Questions around the effects of flexibility on productivity are at the forefront of Organizational Development (OD) in 2023, due to “forced flexibility” brought on by COVID-19 and difficulties getting workers to return to traditional office settings. The debate around worker productivity without in-person monitoring, however, began in 1910 when Fredrick Taylor wrote “The Principles of Scientific Management,” a tome dedicated to the art of task work and micromanagement to drive worker productivity (Taylor, 1910). Taylorism was challenged by the publishing in 1949, of the Hawthorne Studies, which showed that paying attention to workers and treating them well positively affected productivity and led to the development of the Human Relations Movement (Roethlisberger & Dickson, 1949). The productivity discussion is really heating up as companies and talent management professionals seek to manage the talent drought brought on by “The Great Resignation,” and company boards grow concerned about future lost productivity due to remote work.
According to the US Bureau of Labor and Statistics, 2019 Job Flexibilities and Work Schedules News Release, approximately 25% of American salaried workers reported working from home occasionally between 2017-2018 (US Bureau of Labor Statistics, 2019). The COVID-19 pandemic forced most knowledge workers home overnight, and after months of self reported productivity increases attributed to reduced commute time, fewer unnecessary meetings, and less co-worker distractions, most American workers want to continue flexible work (Ozimek, 2020). However, the latest Microsoft Work Trend Index Special Report shows that while 87% of workers surveyed in 2021 stated that they felt productive, 85% of leaders had little or no confidence in their workers’ ability to produce in a hybrid environment (Microsoft, 2022). To combat what Microsoft refers to as “productivity paranoia,” this paper will analyze various peer-reviewed academic articles to assess if productivity is affected, positively or negatively by flexible work and to ascertain which factors may improve productivity when working from home (Microsoft, 2022).
Based on personal experience working in Corporate America for the last twenty years in a variety of roles, and currently taking part in several “future ways of working” workstreams, it appears that not only can remote work be productive, but also that there are factors that can positively affect productivity and ways to mitigate the negative effects from working flexibly. These experiences guide the assumption that the benefits of giving employees a choice in when, where, and how they work will far outweigh the potential negatives of flexible work.
Paper Inclusion Criteria
This thesis contains peer-reviewed academic papers that span the forty years between 1981 and 2022. Flexible work has become more common each decade, but the COVID-19 pandemic brought the discussion to the forefront of academia and many of the reviewed studies relate specifically to the COVID-19 era of flexible work. Chapter two, the literature review, makes up the bulk of this paper and seeks to not only define flexible work and productivity, but also to correlate the two variables and seek factors that positively or negatively affect productivity in a flexible work environment. This section contains an analysis of randomized controlled trials, rigorously measured qualitative studies, meta-analyses, and literature reviews.
The discussion section that immediately follows the literature review chapter, is designed to present key conclusions from the data and share the strengths and limitations of the reviewed papers. Strengths and limitations are followed by recommendations for future studies and the conclusion of this review. By the end of this literature review, organizational development professionals should have a clearer understanding of the effects of flexibility on productivity.
Defining Flexible Work
One of the key challenges in reviewing literature related to the topic of flexible work is the number of definitions that currently exist. To start unraveling the meaning of flexibility, it is important to understand that flexible work can refer to both temporal schedule changes, as well as the geographic location where work takes place (Choudhury, 2020). A key feature of most flexible work arrangements is that the employee has some level of autonomy over their hours and/or work location (Kelliher & Anderson, 2010).
Before 2000, flexibility was primarily temporal, and workers participated in “flextime” or “compressed workweeks.” Flextime typically refers to starting work earlier than 9 a.m. and/or leaving work prior to 5 p.m., and compressed workweeks typically include completing forty hours of work in less than the typical 5 days (Baltes et al., 1999). Between 2000 and the COVID 19 pandemic when studies discussed flexibility, they primarily referred to partial work from home (WFH) or working outside of a traditional office setting one or more days per week (Bloom et al., 2015). During the COVID-19 pandemic, many workers were abruptly forced to work remotely, indicated as working from a non-office location full-time (Chang et al., 2021). Post-COVID, we see flexibility defined in both temporal and geographic means as workers continue to seek more autonomy. Today, there are even cases of extreme geographic flexibility, such as the type of work studied by Choudhury et al. (2020), work from anywhere (WFA), which allows workers full autonomy to select the location of their home, irrespective of its proximity to a traditional office setting.
