The purpose of this study is to empirically examine the relationship between physical work environment and worker’s productivity of selected small and medium scale enterprises in Oyo, state. Two objectives and hypotheses each were formulated for the study. Data was acquired through the administration of a structured questionnaire that highlighted some of the factors related to influence of the workplace on employee productivity. This was administered to one hundred and twenty (120) workers randomly selected from a population of One Hundred (100) SMEs in Oyo state. One hundred and sixteen (116) workers responded. Respondents were from various categories ranging from frontline production, marketing, sales and administrative personnel. The data was analyzed using descriptive and inferential statistics The results of the study reveal that there was a statistically significant correlation between physical environment/ ergonomics of the workplace and productivity of small- scale enterprises with the value equal to r (116) =.296, p<.0.05.. Similarly, there was a statistically significant positive correlation between social interaction in the workplace and productivity with the value equal to r (116) =.663, p<.05. Based on the findings, it was concluded from the study that the two variables tested have relative noteworthy impacts on the productivity of workers in Oyo State. The study recommends that i. If at all possible, changes should be included into the design and layout to adjust the location to suit different types of personnel.