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Productivity and FM : How can we contribute to improved output?

(First published in Journal of Corporate real Estate, 2003)

Most managers, I think, make the assumption that happy employees are productive employees. Certainly most staff would agree that this is the case.  However, there is little empirical evidence to support this supposition. What evidence there is seems to be anecdotal, and there is a considerable risk of everyone involved in the management of staff believing what they would like to be true, rather than what can be shown to be true.

There are two reasons why we cannot prove the link between performance and “happiness”:

Morale

Firstly, it is almost impossible to define or measure “happiness” in this (or any other) context. Morale (which might be considered to be the manifestation of happiness in the organisation’s workforce) is a volatile commodity, and not particularly susceptible to objective measure.

However, there are some indicators which reflect the state of staff morale.  For example levels of (and trends in) absenteeism, sickness absence, and staff turnover will all provide an indication of the level of employee dissatisfaction. On a more positive note, carefully constructed employee surveys can revel a great deal, but a number of pitfalls need to be avoided.  Most importantly, surveys must not be “self selecting” in terms of the replies;  exercises where blanket surveys are issued and only a few staff elect to respond are worthless.  What is required is a targeted and representative sample, with a much higher rate of return, and with consistent, carefully thought through questions which aim at assessing culture, communications, and commitment.  The aim should be, over time, to assess trends relating to these issues, and to compare these with productivity. Facilities managers may also want to consider these issues in the context of changes to the physical environment, in order to begin to build up a feel for how such change affects staff.  Nonetheless, we have to recognise that this careful approach to measurement rarely takes place.  As I shall discuss below, there has historically been (and remains) a disconnect between HR and facility managers, so that data gathered is not shared in either direction, to the detriment of the organisation.

Productivity

The second barrier to proving the linkage is that productivity is also (at best) awkward to measure.  This may have been the case even when the UK was primarily a manufacturing economy, but in today’s service economy, measures of productivity are very elusive.  Today, few jobs are so simple that output can be easily measured – perhaps call centres are one of only a few examples – and most jobs contain too great a variety of tasks for simple measures (like the numbers of units produced)to be applied.

It is, perhaps, peculiar that organisations have such difficulty with this, since it lies at the core of their effectiveness. It seems that individual staff recognise, in some form, when they are over-worked or under utilised, and responsible organisations attempt to discourage and deal with the effects of over-work. But this happens in a context in which individual effectiveness at work is not generally objectively measurable.  It is possible that one solution – and a challenge for organisations in the future  – may be to trust their staff more, and allow them greater control over workloads and time commitment.  That, though, remains another debate, and one which is wider than the facilities management remit under discussion here.

So, how is productivity defined? The US Bureau of Labor Statistics defines it as:

“a measure of economic efficiency which shows how effectively economic inputs are converted into output”.

And why do we think that productivity measurement is important? “Advances in productivity, that is the ability to produce more with the same or less input, are a significant source of increased potential (…) income.”  One means of measuring performance is by comparing the value of goods and services produced with the value of the inputs which were used in production. “Labor productivity is the ratio of the output of goods and services to the labor hours devoted to the production of that output”  says the US BLS.

This is a perfectly good measure, but how many businesses actually carry out such measurement for themselves? If you were to look at the Bureau of Labor Statistics website[1] from which I sourced the quotes above, you would find that the underlying complexity of these figures is daunting: see Table One (below)for an example.

Furthermore, such measures might work for the commercial sector, but have little or no applicability in the public and not-for-profit sectors.  In practice, the UK public sector is subject to a mass of output measures, but they are only comparable within the sphere of organisations of the same type (hospital vs. hospital works, but hospital vs. school doesn’t).  And, again, the problems about underlying individual productivity still pertain: we can’t assess the output of any given administrator in one hospital against a similar position in another. The output measures relate only to the whole organisation, which limits their usefulness for line management, but also for analysis by facility managers as well.

From a facility manager’s perspective, of course, this is not an intractable problem, because we serve the organisation as a whole.  This puts into context one of the common problems we face at an operational level – how to deal with the differing needs of individual staff  – because we have to recognise that we are charged to provide overall optimum conditions, rather than bespoke conditions for individual service users.  One solution to the dichotomy between keeping these end user customers happy while providing efficient and optimum conditions may lie in finding the means of allowing them more control over their location and environment, as I will discuss later.

Table One: US Bureau of Labor Statistics: Productivity growth calculations[2] (part)

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Allied to this, the more cerebral the work we undertake, the more difficult measurement of performance becomes. Charles Handy, for example, talks about the value of work increasingly residing in information, ideas and intelligence, none of which are easy to measure.  Indeed, Handy even obliquely suggests that measurement of productivity might be counter productive, if it demonstrates a lack of trust in the workforce – the antithesis, if you like, of the “what gets measured gets done” mentality.  Our world is increasingly moving towards work being less routine and menial, more creative and less bureaucratic.  But the workplace has hardly evolved, and nor has the management of it.

