Dissertation – Flexible Work Arrangements, Employee Wellbeing and Productivity

Abstract

Flexible work arrangements have become a defining feature of Australian knowledge work, yet their consequences for employee wellbeing and productivity remain contested. Drawing on the job demands-resources model and boundary theory, this dissertation examines how flexible arrangements shape wellbeing and self-rated productivity, and the mechanisms that explain these relationships. An explanatory sequential mixed methods design combined a survey of 420 Australian knowledge workers with 18 follow-up interviews. Quantitative results indicated that hybrid workers reported the highest wellbeing and productivity, whereas fully remote workers reported the greatest autonomy but the lowest psychological detachment and the longest additional working hours. Qualitative findings identified autonomy, boundary management and manager trust as central mechanisms, alongside a clear risk of work intensification. The study concludes that flexibility benefits wellbeing and productivity mainly when it is paired with genuine autonomy and supported boundary management, rather than flexibility of location alone. Implications for Australian employers and regulators are discussed.

Introduction

Flexible work arrangements have moved from the margins to the mainstream of Australian working life. Australian Bureau of Statistics data show that a substantial and durable share of employed people now regularly work from home, concentrated among professional, managerial and clerical occupations (Australian Bureau of Statistics [ABS], 2023). The legal scaffolding has broadened in parallel: the right to request flexible working arrangements under the Fair Work Act 2009 (Cth) has been strengthened, and a new right to disconnect has extended employees’ capacity to limit availability. What began as an emergency pandemic response has become a standing expectation, so the question for organisations is no longer whether to offer flexibility but how to design it well.

The evidence base has not kept pace with that expectation. Modelling by the Productivity Commission (2021) suggested that working from home could lift measured productivity for many roles, while cautioning that the effect depends on task type, management practice and the balance of remote and office time. The wellbeing picture is similarly unsettled. The introduction of a model code of practice on managing psychosocial hazards has made employers responsible for foreseeable risks such as isolation, low support and availability creep in distributed work (Safe Work Australia, 2022), at a time when psychological distress remains a significant contributor to Australia’s burden of disease (Australian Institute of Health and Welfare [AIHW], 2022). Underlying these tensions is a paradox: the same autonomy that makes flexible work attractive can encourage employees to work longer and detach less.

This dissertation addresses that paradox in the Australian knowledge-work setting. It examines how flexible arrangements relate to wellbeing and productivity, and the mechanisms and conditions that shape those relationships. Three research questions guided the study:

1. How do wellbeing and self-rated productivity differ across office-based, hybrid and fully remote arrangements among Australian knowledge workers?
2. Through which mechanisms do flexible arrangements influence wellbeing and productivity?
3. Which organisational conditions strengthen or weaken these relationships?

Literature Review

Flexibility as a job resource: the JD-R model

The job demands-resources (JD-R) model provides the organising framework for this study. It proposes that job resources such as autonomy, support and feedback initiate a motivational pathway that sustains engagement and wellbeing, while job demands such as workload and role ambiguity initiate a health-impairment pathway that culminates in strain (Bakker & Demerouti, 2017). Flexible arrangements are usually theorised as a resource because they grant control over the timing and location of work. The model also cautions, however, that a resource can become a demand when it is poorly bounded, which is precisely the risk that distributed work carries. Productivity gains reported in Australian modelling are consistent with the motivational pathway, but they are conditional rather than automatic (Productivity Commission, 2021).

Boundary theory and boundary management

Where the JD-R model explains outcomes, boundary theory explains process. Individuals manage the frontier between work and home along a continuum from segmentation, in which the two domains are kept sharply separate, to integration, in which they interpenetrate (Ashforth et al., 2000). Flexible arrangements dissolve the physical and temporal cues that once policed this frontier, so the work of boundary management shifts from the environment to the individual. Kossek and Lautsch (2018) argue that the benefits of flexibility accrue unevenly, depending on whether workers can exercise genuine boundary control rather than simply relocating an intensified job into the home. Boundary management style therefore becomes a candidate mechanism linking arrangement type to wellbeing.

