CHAPTER 1 

Introduction 

Purpose 

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). 

Thesis Statement 

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.

Literature Review 

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). 

Productivity 

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. 

Discussion 

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.  

Conclusion 

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.

Author(s)

  • Kacy Fleming

    Head of Global Well-Being

    Kacy Fleming is a passionate advocate and believer that well-being and joy are cornerstones to a fulfilling career. Kacy is a TEDx Speaker, an award-winning well-being strategist, a frequent contributor to Thrive Global, and an M.A (masters) in Organizational Psychology. She is focused on empowering life-work alignment and creating equitable access to well-being resources and programming. Most recently Kacy has authored pieces on mid-life career transitions, women’s health, as well as a series on flexible work. In October she shared her thesis on “Factors that Affect Productivity in Flexible Work Environments,” at the New England Psychological Association Annual Conference. She is also a Certified Life Coach and Vinyasa yoga teacher. When she is not working, Kacy is an avid fiction reader, a downhill skier, and a seasoned yogi who enjoys watching mysteries with her partner Mark and dogs Otto and Finn.