Evaluating the impact of flexible working arrangements on employee satisfaction, motivation, and performance

Abstract

This study investigated how the implementation of flexible working arrangements (FWA) may be beneficial in improving an employee’s performance. It was hypothesised that flexible working arrangements should improve an employee’s work-life balance (WLB), and thereby, their level of satisfaction and motivation, and consequently, performance. Comparative analyses were also conducted to determine how various categories impact these relationships. These categories are age, gender, if the individual has or has not made use of flexible working arrangements at some point in time, and the breaking down/subdividing Flexible Working Arrangements into Flexible Working Hours (FWH) and Flexible Working Locations (FWL) so as to test their effects separately. This study utilised a survey questionnaire, which was sent out on various social media platforms for the data collection. 153 complete responses were received from professionals across diverse industries, gender, and age categories. The analysis was done using the Partial Least Squares Structural Equation Modeling (PLS-SEM) technique with SmartPLS 3. The main findings were that employee Motivation had a positive direct impact on Performance, employee Satisfaction had a positive direct impact on Motivation, while employee Satisfaction only had an indirect positive impact on employee Performance. The study also found that the relationships between Flexible Working Arrangements and employee Satisfaction, and between Flexible Working Arrangements and employee Motivation were not statistically significant. With regards to the comparative analyses, within each category, Motivation had a positive direct impact on Performance and Satisfaction had a positive direct impact on Motivation, furthermore, Satisfaction had a direct negative impact on Performance in the 30 and Under group, and Satisfaction had an indirect positive impact on Performance in the groups 31 and Over, Female, Yes Has Made Use of Flexible Working Arrangements, and the subdivision of Flexible Working Arrangements into Flexible Working Hours and Flexible Working Locations. The relationships between Flexible Working Arrangements and Satisfaction and between Flexible Working Arrangements and Motivation were not significant. The findings of this study may guide companies in their decision to implement flexible working arrangements. It also places more premium on the role of motivation and satisfaction, rather than the type of working arrangement adopted, on the employee’s performance.