For facility managers, too, there is the added problem that – because productivity might be seen primarily relayed to staff morale – any data which might be collected may not be shared with the facilities management team.  Although experience suggests that most organisations either don’t measure or don’t widely report the productivity of white collar workers, this is not impossible to do, at least in collective terms.  But even if an organisation were to measure revenue per employee, this would only be a measure of collective rather than individual endeavour. It can be done (see Table Two), but how much does this tell us about workplace effectiveness?  It becomes difficult to distinguish what factors actually impact on productivity, and to what extent.

This is compounded by the fact that all sorts of interest groups claim to have an impact on productivity, including occupational health professionals, designers, psychologists, software providers, Human Resources managers, to name only a few. To this extent, facility managers will need to make a very clear contribution if they are to be able to show that their work makes a tangible and worthwhile difference.

Despite all these issues, however, it is still clear that Facility Managers have responsibility for what is generally accepted as one of the key elements in ensuring “happy” employees – the workplace.  Management theorists including Mayo, Hertzberg and Maslow have all identified the importance of the environment as an essential component in the process of motivating staff, without which other motivating activities have no effect.  So how can Facility Managers work to help improve productivity, and how will anyone know if they have done so?

Three motivation tools

In essence, there are three generally recognised means of motivating staff: scientific management, financial control, and human resources management.  If one accepts that these represent a continuum from the past to the present (and indeed from coercive to enlightened management cultures) it is arguable that  the facilities management profession is stuck with a historically redundant management style.  If this is the case, then the industry needs to break out of this position in order to be able to best serve our customers.  Not only is facilities management dependent on its employees for successful service delivery: the whole raison d’être of the industry (and thus the focus of facility managers) ought to be primarily directed towards the creation of workplaces which support and enhance the productivity of the host organisation’s staff. And thus our understanding of what makes employees productive, and how we can contribute to that productivity, needs to become much more sophisticated.

Offices as machine for production

Let us now consider the way in which facilities management has evolved to it’s current position so far as the workplace is concerned.  Too often, I believe, facility management teams regard the running of a building as an end in itself.  Although obviously not universally the case, this approach predominates in the industry worldwide.  The facilities management focus is on cost and fault reduction above all else. One only has to consider the content of many of the training courses and qualifications to see that the search for economic efficiency (minimising the usage of the cheapest resources) prevails over any concept of effectiveness (maximised output) of the buildings.

I have argued previously[3] that this may in part be because of the metaphors we employ when thinking about our work. Drawing on the work of Gareth Morgan[4], I believe that our reliance on one vision of the workplace constrains our conception of what is possible. And, I believe, the metaphor which still predominates in facilities management is the “scientific management” (or Taylorist) view of organisations as machines for production.

Table Two: Employee Productivity – Professional Services – US National Averages (extract)

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© 2003 BizStats.com

Taylorism and buildings

This state of affairs is not solely the fault of facility managers.  Often the entire organisational hierarchy – including most of the staff who work in buildings – seems to share the same view.  Indeed, for all that it was discredited long ago, Taylorism remains the dominant model for production output, and that includes routine clerical activities as well as manufacturing.

Taylorism sees staff simply as cogs in a machine.  Those workers do not require motivation – they simply have to perform the same tasks repeatedly and efficiently.  The role of the organisation is therefore to ensure the efficient arrangement of working elements – tools, parts, fellow workers – and to ensure that the employees use them in the correct way.  In other words, to shift all responsibility for the organisation of work from the worker to the manager.  There follow a number of other effects:

  • work is assessed scientifically to design the optimum working methods
  • workers are trained in carrying out one task only to the most effective result; and
  • workers are monitored continuously to ensure compliance.

There are considerable deficiencies in this as well as some strengths. Because, aside from the dubious claim of higher productivity, what does Taylorism actually produce?

  • De-skilling of work
  • High levels of staff turnover because of..
  • Low levels of staff motivation
  • Disconnection between work design and execution
  • Lack of innovation – there is not one best way to organise
  • An oversimplification of the interface between the organisation and the world

The epitome of this thinking, of course, is the production line.  And why is all this unhelpful?  Because humans are NOT machines: they don’t perform with the same regularity, and they need motivation, management and interaction if they are to perform at their best.  But I contend that we still, to some extent, approach facilities management in a Taylorist way.  How much of our industry persists in treating buildings – and the staff in them – as if they were simply machines for production?   Look back at the features of Taylorism and you will see that we still do this, to our own staff, our contractors, and to our customers.  We have :

  • prescriptive systems of working
  • an the obsession with industry standards
  • high levels of monitoring and control
  • benchmarking to compare ideal performance
  • solutions which are designed and imposed by managers not workers (technocratic management)

We apply (or seek to apply) the same process solutions to every building.  It is not that I consider that none of this is ever necessary, but rather that we have walked with our eyes shut into this situation.   For example, one thing buyers look for when outsourcing is proof that the supplier has robust processes.  In a service industry, it is difficult to see how else buyers can make objectively justifiable value judgements in the pre-delivery phase.  But it seems to be rare indeed that any real attempt is made to compare the process being bought with the needs of the customers – perhaps because the tools for such comparison don’t yet exist. And so the industry persists with an outmoded model, without recognising the implications.

