Effects of Spatial Interconnectedness on Unit-Level Human Capital Performance

Abstract

Existing strategic human capital literature indicates that unit-level human capital performance depends on task complexity and the relational dynamics of a unit’s social environment. However, physical work environments, where task execution and relational dynamics happen, may also matter to unit performance because they shape interactions. Therefore, we examine the effect of spatial interconnectedness, a spatial attribute which accounts for interaction and movement, on unit performance. Using interrupted time series quasi-experiment, multi-level mixed methods and a novel space syntax methodology, we find that spatial interconnectedness correlates positively with unit performance, but such gains diminish with increased coordinative task complexity. These findings contribute to the theory of human capital resource emergence which currently omits spatial factors. It also provides practical insights on human capital deployment in firms.