Remote and hybrid evidence and the flexibility paradox

Meta-analytic evidence indicates that telework is, on balance, mildly beneficial for job satisfaction and perceived autonomy, with autonomy mediating those effects, though high-intensity remote work can heighten work-to-family conflict and weaken professional relationships (Gajendran & Harrison, 2007). More recent commentary converges on a hybrid advantage, in which a mix of remote and office days outperforms either extreme. The countervailing risk is the autonomy paradox: gaining control over connectivity, many knowledge professionals extend their availability and work more, so autonomy quietly produces intensification (Mazmanian et al., 2013). Two gaps follow. The mechanisms connecting arrangement type to wellbeing and productivity are asserted more often than tested together, and little of the evidence is grounded in the Australian context. This study addresses both through a mixed methods design.

Methodology

Research design

An explanatory sequential mixed methods design was adopted (Creswell & Plano Clark, 2018). The quantitative phase established how wellbeing and productivity differ across arrangement types and which variables predict them; the qualitative phase explained those patterns from participants’ perspectives. Integration occurred at two points: purposive selection of interviewees from survey respondents, and a joint display comparing statistical predictors with interview themes. Figure 1 illustrates the design.

Participants and procedure

Phase 1 comprised 420 Australian knowledge workers recruited through an accredited online research panel. Eligibility required full-time or substantial part-time employment in a role that could be performed remotely at least some of the time, across professional services, finance, information technology, government and higher education. Respondents were grouped by their usual arrangement into office-based (n = 138), hybrid, defined as two to three remote days each week (n = 201), and fully remote (n = 81). Of the sample, 54% identified as women, the mean age was 39.6 years (SD = 9.8), and 68% held a bachelor degree or higher. Phase 2 involved a maximum-variation subsample of 18 respondents selected to span arrangement type, sector, caregiving responsibility and seniority.

Measures and analysis

Wellbeing was measured with the five-item WHO-5 Wellbeing Index, scored 0 to 100, a brief instrument with strong validation evidence (Topp et al., 2015). Self-rated productivity used a seven-point work-output scale benchmarked against the respondent’s typical performance. Job autonomy was assessed with the autonomy subscale of the Work Design Questionnaire on a seven-point scale, and psychological detachment, the sense of being mentally free from work during non-work time, was measured with the relevant subscale of the Recovery Experience Questionnaire on a five-point scale (Sonnentag & Fritz, 2007). Cronbach’s alpha ranged from .82 to .91 across the multi-item scales. Respondents also reported hours worked beyond their contracted load. Quantitative analysis comprised descriptive statistics, one-way analysis of variance across arrangement types, Pearson correlations and hierarchical regression. Interviews of 45 to 60 minutes were conducted by videoconference and analysed using reflexive thematic analysis (Braun & Clarke, 2021).

Ethical considerations

The study was approved by the administering university’s Human Research Ethics Committee, and procedures complied with the National Statement on Ethical Conduct in Human Research (National Health and Medical Research Council [NHMRC], 2023). Participation was voluntary with written informed consent, data were de-identified at the point of collection, and interview participants received pseudonyms. Because some seniority and sector combinations are potentially identifying, quotations are reported without organisational detail.

Findings

Phase 1: Survey results

Table 1 presents the key measures by arrangement type. Wellbeing followed an inverted pattern in which hybrid workers scored highest (68.9), office-based workers lowest (58.4) and fully remote workers in between (64.1). The difference across arrangements was statistically significant, F(2, 417) = 12.6, p < .001. The gap between hybrid and office-based workers illustrates the practical size of the effect. Using a pooled standard deviation, the standardised difference is

d = (68.9 – 58.4) / 17.3 = 10.5 / 17.3 = 0.61,

a moderate effect by conventional benchmarks. Self-rated productivity showed the same ranking, with hybrid workers highest (5.6) and office-based workers lowest (4.9). Fully remote workers reported the greatest autonomy (5.8) yet the lowest psychological detachment (2.7) and the longest additional hours (5.2 per week). The intensification implied by that last figure is considerable: relative to office-based workers, fully remote workers logged an extra 5.2 minus 2.1, or 3.1 hours each week, which across a 46-week working year amounts to roughly 143 additional hours.