The most studied form of flexibility in recent years is a type of fully remote work referred to as “forced flexibility,” brought on by the rapid, unexpected changes that took place due to government mandates, demanding knowledge workers in many countries stay home during COVID-19 lockdowns (Franken et al., 2022). The time between March 2020 and April 2021, when the first vaccines became available to the public proved to be a ripe opportunity to learn more about productivity and well-being of the knowledge workers who performed job tasks from home. This paper contains many articles that predate the COVID-19 pandemic, because the predominant mode of flexibility in companies today, “hybrid work,” defined as working a mixed schedule of days in the office and days in a home office setting, was more commonly studied prior to March 2020 (Bloom et al., 2015).
Flexible Work Prior to the COVID-19 Pandemic
Before 2000, much of the literature on flexibility refers to “flextime” and “compressed workweeks,” which were purported to be on the rise due to an increase of women in the workplace and the desire to help workers balance family-life, and work commitments (Baltes et al., 1999). A study by MacQuire and Liro (1986) cites that by 1980, 11.9 percent of individuals working nonagricultural jobs worked flexibly. Flextime and compressed workweeks grew in popularity due to the benefits of improving worker engagement, job satisfaction, talent attraction, and even productivity (MacQuire & Liro, 1986; Baltes et al., 1999; Yang & Zheng, 2011). However, to appropriately measure productivity with flextime, an important nuance to understand is the differences between implementation of flextime policies and the actual adoption of those policies (Yang & Zheng, 2011). More information will be provided on productivity and flexible work in a later section of this paper.
Between 2003 and 2015, scholars cite that the percentage of U.S. workers completing at least some of their work from home rose from 19.6% to 42.1% with similar growth rates being reported throughout much of Europe and Great Britain during the same time (Falstead & Henseke, 2017). Noticing this trend, and in response to increasing real estate costs in 2010, China’s largest travel firm, CTrip decided to conduct a detailed study 9-month study on WFH (Bloom et al., 2015). Bloom et al. (2015) suggests many advantages to working from home including: higher retention, better productivity, higher job satisfaction, and a reduction in operating expenses. The WFH cohort not only boosted productivity by 13% versus the control group, but also reduced the per employee per year cost by 2000 dollars (Bloom et al., 2015). The only drawback discussed by Bloom et al. (2015) was that those in the WFH arm of the trial received less promotional opportunities than the individuals reporting into the office. The main rationale for conducting the CTrip experiment was to identify if “nonpecuniary incentives,” meaning non-monetary benefits like WFH could offer companies who were willing to participate a key advantage in attraction and retention of talent (Bloom et al., 2015).
Noting earlier work by Bloom et al. (2015) and hoping to contribute to the body of research on “non-pecuniary” benefits, Choudhury et al. (2020) decided to take studying geographic flexibility one step further by researching “work from anywhere (WFA),” where the worker can choose to live in any geographic location, regardless of proximity to company headquarters. To undertake this study, Choudhury et al. (2020) took a baseline rate of productivity improvement when workers moved from “in office,” to WFH and then measured that against productivity increases in the population transitioning to “work from anywhere” from WFH. Like Bloom et al. (2015), Choudhury et al. (2020) observed improvements in productivity, as well as improvements in retention, while also noting a reduction in real estate costs, but the productivity of the group “working from anywhere,” was 4.4% higher than that of the group “working from home.” The current body of research from pre-COVID times clearly articulates advantages to productivity in offering worker flexibility, regardless of type, and yet corporations exhibited great concern that productivity would decline due to forced flexibility during the COVID-19 lockdowns (Choudhury et al., 2020).
Forced Flexibility During the COVID-19 Pandemic
Most research on flexible work conducted after March 2020 assesses the effects of what Franken et al. (2021) refer to as “forced flexibility,” which was a direct result of global shutdowns in effect to limit the transmission of the COVID-19 virus. During this time, workers who had not elected to work from home previously, and seasoned remote workers alike were remanded to work from home so that essential workers could have safer working environments in traditional office settings (Toscana & Zappala, 2021). With so much of the workforce naive to remote work and managers lacking experience leading in this unfamiliar environment, there was widespread speculation that “forced flexibility,” could have deleterious effects on productivity, as well as employee well-being and work-life balance (Chang et al., 2021; Galanti et al., 2021; George et al., 2022; Howe & Menges, 2022; Newbold et al., 2022; Straus et al., 2022; Toscana & Zappala, 2021).
