yahooAs you may or may not have heard, Yahoo!’s CEO Marissa Mayer recently issued a policy change in the form of a memo delivered to all Yahoo! employees that was… ill-received, to say the least. The memo, sent from head of Human Resources, Jackie Reses, stated that all employees who currently had arrangements to work from home, or telecommute, would be required to return to the office by June of this year.

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. – Jackie Reses, Yahoo! EVP of People and Development

Vehement criticism has sprouted from news sources and around the blogosphere directed at Mayer and the rest of Yahoo! management for a number of reasons, the most common being the following:

  1. Many feel that Yahoo! infringed upon an employment arrangement that may have been contingent upon one’s ability to work from home;
  2. Many employees believe that they are more productive when working from home due to less distractions, which in turn means less stress;
  3. Many feel that this policy change actually killed morale instead of strengthening it.

In an age where telecommuting is becoming increasingly acceptable (if not expected), and jobs in the tech industry are becoming increasingly more competitive, it would seem that none of the above are conducive to the rebirth of a former internet powerhouse.

But was Mayer’s decision truly a misstep, or just misunderstood?

A study conducted by members of the Stanford University community (pdf) seems to substantiate the first two claims: employees who chose to work at home typically did so on the basis of some contingent factors (i.e. family obligations, lengthy commute, etc.) and employees working from home were generally more productive and had lower turnover rates.

Mayer’s point of view:

  • Quality over quantity: While productivity on average increases when employees are allowed to work from home, this does not mean that the quality of what is produced increases. The bread and butter of powerhouse companies is not that their employees are able to spit out products the fastest (though of course, speed helps), but that employees desire to be near the company (both mentally and physically) because that is where the soil is most fertile for culture, and thus innovation, to grow.
  • Conversation catalyzes innovation: The study published by Stanford University also indicated that the apparent downsides to working from home were feelings of isolation and lower instances of promotion due to lack of face-time (familiarity) with higher-ups. Obviously for some companies, like a China-based call center where innovation is not as highly regarded, these downsides are not much of an issue, but for a company like Yahoo! where there must be a constant flow of ideas they can make or break you. Isolated employees are less likely to converse, and therefore are less likely to create (or so the thought goes).
  • Work from home, or shirk from home?: With the company on thin ice, there is no time to play guessing games. Though working from home works for many employees, some employees use that time as an opportunity to slack off, or they simply underestimate the amount of home distractions that are also present. With every employee in the office and accounted for, it makes management’s job a whole lot easier; the trick is just to find an office climate that works for everyone.

If all that a CEO should care about at the end of the day is the bottom line, then perhaps Mayer did make the wrong move, but if there is more to being a successful company than simply having “productive” (scare quotes for ambiguity) employees, then Mayer could potentially be lauded as an HR guru for years to come.

The results remain to be seen.

Did Yahoo! set themselves up for failure as competitive candidates for tech industry jobs seek (flexible?) work? Or, did they set themselves up for success as they begin to improve their facilities to accommodate returning employees and begin to think up new ideas to boost company morale and ultimately innovation? Is telecommuting right for your business?

Check out these other articles for some competing view points:

Check out these articles for more research related to working form home:

[cc photo credit to Yodel Anecdotal via Flickr]