The Key Role of Employee Commitment in the Relationship Between Flexible Work Arrangements and Employee Behavior

Abstract

The research’s main objective is to examine the mediating role of Employee Commitment (EC) in the relationship between Flexible Work Arrangements (FWAs) and employee behavior (Innovative Work Behavior (IWB) and Employee Performance (EP)) among employees in the Republic of Serbia. The research consists of a theoretical part (review of the literature on previous theoretical and empirical findings) and an empirical part (Partial least squares structural equation modeling (PLS-SEM) analysis conducted on a sample of 582 employees in Serbia). The main findings have determined that there is full mediation, as the indirect effect of FWAs on Innovative Work Behavior through employee commitment is significant, and partial mediation, as the indirect effect of FWAs on Employee Performance through Employee commitment. The flexibility provided by FWAs not only increases employee satisfaction and loyalty but also motivates them to reciprocate through improved behavior and employee performance. In this way, employee commitment becomes a key factor that links organizational flexibility policies with positive outcomes in employee behavior. Flexible work arrangements are key to HR sustainability by enabling a better work-life balance, reducing stress, increasing employee commitment, and fostering long-term innovation and productivity. The mediating role of employee commitment in the relationship between flexible work arrangements and employee behaviors, such as innovative work behavior and employee performance, is particularly important. A high level of commitment, which stems from flexible work conditions, significantly contributes to innovative practices and improved performance, further strengthening the sustainability of organizations.

1. Introduction

Jaško et al. [1] emphasize that an organization can be viewed as a complex system composed of interconnected components, including people, processes, technology, etc., which function together to achieve commonly defined goals. In this context, the implementation of flexible work arrangements represents a significant aspect that can impact all parts of the organizational system. Flexible work arrangements are a significant factor affecting various aspects of employee behavior in the modern environment [2]. Due to various global impacts such as the COVID-19 pandemic [3], economic crises primarily caused by wartime turmoil and global instability, increasing market competition, and rapid advancements in information technology and artificial intelligence, organizations worldwide have been forced to alter their behavioral patterns and adopt new strategies not only to overcome these challenges but also to become leaders in their fields [4,5]. In this situation, organizations must be more flexible and innovative in unexpected HR-related issues that affect employees [6]. Understanding the mechanisms through which flexible work arrangements influence employee outcomes is crucial due to the growing adoption of such work practices by organizations. A vital aspect important to consider is the role of employee commitment as a mediator in the relationship between flexible work arrangements and employee behavior, including innovative work behavior and job performance [7,8].

Employee commitment reflects the psychological connection and dedication that employees feel towards their organization and is a key factor in enhancing not only job performance but also organizational outcomes [9]. Various theoretical and empirical insights highlight the crucial role of flexible work arrangements in increasing employee commitment by providing a better work-life balance, reducing work-related stress, and enhancing job satisfaction [10,11,12]. Andrabi and Rainayee [13] emphasize that innovative work behavior is characterized by the creation and implementation of new ideas and is crucial for the adaptability and growth of an organization. Employees who exhibit higher levels of commitment are more likely to engage in innovative work behavior due to their stronger connection to the organization, and such employees generally have greater motivation to contribute to its success [14]. Similarly, job performance, encompassing both the quality and quantity of work outputs, is often positively impacted by increased commitment. Committed employees are typically more engaged, productive, and aligned with organizational goals [15].

This study aims to explore the mediating role of employee commitment in the relationship between flexible work arrangements (FWAs) and two key aspects of employee behavior: innovative work behavior and job performance. By examining this mediating role, the research seeks to provide deeper insights into how FWAs can lead to improved employee outcomes through increased commitment. Understanding these dynamics not only contributes to the academic literature but also offers practical implications for organizations seeking to optimize their work arrangements to foster a more committed and high-performing workforce. The research paper is divided into five parts. The first part focuses on the theoretical background of the research, where the authors explain all the research variables and the direct and indirect relationships based on existing theoretical and empirical knowledge. The second part is dedicated to the research methodology, detailing the questionnaire used to collect the sample necessary for analysis, the method of sample collection, and the sample itself. The third part involves testing the research hypotheses using PLS-SEM (Partial Least Squares Structural Equation Modeling). The fourth part discusses the obtained results and compares them with the findings of other authors on this topic. The final part provides the conclusion, where the authors summarize the research results and offer recommendations for employers and employees based on the research themes. The research gap focuses on the lack of theoretical and empirical knowledge regarding the mediating role of employee commitment in the relationship between flexible work arrangements and employee behavior (IWB and EP).