Financial management

This was the next development from Scientific Management, and at least it has the merit of recognising the need to motivate staff.  We are probably all familiar with this approach – the creation of financial targets, often allied to the payment of additional bonuses for achieving targets. On the positive side, this approach allows staff to take a degree of control over their own working methods, provided they are directed towards (and deliver) the required outputs.    Against this, however, targets are always set by senior managers, leaving little sense of ownership with the employees, and those targets almost always escalate over time – in other words, employees are locked into an ultimately  unwinnable scenario, and are effectively penalised if they succeed too much because their targets will rise faster. In practice, staff tend to learn to manage this problem by deliberately under producing once they reach a certain point, and “burning” slack time.

Again, we tend to use the financial management approach on both sides of the facilities industry, especially in our approach to contracting.  Often, we insist on the additional application of penalty clauses for poor performance as well as bonus payments for good (almost always meaning cost compliant) performance.  It is hard to see how we expect to build long term relationships or any ownership of results under these circumstances.

What staff want and need

I believe that, to move forward, we must focus on the employees’ needs.  Too often, facilities providers concentrate on the buildings rather than the occupants.

If we assume that staff are not homogeneous, what generality of things would be useful for them in their workplace?  Perhaps considering some of the psychology of work and the workplace would be helpful – and too few facility managers really understand this aspect of our work.

There are, in essence, only a few fundamental theories about motivation at work, and of those only three really involve the working environment – the balance being more concerned with interpersonal issues and management style.   So those that we can draw on are  Mayo’s Hawthorne Experiments, Maslow’s theory of a hierarchy of needs, and Herzberg’s development of that into motivation/hygiene theory.

Prima facie, the Hawthorne experiments give some indication that environment has an impact on performance, in that changes to the working conditions stimulated greater productivity, even where those changes were negative (Table Three). The experiments began with staff working 48 hour week producing 2,400 items per week.

Table Three: Summary of Hawthorne Experiment effects[5]

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Even if we accept the findings as commonly interpreted, however, what do they tell us? Only that staff respond positively to changes in the workplace, which may  be no more than common sense would tell us.  In this context, Herzberg’s development of Maslow’s hierarchy of needs may be a more useful model for those looking to manipulate the workplace to improve productivity.Leaving aside the age of this theory (the study was carried out in the 1920’s) and the fact that it relates to a US manufacturing facility, it is as much about team working and bonding in the face of adversity as about the impact of the workplace.  Furthermore, some commentators have alleged that the findings were highly subjective and ignored contrary results in other teams in the same work place.

Herzberg looked at working conditions from a “hygiene/motivation” perspective, dividing aspects of the workplace into two types of factor. Hygiene factors are those without which there is dissatisfaction; Motivations factors, as the name suggests, provide positive encouragement. In this analysis, the work environment is a hygiene factor (one of eight including company policies, supervision, staff relationships, salary, status and security), which is to say, not motivational but able to prevent staff dissatisfaction.   However, a further development of this theory (by Rensis Likert) suggests that because the workplace is usually a group environment, the influence of the workplace on the work group is what is most important in influencing individual and team productivity.  To this extent, the effects of environment are:

  • To influence the morale of the group
  • Determine whether the group achieves the organisation’s objectives
  • Determine the degree of co-operation afforded by the group to its members
  • Motivate the group to perform
  • Determine the quality of human relations within the organisation

For the purposes of facility managers, this is much more positive than looking at the environment from an individual’s perspective.  But does it help either facility managers or building occupiers?

To work this out, we need to look at how we might apply these theories.

Applying the science

Even a brief glance at most workplaces might convince you that most organisations make no attempt to apply the psychology, even if they know it.  The disparity in the resources and kudos given to formalised HR activities and the attention paid to the workplace is clear in most business.  The salaries and numbers of staff involved, and the generally more senior status of HR managers, reflects a perception that this is more important than facilities management.  But as we have seen, if Herzberg is right, then the organisation needs (at the least) to maintain a basic level of quality in the workplace before staff can be motivated to perform: and Likert goes further, suggesting it is an essential aspect of positive performance.