Never before the COVID-19 shutdowns had there been such widespread remote work and the situation created an unparalleled opportunity to answer age old questions about productivity, well-being, job satisfaction and employee engagement in traditional office based workers (Chang et al., 2021; Galanti et al., 2021; George et al., 2022; Howe & Menges, 2022; Newbold et al., 2022; Straus et al., 2022; Toscana & Zappala, 2021). The research from this period aims to understand which factors, tangible and intangible, can help individuals and leaders assimilate to and succeed in remote work environments post-pandemic (Chang et al., 2021; Galanti et al., 2021; George et al., 2022; Howe & Menges, 2022; Newbold et al., 2022; Straus et al., 2022; Toscana & Zappala, 2021). In the next section, the importance of understanding data from the COVID-19 era of “forced flexibility,” becomes clear, as many modern workers desire to continue working flexibly and organizations are being asked to make decisions on the future of work (Microsoft, 2022).
The Future of Flexible Work/Modern Worker Preferences
The pandemic has begun to recede and yet many questions remain regarding the future of work and how companies will honor flexibility now that the state of emergency is over. While there is still much debate over the benefits and/or detriments of hybrid or fully remote work, the body of evidence points to the fact that workers can be both productive and well when working from home, and that in many cases, workers prefer partial or complete WFH options (Chang et al., 2021; Galanti et al., 2021; George et al., 2022; Howe & Menges, 2022; Newbold et al., 2022; Straus et al., 2022; Toscana & Zappala, 2021). Anecdotal evidence abounds that most employees would like to retain flexibility, and many see the return to a traditional office setting as lack of trust and the removal of autonomy. (Microsoft, 2022).
With that said, working from home long-term affects elements related to productivity and can affect creativity and innovation, as well as meaning, stress, and overall health and wellness (George et al., 2022). Regardless, corporations see remote work as a potential cost containment option and way to attract potential candidates and retain employees (Bloom et al., 2015; Choudhury et al., 2020). The rest of this literature review will be devoted to understanding measures of productivity with relation to the modern workplace and the factors that positively and negatively affect productivity in a flexible work environment (Chang et al., 2021; Galanti et al., 2021; George et al., 2022; Howe & Menges, 2022; Newbold et al., 2022; Straus et al., 2022; Toscana & Zappala, 2021).
According to Ruch (1994), “productivity has been defined as the effectiveness with which workers apply their abilities to complete work within a given time frame” (p. 105-130). To understand the origins of the concept of productivity from an Organizational Psychology perspective, it is important to return to the teachings of Taylor (1910) in his “Principles of Scientific Management. Taylor (1910) asserts that to get the most out of workers, tasks need to be identified and measured down to the minute, individuals need to be carefully chosen then skillfully trained, treated amicably throughout their work, and then assisted by their management team. While micromanagement can lead to increased productivity in a factory setting for a brief period, it is not sustainable or effective for longer durations or in relation to knowledge work.
Taylorism gave way to the “Human Relations Movement,” which was brought about by the Hawthorne Illumination studies (Roethlisberger & Dickson, 1949). The “Hawthorne Effect,” was named from the results of numerous studies conducted at Western Electric Company that were designed to see if worker productivity would improve if working conditions were better, first from a lighting perspective and then from a treatment perspective (Roethlisberger & Dickson, 1949). Observations showed that as workers were treated better or received attention, their attitudes towards the work they were doing improved, which led to increased performance (Roethlisberger & Dickson, 1949). These studies are important works to consider when postulating a theory around why productivity often increases as flexibility increases.
In the case of measuring productivity in knowledge workers, this variable becomes much more difficult to assess and compare. There were two main measures of productivity in this body of research, which were “causal productivity,” (Kim & Campagna, 1981; Bloom et al., 2015; Choudhury et al., 2020) and the more subjective, “employee perceived productivity” (Chang et al., 2021; Chu et al., 2022; Galanti et al., 2021; Howe & Menges, 2021; Staus et al., 2022; Toscana & Zappala, 2021). While causal productivity is a gold standard, and employee perceived productivity is rampant, there are also a couple of literature reviews and meta-analyses discussed in this paper that contained valuable information about the effects of flexible work on productivity
Only three studies in the entire body of peer-reviewed literature can show a causal relationship between flexible work and productivity (Bloom et al., 2015; Choudhury et al., 2020; Kim & Campagna 1981), and these studies all contained workers who delivered very measurable products and services. Choudhury et al. (2020), studied a group of US Patent and Trade Office workers, and productivity was measured through comparing the output and rework of individuals working from anywhere vs. those working from home. In the case of Bloom et al. (2015), productivity was similarly easy to measure as the minutes and performance scores of call takers were logged daily by CTrip, a Chinese travel company that had a preset formula for understanding worker productivity. Kim and Campagna (1981) only studied temporal flexibility and productivity. Their study was conducted on multiple work groups with diverse performance measures, so to mitigate bias, a variable for productivity had to be created to account for these differences (Kim & Campagna, 1981). In comparing the three studies Choudhury et al. (2020) and Bloom et al. (2015) are most relevant to productivity assumptions when considering modern work styles.
