Unlocking flexible working arrangements and employee productivity: the mediating interplay of work-life balance and job satisfaction

Purpose This study aims to examine the effect of flexible working arrangements (FWAs) on employee productivity (EP) and to investigate the mediating roles of work-life balance (WLB) and job satisfaction (JS). While FWAs encompass a wide range of practices implemented differently across organisations, resulting in measurement and comparison challenging. To address inconsistencies in past research, the study introduces a generalise framework categorising FWAs into three core dimensions, which are (1) flexible time, (2) flexible place and (3) flexible workload. Design/methodology/approach Grounded in self-determination theory, the study explains how the fulfilment of psychological needs may enhance employees' WLB and JS, thereby improving productivity. We developed new measurement items for FWAs, WLB, and JS and validated using exploratory and confirmatory factor analyses. We analysed our result utilising a dual-level analytical approach to examine both first-order effects (individual FWA dimensions) and second-order effects (overall FWAs) on EP. Findings The findings demonstrate that flexible work arrangements substantially enhance EP, both directly and indirectly. WLB and JS serve as essential mediators, illustrating that FWAs are most effective when they satisfy employees' demands for autonomy, competence and relatedness. The study's dual-level findings offer a thorough comprehension of the interaction among several FWA dimensions and their impact on productivity. Research limitations/implications Despite its significant contributions, this study acknowledges limitations that should be considered when interpreting the findings. As the research employed a cross-sectional design, it captured employee perceptions at a single point in time. While useful for identifying relationships, this approach limits the ability to infer causality or track how the impact of FWAs evolves over time. A longitudinal design would provide deeper insights into the enduring effects of FWAs on EP. Besides, although the study introduced a refined three-dimensional FWA framework, it did not examine potential moderating variables, such as organisational commitment, employee engagement, leadership style or psychological well-being, which may strengthen or weaken the relationships observed. Practical implications The newly generalised FWA framework and validated measurement items offer organisations clear guidance for designing and evaluating FWA policies. Employers can use these insights to develop evidence-based strategies that enhance well-being, JS and productivity simultaneously. Originality/value This study addresses fragmentation in FWA research by offering a simplified and more generalised framework, along with the introduction of new measuring items that were evaluated by stringent scientific methods. Hence, the study enhances theoretical advancement, fortifies methodological accuracy and offers practical insights to organisations aiming to maximise flexible work arrangements.