surveys shortly before the move. The survey can be administered by telephone interview, written survey or by e-mail. The latter has been found to be very efficient since the participants input their own responses. In companies with an "e-mail culture," this is the preferred method. If it is possible to include a control group in the study, the same pre-move and post-move surveys would be administered to that group as well.
7. Design Development/Contract Documents/Construction/Move-in
8. Post-move survey: Administer surveys three months or more after the move. Although more than a single post-move survey would be desirable to study if the responses continue to change through time or stabilize, clients usually are not willing to pay for this extra insurance.
9. Survey Analysis: Analyze the results of the pre- and post-move measurements. Compare the results of the measurements for group performance and workplace effectiveness.
10. Report: Report results of the survey back to the group and the company. It is important to get results back to the group since they "earned" that right by participating in the process.

An Example of Workplace Performance Measurement

Actually measuring group performance and workplace effectiveness as a result of workplace changes is not usually done. It is not because of the lack of interest, but rather due to the inexperience or lack of expertise in performance and workplace measurement techniques of those dealing with workplace changes. It is still regarded by some noted researchers in the field of workplace planning as "irrelevant" because of the difficulties of measuring group performance and of correlating performance to specific workplace changes.

Their views notwithstanding, a few companies have had success dealing with this difficult area. At Hewlett-Packard, as part of their Headquarters Renewal Project, the performance and satisfaction with changes in the workplace were evaluated using pre- and post-move surveys of 122 workers. The changes included:

• Increasing the overall density and team spaces by reducing personal work space.
• Updating and thoroughly utilizing integrated information technology and taking advantage of state-of-the-art systems furniture.

Worker performance was measured by rating from excellent to poor, the group’s performance to:

• Produce quality services/products;
• Produce services/products in a timely manner;
• Produce services/products within budget.

The results show that both Worker Performance and Workplace Effectiveness were improved by a significant margin. The perceived performance in all three parameters increased in the range of 30% to 32%.

While the perceived change in workplace effectiveness varied from 10% to 103% for the measured workplace parameters, respondents uniformly perceived that the workplace was more effective. The greatest perceived change was with the meeting spaces (39%), followed by personal workspace (38%), and then technology (31%). Among the specific indicators, better ergonomics and work surfaces were rated significantly better than the others, while adequacy of the workspace was rated least improved. These results are not surprising since changes were targeted at improving specific problems in the workplace.

We can conclude that worker performance was significantly improved, along with satisfaction with the workplace. While we cannot say for certain that the workplace changes led to the improvement in performance, we are fairly confident that they were significant drivers since they were specifically addressed as barriers to better performance.

What’s Next? A Standard Workplace Diagnostic Tool?

The process outlined above for measuring workplace performance is time-consuming and requires a sophisticated understanding of the planning issues and measurement issues. It would be ideal to have a generic tool, which can be applied for many workplace planning situations. Not only would such a tool be less costly to use, but results might also be comparable across a range of working planning efforts. The development of such a tool is, in fact, an objective of the Workplace Productivity Consortium, but its realization is frustrated by a dilemma. Workplace performance measures are meaningful in the context of a company’s specific business and a group’s specific organizational plans and therefore are idiosyncratic to that particular company and business group. In contrast, a generic tool must have common, standard measures, which can be applied across the sampling of many companies. It is difficult to satisfy both of these concerns with a single tool. A compromise solution may have a core of standardized measures with the ability to customize the tool with additional measures particular to a company.

Conclusions and Summary

And so it turns out that Virginia, who claimed that it is not possible to measure workplace performance, was not totally wrong. You can measure workplace performance in any number of ways. In this case, I have shown how you can measure it in terms of Strategic Performance, Worker Performance and Workplace Effectiveness. But it is very difficult to conclusively show the causal link between workplace changes and consequent improvements in worker performance.

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