Remote Work Flexibility as a Strategic HR Lever: A Structural Equation Modelling Study of Employee Satisfaction and Organisational Performance

Abstract

Purpose: The study aimed to examine remote work flexibility as a strategic tool in human resource management and to evaluate its impact on employee satisfaction and performance in the post-pandemic workplace.

Methodology: Quantitative and cross-sectional research design was used. The primary data source comprised 328 employees who participated in remote or hybrid work. To test the hypothesised relationships and the mediation effect of employee satisfaction, Structural Equation Modelling (SEM) was conducted using SmartPLS 4.

Findings: The empirical data showed that flexibility in remote work had a tremendous positive influence on employee satisfaction and organisational performance. Furthermore, employee satisfaction was found to have a substantial impact on organisational performance. Mediation analysis confirmed that the link between the flexibility of remote work and organisational performance is partially mediated by employee satisfaction, indicating both direct and indirect pathways through which flexibility influences performance.

Practical Implications: The findings suggest that remote work flexibility as a key HR tool should be implemented in organisations based on the principles of trust-based management, clear policies, and people-focused practices to increase satisfaction and maintain performance.

Originality/Value: This research contributes to the strategic HRM body of knowledge by empirically demonstrating that remote work flexibility is a value-creating HR practice and by integrating the concepts of flexibility, satisfaction, and performance within a single SEM paradigm.