How watercooler talk can improve productivity and culture

24 October 2019
New economics research reveals importance of workplace chatter
Workers idly sharing gossip around the watercooler might seem like the bane of an employer's existence, but these informal interactions could enhance a firm's productivity, economists claim in a new research paper.

In a paper recently published in the journal Games and Economic Behaviour, economists from the University of Sydney, Kyoto University and Monash University explain how managers can tinker with their organisation’s structure and physical work environment to harness workers’ informal interactions for the firm’s advantage.

“Our model is based on the already well-documented fact that humans are particularly good at mutually beneficial collaboration,” said Associate Professor of Economics Andrew Wait, from the University of Sydney's School of Economics.

“Social interactions between workers characterise the way things get done in an organisation. Employees are more likely to display innovative and speculative behaviour at work when enough of their colleagues do likewise.”

Associate Professor Wait said that if there are no ‘watercoolers’ – anywhere small groups of employees can chat and collaborate away from their formal working space – employees are much less likely to share their ‘risky’ ideas and intentions.

“These ideas are precisely those needed to fuel innovation and productivity and improve culture in the workplace,” he said.

So, what can employers do to encourage more watercooler talk? In the paper, the economists outline several organisational design mechanisms firms can use to encourage greater communication among employees. These include job rotation programs, which see workers rotate through tasks or roles at the same firm. Communication and collaboration can also be encouraged by the structure of the workplace and through informal social events.

The paper highlights caveats for employers to be wary of – namely that the larger a team, the less likely members are to engage in watercooler discussion which impacts on the firm. They also argue innovative research divisions often need to be kept separate from the rest of the business, to foster collaborative idea sharing - an essential element of innovation.

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