Productivity becomes much more difficult to measure in digital or knowledge workers, because outcomes are often subjective measures and tend to differ by worker type and job function. The predominant measure of productivity in this body of research was employee perceived productivity (Chang et al., 2021; Chu et al., 2022; Galanti et al., 2021; Howe & Menges, 2021; Staus et al., 2022; Toscana & Zappala, 2021), and productivity was frequently reported as improved in flexible work environments. Several meta-analyses were also analyzed and used employee-perceived productivity as their primary measurement (Baltes et al., 1999; Martin & MacDonnell, 2012). Dunham et al. (1987) astutely points out that there is potential “Hawthorne Effect,” to productivity when giving workers autonomy to choose their schedule and/or work location. In other words, just by calling attention to worker schedules and providing for preferences to be met, there could be a placebo effect to the increase in productivity which makes data less reliable.
In addition to “causal productivity” and “employee perceived productivity,” a couple of researchers had more unique takes on how to measure productivity. Vega et al. (2015), evaluated what was referred to as “creative productivity,” which focused more on the amount and types of ideas that were generated, hypothesizing that working from home in one’s own space may provide fertile ground for creation. In the end, however, they still used employee-perceived productivity as a primary measure. Cesário and Chambal (2017) measured worker productivity through a self-reported previous year performance rating, which though stronger than “employee-perceived productivity,” is still subjective. Kotey and Sharma (2018) measured productivity from a strict financial perspective, looking at “return on labor “(ROL) and “time in lieu of overtime” (TOIL), and concluded that job satisfaction and reduction in turnover were critical components to improving a firm’s financial performance, which places immense value on creating and sustaining a satisfied flexible workforce.
While there can be extreme variances in how different companies, and even business units within the same company, view and measure productivity, there appears to be some consensus in the factors that affect productivity in flexible work environments, Proper resourcing, training, job satisfaction, autonomy, engagement, creativity, well-being, and mindset are just some of the factors that have been identified to affect worker productivity in flexible environments. The next section will focus on factors that both negatively and positively affect productivity in flexible work environments.
Flexible work and Productivity
The discussion around flexible work arrangements (FWAs) and productivity has been ongoing since the mid-1900s and has increased naturally with the rise of technology intersecting with our work. Despite multiple studies on this topic, there are very few that can causally attribute flexible work arrangements to increased productivity (Bloom et al., 2015; Choudhury et al., 2020; Kim & Campagna 1981). Regardless, companies have been progressing towards offering more flexibility for a variety of reasons including the cost of real estate, “forced flexibility” during the COVID-19 pandemic, and for talent retention and attraction purposes. Under these circumstances it makes sense to take a deep dive into the factors that affect productivity in FWAs, because as Kotey and Sharma (2018) discovered, not all FWAs are financially advantageous to employers, and the responsibility to make them successful often lies with employer practices.
Factors that Negatively Affect Productivity
While most scholars in this body of research have concluded that flexibility can enhance productivity, there are several factors that need to be mitigated to make these arrangements successful (Bloom et al., 2015; Choudhury et al., 2020; Kim & Campagna 1981). The good news is that there are a lot of factors that have been uncovered to help mitigate the negative effects that can come from remote work. While it may seem natural to assume that distractions at home such as pets or children, participating in non-work-related activities during working hours, and lack of private physical workspaces would be deleterious to productivity, studies found that “personal resource challenges,” for instance skills, knowledge, values, and beliefs, were primarily responsible for negative effects on performance (Hobfoll, 2018). Many of the reviewed researchers (Chang et al., 2021; Toscana & Zappala, 2021; Franken et.al, 2021) draw on the “principles of the Conservation of Resources Theory (COR)” (Hobfoll et al., 2018) to assert that an individual has core values or “personal resources” that develop over time. They postulate that the stronger one’s personal resources and/or resilience were before a change or event, the harder they will be to diminish and vice versa (Hobfoll et al., 2018).