The research examines the mediating role of employee commitment in the relationship between flexible work arrangements and employee behaviors, specifically innovative work behavior and employee performance. Sustainable organizational development requires thoughtful management of resources, with human resources playing a key role. Flexible work arrangements, by increasing employee satisfaction and commitment, contribute to better work-life balance, reduced stress, and greater productivity, which directly impacts employee performance. Innovative work behavior, resulting from these conditions, further stimulates creativity and the development of new, sustainable business solutions.

2. Theoretical Background

This chapter delves into the theoretical foundations underlying the study, providing a comprehensive overview of the key concepts and their interrelationships. We begin by exploring FWAs, examining various forms and their impact on the modern workplace. Next, we discuss employee commitment, highlighting its significance and how it influences organizational outcomes. Following this, we analyze innovative work behavior, focusing on its role in fostering organizational adaptability and growth. We then address employee performance, detailing how it is measured and influenced by different factors. In subsequent sections, we investigate the relationship between FWAs and employee commitment, as well as the connections between FWAs and both innovative work behavior and employee performance. Finally, we explore the mediating role of employee commitment in the relationship between FWAs and employee behavior, specifically examining how commitment serves as a conduit through which FWAs impact IWB and Employee performance. This chapter aims to provide a solid theoretical framework for understanding how flexible work practices affect various aspects of employee behavior and performance within organizational settings.

2.1. Flexible Work Arrangements

The goal of organizations is to retain existing and attract new talented employees, and to achieve this, they employ various strategies. Sinclair et al. [16] and Berber et al. [17] emphasize that flexible work arrangements represent a necessary phenomenon in today’s digital society, where organizations worldwide are faced with various challenges that compel them to adjust their work patterns and find adequate ways of performing working tasks to maintain and improve their market position. One such strategy, according to Kelliher and De Menezes ([18], pp. 4–6) is job redesign and the implementation of FWAs. Work redesign has led organizations worldwide to develop flexible work arrangements, which include modifications to traditional work organization methods, such as flexitime, telework, home-based work, overtime, part-time, weekend work, shift work, and compressed workweeks [19,20,21]. Thompson, Payne, and Taylor [22] and Bjärntoft et al. [23] emphasize that these arrangements represent a mutually beneficial arrangement between employers and employees, where both parties agree on when, where, and how employees will work to meet the company’s needs.

2.2. Employee Commitment

O’Reilly III [24] and Trofimov et al. [25] emphasize that employee commitment deals with “the sense of attachment an employee has to the values and goals of the organization, their role in achieving and nurturing them, and their loyalty to the organization for its own sake, not because of its instrumental value.” Employees with a higher level of commitment are willing to invest more time and skills to achieve better organizational success. Mueller, Wallace, and Price [26] emphasize that employee commitment is characterized by a strong sense of identification with the mission, values, and goals of the organization. Meyer, Becker, and Vandenberghe [27] and Hanaysha and Majid [28] point out that committed employees are highly motivated to carry out business activities, are proud of the organization they work for, and demonstrate a positive attitude towards their jobs. Swailes [29] notes that committed employees show that they are likely to stay and build a career within the company they are employed in and will actively seek opportunities for growth and development.

Building organizational commitment is one of the key factors for ensuring organizational effectiveness [30] because employee commitment can positively impact organizational performance. Allen and Meyer [31] and Meyer and Herscovitch [32] suggest that organizational commitment can be understood through affective, normative, and continuance commitment. Allen and Meyer [33] emphasize that these three types of commitment can significantly influence employees’ attitudes, behavior, and willingness to strive for the organization’s goals and success. Affective commitment is a desire to belong to the organization. Continuance commitment is based on a belief that leaving the organization will be costly, while normative commitment is a sense of obligation to the organization.

