The relationship between flexible employment arrangements and workplace performance in Great Britain

There is an increasing concern on the quality of jobs and productivity witnessed in the flexible employment arrangements. The purpose of this paper is to examine the relationship between various flexible employment arrangements and the workplace performance.

Home-based working, teleworking, flexible timing and compressed hours are the main employment types examined using the Workplace Employee Relations Survey (WERS) over the years 2004 and 2011 in Great Britain. The workplace performance is measured by two outcomes – the financial performance and labour productivity. First, the determinants of these flexible employment types are explored. Second, the ordinary least squares (OLS) method is followed. Third, an instrumental variable (IV) approach is applied to account for plausible endogeneity and to estimate the causal effects of flexible employment types on firm performance.

The findings show a significant and positive relationship between the flexible employment arrangements and the workplace performance. Education, age, wage, quality of relations between managers-employees, years of experience, the area of the market the workplace is operated and the competition are significant factors and are positively associated with the propensity of the implementation of flexible employment arrangements.

The insights derived from the study can have various profound policy implications for employees, employers and the society overall, including family-work balance, coping with family demands, improving the firm performance, reducing traffic congestion and stress among others.

It is the first study that explores the relationship between flexible employment types and workplace performance using an IV approach. This allows us to estimate the causal effects of flexible employment types and the possible associated social implications.