Fixed Mindset. Emotional resourcing is the most prominently featured predictor of when flexible work can negatively affect productivity (Galanti et al., 2021; George et al., 2022; Howe & Menges, 2022). Howe and Menges (2022) cite a “fixed mindset,” towards remote or flexible work to be detrimental to worker productivity. By having a fixed mindset towards remote work, they are describing individuals who have a pre-determined belief that they cannot be effective while working remotely (Howe & Menges, 2022). In their study, those workers who had a “growth mindset,” meaning that they could learn to remote work productively, were much more productive in newer work arrangements than their colleagues who had a “fixed mindset” (Howe & Menges, 2022). During the COVID-19 pandemic when many knowledge workers were forced home, this concept of mindset was less relevant as there was no choice of work style, but now that the pandemic is receding, employers could potentially assess the mindsets of their workforce to ascertain which workers will do better with FWAs.
Social Isolation. Another emotional resource that had a negative effect on productivity, especially during the COVID-19 pandemic was social isolation (Galanti et al., 2021). Galanti et al. (2021) use the “Job Demands-Resources Model (JD-R)” (Bakkar & Demerouti, 2017) to assess factors that affect productivity in FWAs and found that social isolation had a significant negative effect on work stress, which in turn leads to decreased productivity. Their research suggests that the negative effects of social isolation on productivity can be mitigated through more frequent contact with colleagues and supervisors and more regular touchpoints with human resources (Galanti et al., 2021). They also assert that mixing in some face-to-face interactions can help reduce feelings of isolation (Galanti et al., 2021).
Loss of Meaning. When individuals work exclusively from home and have little contact with their companies and/or colleagues it has been posited that over time, the “sense of meaning” they find in their work can be diminished, which can lead to disengagement and reduced productivity (George et al., 2022). To mitigate the loss of meaning, George et al. (2022) suggest that corporations clearly and frequently communicate their missions to rally support and improve productivity. Like Galanti et al. (2021), George et al. (2022) recommends face-to-face interaction as well as worker engagement with community, such as volunteering, to mitigate the loss of meaning.
While fixed mindset, social isolation, and loss of meaning should be considered as potential negatives to remote or flexible working, there are several ways to preemptively train or communicate with employees that will help create more a more positive work experience. If, however, modern managers continue to fear flexible work, and do not learn to embrace the potential benefits of hybrid arrangements, there is the potential for their fixed negative mindsets to become a self-fulfilling prophecy (Howe & Menges, 2022). The next section provides details into the factors that positively affect productivity in flexible work environments and substantiates the arguments for flexible working.
Factors that Positively Affect Productivity
There are many factors that positively affect productivity in remote or flexible work arrangements and as captured above, most negative factors can be mitigated with assessment and planning. The research reviewed focuses on personal or emotional resources related to improved productivity (Hobfoll et al., 2018). Additionally, there are physical factors that can enhance employee well-being and consequently productivity. For instance, erecting physical and personal boundaries between work and home life can help reduce “family-work conflict,” and teaching workers how to develop the aforementioned skills can limit distractions and increase productivity (Galanti et al., 2021). Similarly, providing workers with proper technology and hardware assets can also assist in setting remote workers up for success, but for the remainder of this section the focus will be on non-tangible factors (Chu et al., 2022).
Proactive Coping Skills. As mentioned in the previous section, conservation of resources theory (COR) (Hobfoll et al., 2018) is frequently cited as influencing productivity by multiple sources. Chang et al. (2021) utilized COR to underscore the importance of “proactive
coping” and “future time orientation,” in the productivity of remote workers during the COVID 19 pandemic. Proactive coping skills, otherwise known as resilience, were mentioned in several studies as positively affecting productivity in a flexible work environment regardless of crisis or normalcy (Chang et al., 2021; Toscana & Zappala, 2021; Franken et.al, 2021; Galanti et al., 2021). Individuals with strong proactive coping skills are often better planners, who have strong prioritization and workload management abilities, and have tools to help manage stress (Chang et al., 2021). Toscana and Zappala (2021) suggest that through having more of these personal resources to start, individuals are more likely to be engaged which positively influences productivity.