2.3. Innovative Work Behavior

Afsar, Masood, and Umrani [34] emphasize that innovation is one of the key factors that help organizations adapt to constantly changing economic conditions to achieve a competitive advantage. Innovations are crucial to the achievement of better organizational performance, as they enable organizations to quickly adapt to market changes and provide new goods and services. Gupta [35] highlights that innovative work behavior is foundational because it is individuals, and not organizations, who create ideas. De Jong and Den Hartog [36] state that innovative work behavior is characterized as “the deliberate behavior of an individual to introduce and apply new ideas, items, procedures, and methods at their workplace, unit, or organization”. Yunus et al. [37] emphasize that innovative work behavior has greater significance than imagination, as inventiveness is merely the ability to develop new thoughts and ideas, while innovative work behavior also involves the execution of these ideas. Janssen and Van de Vliert [38] defined innovative work behavior as “the outward expression of employees’ internal creativity; a method used to develop creative products and processes that employees generate and implement through new ideas to improve performance or solve job-related problems”.

Janssen [39], Lecat, Beausaert, and Raemdonck [40], and Mascareño, Rietzschel, and Wisse [41] highlight three key phases in the innovation process: idea generation, idea promotion, and idea realization. Idea generation involves generating a set of different creative ideas by employees, which can be encouraged through various techniques such as workshops, idea competitions, suggestion boxes, brainstorming sessions, etc. [42]. Idea promotion refers to promoting ideas and selecting and communicating those that have the potential to create greater value and drive better business success [43]. Meanwhile, idea realization represents the final phase that involves the implementation and execution of selected innovative ideas. Messmann and Mulder [44] note that idea realization involves experimenting with one’s ideas, creating a physical or intellectual prototype, testing and improving the adequacy of the innovation, and planning strategic integration into organizational practice.

2.4. Employee Performance

Employee performance represents an individual’s effectiveness in terms of how well they perform specific job tasks, duties, and responsibilities. Sverke et al. [45] and Anakpo, Nqwayibana, and Mishi [46] emphasize that some factors influencing employee performance include skills, abilities, motivation to work, access to resources, work ethic, and work equipment. It is important to distinguish between employee performance and organizational performance. Organizational performance refers to the overall effectiveness and success of an organization in achieving its defined goals. AlTaweel and Al-Hawary [47] stress the need to observe the collective performance of all individuals, teams, and departments to determine organizational success. It can be concluded that better individual employee performance contributes to improved organizational performance.

There are three distinct aspects of assessing and understanding employee effectiveness and contribution in the workplace. Task performance refers to the effectiveness and efficiency of individuals or groups in executing specific tasks or sets of tasks [48]. Adaptive performance refers to an employee’s ability to adapt and respond effectively to challenges, changes, and unexpected situations in the work environment. Adaptive performance encompasses employees’ flexibility, creativity, problem-solving skills, and willingness to learn and grow [49,50]. Contextual performance refers to behaviors and voluntary actions employees exhibit for the benefit of the organization and contribute to its overall functioning. Contextual performance reflects employees’ commitment to the organization and their willingness to go beyond formal job requirements to contribute to the overall success of the team or company [51]. Assessing all three aspects provides a comprehensive understanding of an employee’s overall performance and contribution in the workplace. One way to improve organizational performance is for organizations to focus on areas such as talent management, employee engagement, training and development, performance management systems, and creating a supportive work environment [52,53].

2.5. Underpinning Theories

In explaining the relations between FWAs and employee attitudes and behaviors, different theories have been used, among which the most important are social exchange theory, self-determination theory, and job demands-resources theory.