But does this knowledge lead us to better workplaces?  It is obvious, for example, that less thought goes into the design of workplaces than into, say, retail spaces. Compare the deliberate manipulation of shoppers through temperature, lighting intensity and tint, floor finishes, sound and so on, to the design of the average office space.  It is immediately clear that retail spaces employ a barrage of (more or less) sophisticated techniques, whereas in an office uniformity and simple basic provision are the order of the day.  The most one might hope for in most offices is that some thought has been given to an efficient flow of people around the desking and some effective proximity of dedicated spaces like meeting rooms, kitchens and toilets to the main working area. In practice, the emphasis in office design tends to revolve around space planning and some relatively superficial colour scheming, which usually is more to reflect the corporate image than to assist staff in working effectively.  What is most noticeable, especially in London, is the extent to which “good” space planning revolves around achieving high densities of staff.

Allied to this, the demands from staff are evolving rapidly, and successful organisations want to keep their staff and provide the most effective workplaces for them.  It is arguable that, with this new generation, the old norms can be abandoned and new opportunities exploited.

One of the key changes is the startling – yet only slowly recognised – revelation that work need not be boring.  To paraphrase a presenter at a recent seminar – “how on earth did we ever allow work to become such a terrible way to spend our time?”

As employers (and providers of space) you might think the workplace ought also to reflect this – it should not only not be boring, it should provide positive stimulation and excitement.  What this might mean in practice is much more user-defined space .  We might, for example, want to stop providing very restricted forms of spatial model throughout an organisation. While the move away from cellular and hierarchical space allocation has been positive, we need to recognise that people need different types of surroundings depending on the specific activity they are engaged in at any given time, and they need to be able to change that space  – or their own location – when the activity changes.  We already do this with meetings, so why not with other types of work?  Activities like creative work, tasks requiring concentration, and all the various types of communication have different optimum environmental conditions – and these might also further vary according to the preferences of the staff involved.  So, we need to find a way of creating much more flexible space in order to bring out the best from our workers.

Co-operation

Earlier, I referred to the large number of professional disciplines staking a claim to improve productivity. There are sound reasons to see this complexity as an opportunity.  If, for example, one the issues which prevents us proving our claim is that productivity data is held by HR or finance, how much better for facility managers to forge an alliance with that team than to remain insular and excluded?  Consider our role in the context of the organisation: if (as I alluded to above) we exist to serve the organisation, not to run buildings for their own sake, then we should be doing everything possible to maximise benefits.  This includes forming close relationships with the other central support services – HR, finance, IT and so on.

In addition, we also need to be fully involved in work design : this means an involvement with operational management to fully understand the needs of different work groups, in order that we design and provide suitable accommodation, and can input our experience of “best practice” from elsewhere in the world.   Without these contacts throughout the entirety of the organisation, facility managers cannot be fully engaged with the needs of the staff and the possibilities available to them.

By becoming engaged in a “holistic” and co-operative solution, however, we not only have access to better data, but begin to prove ourselves worthy of our peers’ respect. It will only be by proving the worth of our contribution that senior managers begin to take the profession seriously.  This should, of course, be the result rather than the objective of our more complete involvement in organisational management, and we should aim to make a much better contribution to the achievement of the organisation’s objectives. The self-fulfilling complaint of facility managers that they never get consulted has got to be confronted – not only for our benefit, but for the benefit of our host organisations.

Summary

Finally, we need to reconsider the prevailing orthodoxies about facilities management.  Cost management for example, which is one of the strengths of the profession, is obviously crucial. Thoughtful measurement and comparison of cost and its component elements is a vital element of successful productivity management, and what organisations need in order to grow is high levels of productivity.

Facility teams are usually neither encouraged nor informed about how they contribute to this.  While businesses may measure, for example, revenue or profit per employee, this is never reported to the facility managers.  In many organisations, though, one might suspect that the measurement of productivity is not routine, and it may be to the advantage of facility managers to promote some sort of measurement (with colleagues in other departments) and the extent to which facilities management techniques can contribute both to that measurement (because of the amount of crucial data we control) and to the achievement of improved productivity.

It might still only be a measure of collective, rather than individual, endeavour, but it would have value as a balance against the pure cost focus approach which dominates the facilities management industry today.  Facilities management has to become a profession which not only truly embraces the concept of value added services, but one which can measure and prove the value that flows from our interventions.   It is the facility manager’s unique ability to control both significant data and much of the variable cost base that places us in a strong position to improve our organisation’s productivity. We have to make sure that we deliver those benefits for ourselves, our customers and our employers.

(c) Dave Wilson, 2003

 



[2] See http://www.bls.gov/opub/hom  for the full details

[3] IFMA World Workplace Europe, May 2003

[4] Images of Organisation, Sage Publications, 1987

[5] Source:  accel-team.com