Is Working from Home Working Out? The Yahoo! Argument

A corporate wellness policy change made by Marissa Mayer, newly appointed CEO of Yahoo!, has put the work-at-home issue front and centre for many companies. Mayer quashed the option altogether for her employees, with much of the move’s media coverage portraying it a step backwards, but could Mayer have a point?

According to INSEAD Affiliate Professor of Organisational Behaviour, Erin Meyer, ‘I believe the move by Marissa Mayer was a smart one. She saw that productivity per individual at Google GOOG +2.21% was higher than productivity per individual at Yahoo!. Google generates $931,657 in revenue per employee, 170% higher than Yahoo’s $344,758 per employee. If Mayer’s goal is to increase that productivity level, bringing people into the same office space is one quick and inexpensive way to accomplish that goal.’

A memo from Jackie Reses, Yahoo! head of HR, was leaked and this is what sparked off the big debate. The memo explained, ‘To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.’

Meyer noted that face-to-face interaction helps companies to reach their objectives more easily. ‘Because we are human beings, when we collaborate, we rely heavily on what I call mutual adjustment,’ she said. ‘Mutual adjustment means that you notice how others are working around you, they notice how you are working, and through hundreds of subtle cues you adjust to one another, and the collaboration happens. When people are geographically dispersed, they don’t have the same high level of cues in order to mutually adjust which makes collaboration more difficult.’

She added, ‘It’s a myth that virtual teamwork costs less than face-to-face collaboration. There is this idea that because it requires less electricity, less desk space, and less rent to collaborate virtually, it’s therefore less expensive.  But it takes a lot more time to organise and monitor effective virtual teamwork.  When we are working together but working apart it requires a much greater effort to assure the communication has passed as expected.   Misunderstandings are more likely and that leads to higher costs.’

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