Social exchange theory is one of the most used in explaining mentioned relations. Social exchange theory suggests that individuals engage in social relationships and interactions with others based on perceived exchanges of rewards and costs. Čiarnienė, Vienažindienė, and Adamonienė [54] define FWAs as a set of benefits that allow employees to control where and when they will perform business activities outside the standard work arrangement. In the research by Bontrager, Clinton, and Tyner [55], it is stated that the availability of flexibility is defined as the extent to which employees feel free to use formal or informal work models. Formal FWAs refer to the policies and programs implemented by companies to provide employees with ways to adjust their work schedules, locations, or hours necessary to meet job demands. On the other hand, informal FWAs refer to forms of flexibility that are not established through employment contracts or official organizational policies. They represent the result of agreements between employers, employees, or teams based on the needs and circumstances that may influence the conduct of business activities. Employees perceive flexible work arrangements as a form of reward that can improve work-life balance, create overall well-being [56], and positively influence attitudes and behavior [57]. Cropanzano and Mitchell [58] emphasize that social exchange theory highlights the importance of perceived fairness. Employees assess whether the rewards they receive for their work are proportional to the costs and inputs they bear. Cheng et al. [59] state that if employees have to work longer hours or feel isolated due to remote work, a perception of unfairness will arise, potentially affecting their job satisfaction and commitment. Organizations must provide the necessary resources, training, and communication channels to help employees adapt more easily to the implementation of flexible work arrangements. Maintaining healthy social exchanges is crucial, and this requires transparency and fairness in the distribution of benefits and responsibilities associated with flexible work arrangements. Based on all the above, it can be concluded that social exchange theory provides insight into how individuals and organizations engage in reciprocal relationships [2]. Organizations can adequately design and implement business strategies that foster positive social exchange if they have a good understanding of the rewards and costs associated with flexible work arrangements.

Self-Determination Theory focuses on the basic psychological needs that motivate human behavior: the need for autonomy, competence, and relatedness [60,61]. Employee commitment can be seen as a bridge between flexible work arrangements and employee behavior outcomes (innovative behavior and performance). In terms of autonomy and flexible work arrangements, flexible work arrangements, such as telework, flexi-time, and flexi-place, significantly increase employees’ sense of autonomy. Employees have the opportunity to organize their workday and work environment independently, which satisfies their need for autonomy. When employees feel they have greater control over their work environment, their level of commitment increases because they feel more integrated into the organization and have a sense that their contribution to performance comes from their initiative, rather than simply responding to external demands. Regarding competence and resources, flexible work allows employees to better manage their tasks and allocate time according to their abilities, directly impacting their sense of competence. When employees feel they have the necessary resources and space to optimally use their skills, their commitment grows. This commitment then leads to increased employee performance, as employees work with greater enthusiasm and confidence that they will succeed. Additionally, the sense of competence enhances the tendency towards innovative work behavior, as employees feel capable enough to propose new ideas and approaches. In the case of relatedness and social interaction, although flexible work often reduces direct interactions with colleagues, organizations can create an environment where connectedness is still maintained through teamwork, virtual meetings, and informal events. When employees feel part of a community, their need for relatedness is met, strengthening their commitment. This commitment, combined with the sense of connectedness, encourages employees to put in greater effort and cooperation, which improves both performance and innovative work behavior [61].

The Job Demands-Resources (JD-R) theory predicts that a job contains two types of characteristics: job demands, which refer to physical, psychological, social, or organizational aspects that require effort and can cause stress (e.g., time pressure, overtime) and job resources, which refer to aspects that help achieve goals, reduce demands, or promote personal growth (e.g., management support, work flexibility). Flexible work arrangements can be seen as a resource that reduces stress and increases employee satisfaction. These arrangements can lessen time pressure and balance work and life, which positively affects employee commitment and performance. On the other hand, if poorly implemented, they can become a demand that leads to feelings of isolation or inadequate support. Ter Hoeven and Van Zoonen [62] found that flexible work design is positively associated with employee well-being through improved work-life balance, autonomy, and effective communication. Wang and Xie [8] highlight that flexible work arrangements are viewed as job demands, resulting in employees being isolated from their leaders and colleagues in both space and time. This leads to delays in information flow and incomplete information transfer and causes the depletion of individual resources.