Table 1: Autonomy, wellbeing, psychological detachment, productivity and additional hours by work arrangement (N = 420)

Note. Autonomy and productivity are scored 1 to 7 and psychological detachment 1 to 5, with higher scores indicating more of each construct; the WHO-5 is scored 0 to 100 (Topp et al., 2015). Extra hours are self-reported hours worked beyond the contracted load.

Correlational analysis clarified the mechanisms. Autonomy was associated with productivity (r = .38, p < .001) and, more modestly, wellbeing (r = .29); detachment was associated with wellbeing (r = .34); and additional hours were negatively associated with detachment (r = -.31, p < .001). In hierarchical regression predicting wellbeing, demographic controls explained 4% of variance, and adding arrangement type, autonomy and detachment raised the model to R² = .27, F(6, 413) = 25.4, p < .001, with autonomy (β = .21) and detachment (β = .26) both significant and the hybrid advantage reduced once they were included. This mediation-consistent pattern suggests arrangement type matters largely through the autonomy and detachment it affords.

Phase 2: Interview themes

Reflexive thematic analysis produced five themes, summarised in Table 2. Autonomy over time and place was valued almost universally, with participants describing the capacity to schedule demanding work around personal energy peaks and to reclaim commuting time. Boundary management emerged as the pivotal practice: those who sustained wellbeing had deliberate routines, from a physical workspace to a “shutdown” ritual, whereas remote workers without such practices described evenings that dissolved into email. As one fully remote participant observed, “the laptop is always there on the kitchen bench, so the working day never really closes” (Participant 12). Manager trust shaped how safely employees exercised flexibility; several described a “visibility anxiety” in which prompt replies and a green status indicator substituted for observed effort. Work intensification and the erosion of informal connection completed the picture.

Table 2: Themes from reflexive thematic analysis of interviews (n = 18)

Discussion

The findings answer the first research question directly: wellbeing and productivity differ meaningfully across arrangements, and hybrid work occupies the favourable middle ground. This is not because location itself is decisive but because of what different arrangements do to the underlying mechanisms. The regression evidence, in which the hybrid advantage weakened once autonomy and detachment were entered, positions those two constructs as the pathways through which flexibility operates, consistent with the motivational logic of the JD-R model (Bakker & Demerouti, 2017) and with meta-analytic evidence that autonomy mediates the benefits of telework (Gajendran & Harrison, 2007).

The second and third research questions are illuminated by the contrast between hybrid and fully remote workers. Fully remote workers reported the highest autonomy yet the lowest detachment and the longest additional hours, a configuration that is difficult to explain within a simple resource account but is precisely what the autonomy paradox predicts: given control over connectivity, many professionals extend rather than contain their effort (Mazmanian et al., 2013). Boundary theory clarifies why hybrid work fares better. The office day supplies external cues that scaffold segmentation, so hybrid workers retain some structural help with the boundary work that fully remote workers must perform entirely themselves (Ashforth et al., 2000). The interviews reinforced this reading: wellbeing tracked boundary management practices, not location, echoing the argument that flexibility benefits only those who can exercise genuine boundary control (Kossek & Lautsch, 2018).

Manager trust operated as the key organisational condition. Where performance was judged by output, flexibility functioned as a resource; where availability was the real currency, the resulting visibility anxiety eroded detachment and fed intensification. This maps onto the health-impairment pathway of the JD-R model, in which flexibility, stripped of trust and boundaries, converts from resource to demand. The pattern is not merely a wellbeing concern but a regulatory one, since employers now carry an explicit duty to manage foreseeable psychosocial hazards such as isolation and availability creep in distributed work (Safe Work Australia, 2022). The 143 additional annual hours estimated for fully remote workers is precisely the foreseeable exposure that duty contemplates.

