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What makes employees in modern offices happy and productive: the effects of internal and external office environment


  • Ieva Augutyte Kvedaraviciene
  • Rta Kazlauskait


Effects of the office environment on employee well-being and performance have been analysed quite extensively. Nevertheless, the existing knowledge is rather fragmented, with majority of studies addressing some specific aspects of the physical environment and lacking a more comprehensive understanding of the effects of the physical environment on employee well-being and performance. Besides a vast majority of prior research investigates the effects of the internal environment, while studies of the external environment have only gained research attention in the past few years. In this study we look into the effects of both internal and external physical environment as well as overall satisfaction with the physical environment on employee motivation, job satisfaction, cooperation and self-perceived performance quality and accuracy. To test the above relationships, we conducted a survey of employees (n=274) working in modern offices (A and B class built or fully renovated not earlier than 2000). The results showed that there is a positive relationship between internal environment and all dependent variables under this study, while the external environment is positively related with motivation, cooperation and self-perceived performance. There is also a positive association between overall satisfaction with the physical environment all four dependent variables. In addition, our results show no significant association between office type and employee well-being and performance, while perceived privacy was found to be positively associated with job satisfaction and cooperation.

Suggested Citation

  • Ieva Augutyte Kvedaraviciene & Rta Kazlauskait, 2019. "What makes employees in modern offices happy and productive: the effects of internal and external office environment," ERES eres2019_90, European Real Estate Society (ERES).
  • Handle: RePEc:arz:wpaper:eres2019_90

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    internal and external environment; modern offices; Performance; Well-Being;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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