2.6. Relationship Between Flexible Work Arrangements and Employee Commitment

Kelliher and Anderson [2] emphasize that employees who utilize flexible work arrangements report higher levels of organizational commitment and job satisfaction compared to their colleagues who do not use such arrangements. Gahlawat and Kundu [63], based on primary data from 569 respondents from 207 companies in India, applied the PLS-SEM method, and the results indicated that participative human resource management in the form of self-managed teams, flexible work arrangements, and empowerment results in greater affective commitment, better organizational climate, reduced turnover intentions, and improved company performance. It was found that affective commitment, organizational climate, and turnover intentions mediate the relationship between participative human resource management and company performance. Gahlawat and Kundu [64], based on primary data from 575 employees in 209 organizations, found that employees’ perceptions of high-involvement work practices, including FWAs, unexpected evaluations, and compensation, empowerment, extensive training, and self-managed teams result in increased organizational commitment, satisfaction, engagement, and motivation for work in organizational citizenship behavior among employees. Hashmi, Al Ghaithi, and Sartawi [65] researched a sample of employees working in various private and public organizations in the United Arab Emirates, representing the main service industries of that country. The research indicated that FWAs have a significant and positive relationship with organizational commitment, work quality, and perceived employee productivity. In addition to direct relationships, the research found that employee happiness plays a mediating role in the relationship between FWAs and the observed variables. Jung and Yoon [66], in a sample of 277 employees (Generations X, Y, and Z) in South Korea, found that the possibility of applying FWAs is positively related to work engagement and job satisfaction; work engagement positively influenced job satisfaction; job satisfaction had a positive impact on employee commitment; and the impact of work flexibility on engagement did not differ across generations. However, the authors emphasize that Generation Z showed the greatest increase in employee engagement because of work flexibility. Kortsch et al. [67] examined two groups of client advisors who worked remotely (N = 32) or directly in the bank (N = 110) in similar positions. The research indicated that the commitment of employees who work remotely is significantly higher than that of employees who work physically in the bank.

Based on the mentioned theories and previous research, the first research hypothesis is formulated as follows:

H₁. 

Flexible work arrangements have a positive direct effect on employee commitment.

2.7. Relationship Between Flexible Work Arrangements and Innovative Work Behavior

Moll and de Leede [68] indicated that the implementation of these new ways of performing working tasks has various positive impacts on all stages of employees’ IWB. For instance, the application of remote work is beneficial for opportunity exploration/research and idea generation as it allows employees to concentrate and focus better when working from home. Flexi-time provides employees with the opportunity to plan their tasks and spontaneously engage in innovative work behavior when they feel ready. It also helps employees to be more relaxed and energetic, improving efficiency and the likelihood of engaging in innovative work behavior. Rahman, Kistyanto, and Surjanti [69] analyzed the impact of FWAs on employee performance through IWB in the banking sector in Indonesia, using a sample of 70 employees. The research results showed that the application of flexible work arrangements positively affects innovative work behavior. Qi, Liu, Li, and Liu [70], in a sample of 315 IT sector managers in China, found that the level of employees’ innovative behavior is higher if the organization’s offer of FWAs matches the employees’ needs. Additionally, a better alignment of the offer leads to a higher level of innovative work behavior, and the level of IWB approaches its peak when the alignment between demand and capability is at a moderate level. Jiang et al. [71] emphasize that FWAs can foster innovative work behavior among knowledge workers and that career advancement plays a partial mediating role. Moreover, human resource policies that facilitate opportunities have a positive effect on alleviation.

Based on the mentioned theories and previous research, the second research hypothesis is formulated as follows:

H₂. 

Flexible work arrangements have a positive direct effect on innovative work behavior.

2.8. Relationship Between Flexible Work Arrangements and Employee Performance

ten Brummelhuis and Van Der Lippe [72], based on a sample of 482 employees in 24 organizations, found that organizational work/family support improved work performance among parents but decreased performance among singles. However, aside from this, the performance of singles improved due to the employee’s ability to use FWAs, while couples benefited from the social support provided by supervisors. Dasgupta, Suar, and Singh [73] pointed out that FWAs, as well as other factors such as respect and recognition, a collaborative approach, clear direction, etc., are important indicators that positively affect employees, making them happier, which leads to superior performance. De Menezes and Kelliher [74] found that formal FWAs (flexi-time) are negatively associated with performance but are a source of greater job satisfaction, while informal remote work has positive indirect effects through organizational commitment and job satisfaction on performance. Assumptions about the negative impact of flexible work arrangements on employee performance are focused on social distancing, difficulties in communication and coordination between employees, overtime work, lack of structure and discipline, as well as reduced visibility and support from management. Ramakrishnan and Arokiasamy [75], on a sample of “white-collar” employees aged between 26 and 60 years in Malaysian organizations, found that FWAs have a positive effect on employee performance. Bhusan and Sar [76] consider the implementation of flexi-place an important factor in organizational behavior, as it maintains employee productivity and thus influences organizational performance. Sekhar and Patwardhan [77] find out, based on a sample of 214 employees from 46 service companies in India, that supervisor support mediates the relationship between FWAs and EP. The authors emphasize that supervisor support influences employees to feel more valued, which automatically reflects on their performance.