Future Time Orientation. Chang et al. (2021) also shows the correlation between a worker’s “future time orientation” and their ability to be productive in FWAs during the COVID 19 pandemic, and these results can be extrapolated to less stressful times. Future time orientation regards an individual’s ability to think about their place in the future and is based on research of “future time perspective (FTP)” (Kooji et al., 2018). The meta-analysis by Kooji et al. (2018) shows that individuals with higher FTP tend to have higher achievement drive and greater ability to visualize the effects of current work on their future performance and status. The same seems to hold true for individuals moving to flexible work during the pandemic because the ability to see beyond the immediate crisis allowed for individuals with strong future time orientation to continue performing at elevated levels to achieve future goals, therefore increasing productivity (Chang et al., 2021).
Remote Work Engagement. A third factor positively influencing productivity in FWAs was high “remote work engagement” which, according to Toscana and Zappala (2021), is mediated by a positive perception of performance and self-efficacy. In other words, those individuals who believe that they are strong, capable performers, will feel more engaged, regardless of work location, and because of that strong self-belief will be more productive (Toscana & Zappala, 2021). To support their conclusions around remote work engagement and productivity, Toscana and Zappala (2021) again reference the conservation of resources theory (Hobfoll, 2018), and “Corollary 3: the resources gain spiral,” which suggests that positive perception of past performance begets positive perception of future performance, thereby driving engagement and productivity. Galanti et al. (2021) references a similar phenomenon but does so in relation to the effects of children in the household on remote worker productivity, concluding that those individuals with higher past engagement and performance are more likely to continue exhibiting those behaviors, even as children may be in the house during work hours.
Employee Well-Being. The fourth factor in this body of research to promote productivity in a remote work environment is strong employee well-being, often linked to an ability to align life and work priorities (Chu et al., 2022). Chu et al. (2022) found that when employees could balance their work and life in FWAs, it created overall happiness and a sense of well-being which then translated into increased productivity. Similarly, Wahab and Tatoglu (2018) in studying the effects of chasing productivity on worker well-being, found that allowing for FWAs improved well-being and as a result firm productivity was improved. To further the argument for the positive effects of well-being and work-life balance to productivity with relation to FWAs, is the disproven hypothesis by Chu et al. (2022) that postulates that non-work related activities would negatively impact productivity. Not only was that theory proven false, but there is also robust evidence that many highly productive individuals may perform better when given the ability to perform unrelated activities during their workday (Chu et al., 2022).
Autonomy and Motivation. The final, and most critical factor responsible for enhancing productivity in FWAs relates to the motivation and loyalty that come with giving employees the flexibility to choose when, where and how they work (Choudhury et al., 2020). Bloom et al. (2015) did show increases in job satisfaction, employee retention, and overall productivity when some employees were asked to work from home as part of the CTrip experiment, but productivity increased even further when the firm’s workers were given the choice to work from home. Choudhury et al. (2020) further proves the significance of choice in ways of working, in the 4.4% increase to productivity on top of the increase seen in the “work from home population,” that was achieved when employees in the US Patent and Trade Office were given the ability to work from anywhere. To further the case for choice as a factor that improves productivity in remote work environments, Kelliher and Anderson (2010) found that even though work often intensified for individuals in FWAs, productivity and job satisfaction were still higher and posited that social exchange theory (Molm et al., 1999) was responsible for this outcome. It is believed that workers’ gratitude for the autonomy granted by flexible work arrangements leads to a “reciprocal exchange,” (Molm et al., 1999) whereby the individual is happy to be more productive, regardless of overwork, out of abundance of loyalty for being given choice (Kelliher & Anderson, 2010).
In a recent publication by the career site, Monster, up to 2 thirds of employees claim they would leave their current employer if forced to return to the office full-time (Shumway, 2022), which is a clear indication that some form of flexibility is likely to stay viable for many modern workers. We also know from several studies that there is a causal relationship between flexible work and increased productivity (Bloom et al., 2015, Choudhury et al., 2020). It is therefore critical that employers get good at flexible working, and factors like proactive coping skills, future time orientation, remote work engagement, employee well-being, autonomy and motivation will help improve productivity. To properly evaluate the data shared in the literature review section, it is important to consider the strengths and limitations of the studies.
Strengths and Limitations
Due to limited peer-reviewed research on this topic, the literature review draws on a body of research that spans from 1981 all the way through 2022. Identifying the factors that affect productivity in flexible work arrangements is particularly difficult because there are so many types of flexible work and so many factors that can increase or decrease productivity. There are very few studies in this body of research that are direct comparators. With that said, there are many strengths in this analysis, also significant limitations in the myriad of studies that were reviewed.
