Increasing Productivity of Gen Z Employees: The Role of Flexible Work Arrangements and Participative Style

The study addresses how flexible work arrangements (FWAs) and participative style influence the productivity of Generation Z (Gen Z) employees, with emotional engagement as a mediator. With Gen Z forming a large share of the workforce and valuing flexibility, autonomy, and growth, organisations face changing expectations about where, when, and how work is performed. Prior evidence on FWAs’ impact on productivity is mixed, and individual-level effects of participation on productivity have been underexplored, particularly for Gen Z. This study investigates these relationships among Gen Z IT employees in Indonesia to inform HR practices that align with Gen Z characteristics. Hypotheses propose positive effects of FWAs and participative style on emotional engagement and productivity, and a positive effect of emotional engagement on productivity.

- Flexible work arrangements (FWAs): Defined as employee discretion over when, where, and how work is performed (flexitime, telework, job sharing, part-time, compressed hours). Prior studies link FWAs to reduced stress, absenteeism, turnover, and enhanced satisfaction and productivity, though some report no effect on productivity and potential downsides for engagement (e.g., remote communication strain). - Participation style: Joint employee–management involvement in decision-making, problem-solving, and action planning. Participation enhances information sharing, training, autonomy, responsibility, and rewards, fostering belonging, commitment, and better decisions, which can heighten engagement and performance. - Emotional engagement: Willingness to invest effort (vigour, dedication, sense of belonging, pride, trust) and align personal goals with organisational aims. Drivers include intrinsic motivation, culture, communication, and talent practices. Engagement relates positively to performance, initiative, and retention. - Employee productivity: Output relative to inputs, comprising effectiveness (quality, quantity, timeliness) and efficiency. Engagement and supportive practices are theorised to enhance productivity. Derived hypotheses: (1) FWAs → emotional engagement (+); (2) FWAs → productivity (+); (3) Participative style → emotional engagement (+); (4) Participative style → productivity (+); (5) Emotional engagement → productivity (+).

Design: Explanatory, quantitative study testing effects of FWAs and participative style on productivity with emotional engagement as mediator among Gen Z employees in Indonesia. Sample and data collection: Purposive sampling of IT-sector employees born 1995–2010 who had performed flexible work ≥6 months. Online survey using 1–10 Likert-type scales (1 = strongly disagree; 10 = strongly agree). Distributed 266; valid responses 259 (97% response rate). Roles included software developers, DBAs, system analysts, network architects, web developers, IT support, and system managers. Measures: - FWAs (Coenen & Kok, 2012): time flexibility, timing flexibility, place flexibility, change off, change schedule; example item: “I have freedom in determining working hours.” - Participative style (Park, 2012): self-management team, team briefing, job enrichment, power sharing, mutual understanding; example: “My leader gives me the opportunity to manage work.” - Emotional engagement (Agarwal, 2014): vigour, dedication, sense of belonging, pride, trust; example: “I feel connected to my work.” - Productivity (Demerouti & Cropanzano, 2010): timeliness, conformity to standards, quality, independence, adaptability; example: “I am able to complete work according to specified standards.” All scales used 1–10 response options. Analysis: Validity via item–total correlations (significant at 0.01); factor analysis with varimax rotation (Kaiser MSA > 0.50). Reliability: construct reliability > 0.70, AVE > 0.50. Normality: CR for skewness/kurtosis within ±2.58 (max 1.786). Structural equation modelling using IBM AMOS 26; goodness-of-fit indices indicated good fit (Chi-square small; CMIN=1.154; RMSEA=0.024; GFI=0.935; AGFI=0.917; TLI=0.992; CFI=0.993).

- Measurement quality: All constructs exhibited acceptable reliability (CR > 0.70) and validity (AVE > 0.50). Reported construct reliabilities: FWAs 0.861; Participative style 0.895; Emotional engagement 0.917; Productivity 0.909. Factor loadings ranged 0.61–0.89. - Model fit: Excellent overall fit (CMIN=1.154; RMSEA=0.024; GFI=0.935; AGFI=0.917; TLI=0.992; CFI=0.993). - Structural paths: • FWAs → Emotional engagement: Estimate 0.160; CR=1.899; p=0.058 (not significant). • FWAs → Productivity: Estimate 0.179; CR=3.806; p=0.001 (significant positive effect). • Participative style → Emotional engagement: Estimate 0.588; CR=6.121; p=0.001 (significant positive effect). • Participative style → Productivity: Estimate 0.615; CR=8.687; p=0.001 (significant positive effect). • Emotional engagement → Productivity: Estimate 0.202; CR=4.934; p=0.001 (significant positive effect). Interpretation: Participative style strongly enhances both emotional engagement and productivity; emotional engagement further boosts productivity. FWAs directly increase productivity but do not significantly raise emotional engagement in this sample.

The findings address the research question by showing that while flexible work arrangements directly enhance Gen Z employees’ productivity, they do not significantly increase emotional engagement—likely reflecting heterogeneous FWA practices, policies, and cultures across firms. This aligns with evidence that FWAs may require complementary practices and agile cultures to effectively foster engagement and that remote work can have a ‘dark side’ (e.g., communication strain and exhaustion) that dampens engagement. In contrast, participative style robustly improves both emotional engagement and productivity, underscoring the value of involving employees in decisions, sharing information, enriching jobs, and granting autonomy and responsibility. Emotional engagement itself contributes to higher productivity through greater energy, dedication, initiative, and adherence to standards. For HR practice, the results highlight that combining well-designed FWAs with genuine participation is likely to yield stronger productivity outcomes for Gen Z workers, with participation helping to build the emotional connection that translates to discretionary effort and sustained performance.

Four of five hypothesised relationships were supported: FWAs positively affect productivity; participative style positively affects emotional engagement and productivity; and emotional engagement positively affects productivity. FWAs did not significantly affect emotional engagement, potentially due to variations in FWA implementation and organisational contexts across companies. Overall, giving Gen Z employees flexibility in time, place, and methods of work enhances productivity, and encouraging participation strengthens emotional engagement and further improves productivity. The study contributes practical guidance for HR in Gen Z–intensive contexts by emphasising the importance of pairing FWAs with participative practices to maximise productivity.

The study focused on Gen Z employees working in Indonesia’s IT sector, which may limit generalisability to other generations, industries, or countries. Additionally, variation in how FWAs are implemented across different companies may have influenced the non-significant effect of FWAs on emotional engagement.