Institutions hope that incentives and space charges will motivate academics to better utilize or give back space. However, space charges have little impact when they aren’t directed toward a specific type of space. Incentives that specifically target a particular kind of space help academic leaders determine what actions to take to improve utilization.
Component 1: Establish clear, enforceable standards
For several years, Stanford University successfully implemented incentives targeted specifically toward improving office space utilization. There were two components to Stanford’s unit-level office utilization bonus/penalty. The first was establishing clear, enforceable office space standards.
Stanford had role-specific space targets, which were enforced in both new construction and existing spaces. The table below illustrates how Stanford calculates a sample college’s office space allocation based on its distribution of roles. The second column highlights Stanford’s office targets. Most roles had a built-in buffer of 15% to account for older buildings.
Using these targets, each college’s office space allocation was calculated based on the number of each type of employee it has. Its target allocation was then compared to its actual amount of space. Note, subtotals by role are irrelevant. In this example, the college is 9,364 square feet over its allocation, shown in the far right column of the “Total” row. Finally, Stanford allowed for a “below the line” adjustment to accommodate special circumstances. In this case, the college had 2,392 square feet of approved second offices.
Component 2: Penalize or Reward Colleges Based on Space Usage
The second component of this practice was penalizing or rewarding colleges based on their actual space allocation. Stanford charged units $33 per square foot of occupied space. They initially selected the $33 charge based on indirect cost recovery per square foot of research space, but it was not permanently set at that level. Stanford simply aimed to select a charge that will sufficiently motivate colleges to change their behavior. If the $33 charge began to lose impact, Stanford could simply increase it.
For example, if College A was 3,078 square feet below its allocation, it received a bonus of $102,000. But if College B was 15,219 square feet over its allocation, it would incur a penalty of $502,000. College B had three options to satisfy this penalty. It could pay the penalty, use the money to make renovations that bring the college into compliance, or return space to a central pool.
The unit-level office utilization bonus/penalty had a meaningful impact on space behavior at Stanford. For example, one unit reconfigured its offices and returned 10,000 square feet of space back to the central pool.
Stanford successfully used this program to recover much-needed office space. After several years, returns began to diminish. Stanford has since moved away from this program and pursued other strategies to manage office space.