There are some clear strengths to this analysis. To begin, the research takes place over a forty-year period and most of the studies come to the same conclusion, that by paying attention to personal and physical resources, flexibility in work arrangements is positively correlated with increased productivity. In addition, many of the studies aligned on the fact that conservation of resources theory was a factor that affects remote work environments (Hobfall, 2018). Most authors also concluded that flexibility enhanced job satisfaction, employee engagement, and well-being. In addition to proven hypotheses, these studies take place amongst diverse types of workers and in many different geographic locations, and regardless of these aforementioned factors, productivity still improved with flexible work. There are also several randomized controlled trials (Bloom et al., 2015; Choudhury et al., 2020), strong meta-analyses, and a fair amount of statistical rigor in most of the studies reviewed.
Despite the many strengths in the analyzed studies, there are also severe limitations, related to the distinct types and sizes of populations reviewed. Many of the study populations taken by themselves are quite small, and those populations typically do only one type of work, so it is exceedingly difficult to extrapolate findings to other unrelated types of work. Some of the studies lacked gender balance (Wahab & Tatoglu, 2020), while others contained populations that were ethnically homogenous (Leslie et al., 2012) which makes extrapolation to different genders and ethnicities complicated. Additionally, culture norms vary with relation to flexible work, and the studies that only explore workers in one geographic location make it difficult to draw conclusions about workers in another country, let alone region. The most statistically rigorous studies were performed within one organization (Bloom et al., 2015; Choudhury et al., 2020) which provides excellent control, but also limits direct parallels being drawn to other organizations.
The most frequently cited measure of productivity was employee-perceived productivity, which is difficult to rely (Chang et al., 2021; Chu et al., 2022; Galanti et al., 2021; Howe & Menges, 2021; Staus et al., 2022; Toscana & Zappala, 2021). Two of the studies were literature reviews that lacked scientific rigor and spoke specifically to factors that can be used to improve productivity in FWAs, but with limited proof points (Contreras et al., 2020; Lopez-Leon, et al., 2020). Another factor that makes deductions difficult is related to the timing in which the studies were conducted. Several of the articles are quite old and therefore maybe less relevant to modern work arrangements (Kim & Campagna, 1981; MacQuire & Liro, 1986; Baltes et al.,1999). In addition to older studies, there was a large body of research captured during a global pandemic. The COVID-19 pandemic was a once in a lifetime occurrence, during which humans were under extreme duress, irrespective of where and when they worked. It is hard to know how much increased productivity was due strictly to flexibility and autonomy as opposed to fear of the virus and a desire to stay home where it was safer (Galanti et al., 2021).
This body of research’s strength outweighs the weakness and can impact how organizations design the future of work for their employees. The next chapter contains a discussion of the findings, implications from the research, and recommendations for future studies.
The research included is a robust collection of peer-reviewed journal articles that span forty years of organizational observation looking at the movement from fixed work environments to modern flexible work arrangements. The analyzed studies range from the gold standard randomized controlled trials to literature reviews of previous papers on flexibility and productivity. In addition, to providing a comprehensive set of factors that will enhance productivity in today’s more flexible working arrangements, this paper sets forth an understanding that giving humans choice about how, when, and where they work seems to improve productivity. This section encapsulates the completed research, discusses its relevance to Organizational Psychology, and makes recommendations for future studies in flexible work and productivity.
Applications to Organizational Psychology
This literature review contributes to the discussion around the positive effects on productivity associated with increasing the autonomy, engagement, and well-being of the modern knowledge worker. The productivity discussion may have begun with Taylorism in the factory setting, but the Hawthorne studies, which spawned the Human Relations Movement (Roethlisberger & Dickson 1939), proved that happier, healthier workers, were also more productive workers. The COVID-19 pandemic brought temporary forced flexibility into play, but now that the pandemic has receded, worker preferences towards remote work are here to stay. With increased worker autonomy comes managerial anxiety related to measuring productivity. In fact, in the latest Microsoft Work Trend Index Special Report over 85% of leaders report that they do not have faith that their workers are being productive, while working remotely (Microsoft, 2022). This paper dispels the myth that workers cannot be productive when working remotely, and in fact, positions flexible work as a “non-pecuniary benefit” that not only increases worker autonomy, engagement, and well-being, but as a result has the potential to enhance productivity (Choudhury et al. 2020).