Four limitations qualify these conclusions. The quantitative phase is cross-sectional, so causal ordering among autonomy, detachment and wellbeing cannot be confirmed. All measures are self-reported, and self-rated productivity is an imperfect proxy for objective output. The sample, although diverse, is drawn from knowledge occupations and does not generalise to roles that cannot be performed remotely. Finally, arrangement type was defined by usual practice and does not capture week-to-week variation.

Implications and Conclusion

Three sets of implications follow:

• Management practice: a hybrid default, paired with output-based performance expectations and explicit norms about response times, would preserve the autonomy that drives the benefits while containing the intensification that undermines them. Boundary-supportive leadership, including respect for the right to disconnect under the Fair Work Act 2009 (Cth), should be core capability, not discretionary goodwill.
• Organisational policy and regulation: employers should integrate distributed-work risks into their psychosocial hazard management systems, monitoring after-hours activity and workload as leading indicators, in line with the model code (Safe Work Australia, 2022) and the broader wellbeing context documented nationally (AIHW, 2022).
• Research: longitudinal and objective-productivity designs, ideally drawing on Australian administrative and time-use data (ABS, 2023), would strengthen the causal claims advanced here.

In sum, flexible work is neither uniformly beneficial nor inherently harmful for Australian knowledge workers; its effects depend on the mechanisms it activates. Hybrid arrangements delivered the best combination of wellbeing and productivity in this study, not because of where the work occurred but because they preserved autonomy while protecting recovery. Fully remote work maximised autonomy yet, absent strong boundaries and manager trust, tipped into intensification. Framed through the JD-R model and boundary theory, the practical task for Australian organisations is clear: to design flexibility so that autonomy is real, boundaries are supported, and trust replaces surveillance. Where those conditions hold, flexibility is a genuine resource for both wellbeing and performance; where they fail, it quietly becomes another demand.

References

Ashforth, B. E., Kreiner, G. E., & Fugate, M. (2000). All in a day’s work: Boundaries and micro role transitions. Academy of Management Review, 25(3), 472-491.

Australian Bureau of Statistics. (2023). Working arrangements. ABS.

Australian Institute of Health and Welfare. (2022). Australia’s health 2022: Data insights. AIHW.

Bakker, A. B., & Demerouti, E. (2017). Job demands-resources theory: Taking stock and looking forward. Journal of Occupational Health Psychology, 22(3), 273-285.

Braun, V., & Clarke, V. (2021). Thematic analysis: A practical guide. Sage.

Creswell, J. W., & Plano Clark, V. L. (2018). Designing and conducting mixed methods research (3rd ed.). Sage.

Fair Work Act 2009 (Cth).

Gajendran, R. S., & Harrison, D. A. (2007). The good, the bad, and the unknown about telecommuting: Meta-analysis of psychological mediators and individual consequences. Journal of Applied Psychology, 92(6), 1524-1541.

Kossek, E. E., & Lautsch, B. A. (2018). Work-life flexibility for whom? Occupational status and work-life inequality in upper, middle, and lower level jobs. Academy of Management Annals, 12(1), 5-36.

Mazmanian, M., Orlikowski, W. J., & Yates, J. (2013). The autonomy paradox: The implications of mobile email devices for knowledge professionals. Organization Science, 24(5), 1337-1357.

National Health and Medical Research Council. (2023). National statement on ethical conduct in human research. NHMRC.

Productivity Commission. (2021). Working from home (Research paper). Australian Government.

Safe Work Australia. (2022). Model code of practice: Managing psychosocial hazards at work. Safe Work Australia.

Sonnentag, S., & Fritz, C. (2007). The Recovery Experience Questionnaire: Development and validation of a measure for assessing recuperation and unwinding from work. Journal of Occupational Health Psychology, 12(3), 204-221.

Topp, C. W., Ostergaard, S. D., Sondergaard, S., & Bech, P. (2015). The WHO-5 Well-Being Index: A systematic review of the literature. Psychotherapy and Psychosomatics, 84(3), 167-176.