Based on the mentioned theories and previous research, the third research hypothesis is formulated as follows:

H₃. 

Flexible work arrangements have a positive direct effect on employee performance.

2.9. Mediating Role of Employee Commitment in the Relationship Between Flexible Work Arrangements and Employee Behavior (Innovative Work Behavior and Employee Performance)

A review of the existing theoretical and empirical knowledge on the mediating role of employee commitment in the relationship between FWAs and employee behavior (IWB and EP) leads to the conclusion that there is an insufficient number of studies on this topic.

Rahman, Kistyanto, and Surjanti [69] examined the mediating role of innovative work behavior in the relationship between flexible work arrangements and employee performance in a sample of 70 employees in the banking sector in Indonesia, using structural equation modeling with an emphasis on the partial least squares method. The research results showed that FWAs positively affect IWB, IWB positively affects employee performance, and IWB positively mediates the relationship between FWAs and employee performance. Nangoy et al. [78] emphasize that organizations can maximize the use of technology to support any well-being program, so regular business meetings, communication, and the implementation of flexible work arrangements can be facilitated with the use of technology. The authors highlight that well-being does not directly affect IWB but does so through organizational commitment; therefore, organizations need to develop human capital management programs that encourage the formation of organizational commitment.

The proprietary role of employee commitment among those who utilize FWAs can be explained through the way these arrangements impact their sense of belonging and loyalty to the organization [79]. When employees can apply FWAs such as flexi-time or remote work, they often experience greater autonomy and a better work-life balance [80]. This sense of balance can lead to an increase in their commitment to the organization, as they feel that the organization provides working conditions that align with their personal needs and values. When employees are committed to the organization, they are more likely to show proactivity in problem-solving and generating new ideas. Commitment motivates them to seek ways to improve processes, products, or services because they feel that their efforts are recognized and valued. Flexible work arrangements can further encourage this innovation by giving employees the freedom to work in conditions that best suit their creative processes. Employees who are more committed to the organization often demonstrate higher levels of job performance, and commitment also means that they are more willing to put in extra effort and take responsibility for achieving organizational goals, which directly contributes to their performance [81].

Based on the mentioned theories and previous research, the fourth and fifth hypotheses are formulated as follows:

H₄. 

Employee commitment produces positive effects on the innovative work behavior of employees who use flexible work arrangements.

H₅. 

Employee commitment produces positive effects on the employee performance of employees who use flexible work arrangements.

3. Methodology

This chapter outlines the methodological approach used in the study, providing a detailed explanation of the data collection and analysis processes. It begins with a description of the questionnaire, including its design, structure, and the types of questions used to measure the relevant variables. Next, it discusses the sampling procedure, explaining how participants were selected and the steps taken to ensure that the sample was representative of the target population. Finally, it offers a detailed overview of the sample, including its size, demographic characteristics, and any relevant aspects that affect the generalizability of the findings. This chapter aims to provide a clear understanding of the research methods used for data collection and analysis, ensuring the validity and reliability of the research results.

3.1. The Questionnaire and Sampling Procedure

Based on the defined subject and objectives, the research included employees in organizations operating within the territory of the Republic of Serbia. Data collection, using a created electronic questionnaire, was conducted from September 2021 to September 2022 via electronic means due to the adverse epidemiological situation caused by the COVID-19 pandemic. The analysis was carried out on a sample of 582 employees who had the opportunity to use FWAs at that time. The questionnaire was divided into three parts: the first part covered socio-demographic and organizational characteristics, the second part addressed statements regarding the application of flexible work arrangements (11 statements—Albion [82]), and the final part focused on statements related to dependent variables, employee commitment (6 statements) Yousef [83], innovative work behavior (9 statements—Janssen [39]), and employee performance (5 statements—Janssen and Van Yperen [38]), as shown in the following

Table 1. Represent details about questionnaire.