This literature review confirms that under the right circumstances, flexible work can work quite well. In randomized controlled trials both Bloom et al. (2015) and Choudhury et al. (2020) prove their hypotheses that working from home improves productivity and reduces costs. Both of which are critical reasons for leaders and talent management professionals alike to consider permanently flexible solutions. In Bloom et al. (2015) the work from home group showed a 13% increase in productivity in comparison to the control group, job attrition rates fell by 50%, and CTrip saved an average of 2000 dollars per employee per year from a cost perspective. Choudhury et al. (2020) allowed for even greater flexibility in their study of US Patent and Trade Officers, allowing them to work from anywhere, which further improved productivity by 4.4% over working from home and afforded the USPTO a 2.75-million-dollar yearly cost reduction.
In addition, this paper points to flexible work as a non-pecuniary benefit that may provide a powerful weapon in an organization’s arsenal to attract and retain top talent (Bloom et al., 2015; Choudhury et al., 2020). When the temporary flexibility afforded to knowledge workers during the COVID-19 pandemic was rescinded, it was quickly followed by what Anthony Klotz coined as “The Great Resignation,” where burned out workers left companies in droves, leaving a massive talent drought in their wake. Retention and attraction are top of mind for most human resources teams globally, and having to rely on an increasingly small pool of workers in high demand markets just makes the situation worse. Understanding that flexible work improves productivity and the factors that lead to high performance can improve manager confidence with relation to flexible work, allowing talent managers to cast a wider net from a geographic perspective, as well as provide a much-needed carrot to attract top talent.
Considering the potential for improved productivity and reduced costs, this paper also provides a roadmap for organizations wishing to successfully institute flexible work arrangements. To start, offering employee choice over work situation was a factor that increased engagement and productivity in several of the studies covered. While not all companies or types of work lend themselves to remote or hybrid opportunities, they can and should still offer worker choice in the period or schedule they wish to work. For those situations that enable remote work, understanding a person’s mindset, future-time orientation, and former productivity can be indicative of their fit for more flexible assignments (Chang et al., 2021). In addition, providing workers with personal and physical resources to help them set up boundaries in a home office setting, will help increase the likelihood that they will be productive, while remote (Chu et al., 2022). Based on this body of literature, it would also be wise to increase communications both digitally and face to face with co-workers and leaders to help avoid social isolation and loss of meaning (Galanti et al., 2021). The aforementioned practices can be used to ensure maximum productivity in FWAs. Despite the growing body of evidence that flexible work arrangements can be both productive and cost-effective, more work needs to be done in the field.
Recommendations for Future Studies
Most of the studies that were reviewed came from the pre-pandemic era or from during the COVID-19 pandemic. Since the trend since the pandemic has been more workers continuing in remote settings, it would make sense to continue studying productivity in fully remote, hybrid, and other flexible work settings now and in the future. Hybrid work has become widespread since the pandemic, with many companies electing to have workers return to the office one to three days a week, while working the remaining days from home. When drafting this paper, there were no productivity studies in hybrid work settings. It would be interesting to study hybrid work against fully remote work to see which offering most improved well-being, engagement, and productivity. It would also be interesting to see if the results from Choudhury et al. (2020), looking at working from anywhere, could be replicated in different work settings.
Productivity measurement methods should be a major area of focus for the field of Organizational Psychology. Most of the workers who can perform their jobs remotely are knowledge workers, and the current means of measuring performance are lacking. Most studies in this literature review used subjective employee-perceived productivity, and it would be fascinating to see if there are better ways to measure productivity of knowledge workers. Studies could be conducted looking at employee productivity against key performance indicators (KPIs), though they would need to be conducted at the business unit or function level because KPIs tend to vary between groups.
Flexible work can be a productive, cost-effective non-pecuniary benefit and can lead to increased well-being, employee engagement, job satisfaction, and retention (Bloom et al., 2015). Factors like “future time orientation,” “proactive coping,” abilities (Chang et al., 2021), strong self-efficacy, growth mindset (Toscana & Zappala, 2021), and good well-being practices (Chu et al., 2022) enhance productivity in FWAs. The most critical factor responsible for enhancing productivity in FWAs relates to the motivation and loyalty that come with giving employees the flexibility to choose when, where and how they work (Choudhury et al., 2020). Organizations considering FWAs should increase communications both digitally and face to face with co workers and leaders to help avoid social isolation and loss of meaning (Galanti et al., 2021). Future studies should explore hybrid work against fully remote work to see which offering most improved well-being, engagement, and productivity. It would also be interesting to see if the results from Choudhury et al. (2020) on working from anywhere would be replicated in other organizations.