A programmer's work environment should be a supremely comfortable place to sit, look at information on a screen, and type. At ArsDigita we accomplish this via providing Aeron chairs, the keyboard of the programmer's choice, and at least two monitors. In the summer, the place should air-conditioned [sic] 24 hours per day, 7 days per week. In the winter, the office should be heated and humidified (often neglected). The air should be cleaned year-round with high-efficiency mechanical filters and electronic cleaners so that allergy sufferers are not discouraged from working.
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If you see one of your best people walking out the door at 6:00 pm, try to think why you haven't challenged that person with an interesting project. If you see one of your average programmers walking out the door at 6:00 pm, recognize that this person is not developing into a good programmer. An average programmer's productivity will never be significant in a group of good programmers. If you care about profits, you must either come up with a new training program for the person or figure out the best way to terminate his or her employment with your organization.
I'm not sure if the working environment described here is heaven or hell or some unholy mixture of the two.