Variable		Scale	Number of Statements	Original Source
Independent	Flexible work arrangements	Likert 1–strongly disagree5–strongly agree	11	Albion [82]
Dependent	Employee commitment		6	Yousef [83]
	Innovative work behavior		9	Janssen [39]
	Employee performance		5	Janssen and Van Yperen [38]

Source: The authors’ research.

.

Based on the created electronic questionnaire, the authors collected the answers. The questionnaire was distributed to employees in the Republic of Serbia who had the opportunity to use various forms of flexible work arrangements. The authors used the professional social network LinkedIn as well as their contacts to gather as many responses as possible. Data collection lasted from September 2021 to September 2022 using Google Forms, allowing respondents to answer the questions and statements at any time using their mobile devices. The survey was anonymous, and no personal data that could identify the respondents were requested. A total of 582 responses were collected from employees in the Republic of Serbia. According to the Statistical Office of the Republic of Serbia, the total number of employees in the second quarter of 2022 was 2,310,035 [84]. Considering the size of the target population in the research for 2022, and according to the sample size formula developed by Cochran [85], it is concluded that a sample of at least 385 employees can be considered sufficient for the research (Social Science Statistics, 2024). Hair et al. [86] note that the minimum sample size for research on relationships using PLS-SEM is defined by the “Ten times more rule”, which suggests that the minimum sample size should contain 10 times more elements than the number of relationships between observed variables. Based on this, it can be concluded that this criterion has been met.

3.2. The Sample

A total of 582 employees completed the questionnaire, with the majority being men (50.5%) and the remainder being women (49.5%). The largest group of respondents is between 25 and 34 years old (45.5%), followed by those aged 35 to 44 years (29.7%), 45 to 55 years (11.7%), under 25 years (9.1%), and the smallest group is those over 55 years (4%). The analysis of educational levels revealed that the largest proportion of respondents hold a master’s degree (48.6%), followed by bachelor’s degrees (29.7%), doctoral degrees (10.1%), vocational studies (8.2%), and the smallest percentage holds a master (magistar) degree (3.3%). The sample structure in terms of educational level does not match the national average in the Republic of Serbia. However, given the research objective, a structure with a higher proportion of highly educated employees is expected, as these employees are more likely to use flexible work arrangements [5]. The analysis of company positions indicates that the largest proportion of respondents hold the position of specialist (66.8%), followed by administrative workers (9.8%) and managers (23.4%). The largest proportion of respondents work in medium-sized organizations (39%), followed by large organizations (32%), while the smallest proportion work in small organizations (29%). Most respondents work in the private sector (70.6%), while the remainder work in the public sector (29.4%).

Based on the presented descriptive statistics, it can be concluded that most employees belong to a younger age group, have a higher level of education, and mostly hold positions as managers and specialists, which are more likely to involve roles with a higher level of application of various types of FWAs compared to positions with physical labour. Most of them work in the IT sector and the education sector, which aligns with the educational level of the sample. During the COVID-19 pandemic, these two sectors experienced a high level of adaptation of various forms of flexible work arrangements, such as remote work, work from home, and flexi-time [87]. Most of the respondents work in the private sector in the Republic of Serbia.

4. Results

The testing of research hypotheses was conducted using the PLS-SEM model in SmartPLS 3 software for data processing. The formative second-order construct, Flexible Work Arrangements, was composed of two reflective first-order constructs (Flexible work arrangements–Family and Flexible work arrangements–Job). Employee commitment, innovative work behavior, and employee performance are reflective constructs. Employee commitment is a second-order reflective construct observed through three first-order reflective constructs: identification, extra effort, and desire to stay. Innovative work behavior is a second-order reflective construct observed through three first-order reflective constructs: idea generation, idea promotion, and idea implementation, while employee performance is a first-order reflective construct (reflected through indicators). These relationships are illustrated in Figure 1.

Hair et al. ([88], p. 77) emphasize that outer loadings above 0.708 should be retained, as they indicate that the construct explains more than 50% of the variance in the indicators, thereby ensuring their acceptability. Indicators with outer loadings between 0.4 and 0.708 should be retained if they do not compromise further analysis and reliability, while those with values below 0.4 should be removed from the measurement model [89]. Analysis of the outer loadings revealed that items FWAs2R, FWA4R, IWB6, and EP5R had to be removed from further analysis as their loading levels were below the acceptable threshold.

In the next part of the research, the authors analyzed the measurement model’s reliability. This analysis was focused on examining formative and reflective constructs (analysis of the outer model). The formative construct in the model was assessed by analyzing the outer weights, standard deviation, T statistics, p-values, and variance inflation factor (VIF) are shown in

Table 2. Analysis of formative constructs in the outer model and values of the variance inflation factor.

Formative Construct	Outer Weights	Standard Dev.	T Stat.	p-Values
FWAs-Job → FWAs	0.612	0.026	23.980	0.000
FWAs-Family → FWAs	0.583	0.026	22.192	0.000
	Variance inflation factor–VIF			Criterion
FWAs-Job	1.19			<3.3 [90]
FWAs-Family

Source: The authors’ research.

.

Based on the analysis of the formative construct of the outer model, it can be concluded that both first-order constructs (FWAs-Job and FWAs-Family) have statistically significant relationships with the second-order formative construct, as p < 0.05, and that the variance inflation factor (VIF) values for the formative construct are <3.3.

Table 3. Assessment of measurement model reliability and VIF values.

Item	Variable Name	Cronbach’s α	Composite Reliability	Average Variance Extracted (AVE)	VIF
FWAs3R	FWAs-Job	0.75	0.84	0.57	1.260
FWAs8R					1.297
FWAs9R					1.764
FWAs10R					1.804
FWAs1	FWAs-Family	0.74	0.84	0.57	1.182
FWAs5					1.867
FWAs6					2.031
FWAs7					1.362
EC2	Identification	0.78	0.90	0.82	1.673
EC3					1.673
EC1	Extra effort	/	/	/	/
EC4R	Desire to stay	0.65	0.81	0.58	1.174
EC5R					1.372
EC6R					1.327
IWB1	Idea generation	0.70	0.83	0.62	1.456
IWB2					1.562
IWB3					1.259
IWB4	Idea promotion	0.61	0.83	0.71	1.225
IWB5					1.225
IWB7	Idea realisation	0.80	0.88	0.71	1.607
IWB8					1.754
IWB9					1.719
EP1	Employee performance	0.74	0.84	0.57	1.874
EP2					1.195
EP3					1.567
EP4					1.548

Source: The authors’ research.

applies to the analysis of the reflective construct.

These metrics are crucial for assessing the quality and validity of the measurement model in the PLS-SEM method, ensuring that the constructs are reliably and accurately measured. Cronbach’s alpha represents a measure of internal consistency or reliability of a set of indicators on a scale. In the context of PLS-SEM, it evaluates how well a set of indicators measures a latent construct. Values range between 0 and 1, and a value above 0.6 is considered acceptable, although values above 0.8 are preferable ([91], p. 7). Based on the lower limit of acceptable values, it can be concluded that the defined criterion is met, as Cronbach’s alpha values range from 0.61 (Idea promotion) to 0.8 (Idea realization). Composite reliability considers the different loadings of indicators on a latent construct, providing a more nuanced assessment. Based on the lower limit of acceptable composite reliability of 0.7 [86], it can be concluded that the composite reliability criterion is met, as all indicators record composite reliability values above 0.7, with values ranging from 0.81 (Desire to stay) to 0.9 (Identification). Average Variance Extracted represents a measure of the amount of variance explained by a latent construct about the amount of variance due to measurement error. A desirable AVE value is 0.5 or higher, meaning that the construct explains more than 50% of the variance in its indicators. Based on the lower limit of acceptable Average Variance Extracted of 0.5 [92], it can be concluded that the AVE criterion is met for all observed values. Values range from 0.570 (FWAs–Family) to 0.82 (Identification). The Variance Inflation Factor (VIF) is a measure used to detect multicollinearity among independent variables in a model. In the PLS-SEM method, it is used to check whether the indicators are highly correlated, which could distort the results. A VIF value below 3.3 [90] is generally considered acceptable, indicating low to moderate multicollinearity. (/) means that there is only one item, but this is relevant for analysis. The obtained results indicate that all indicators recorded a VIF < 3.3, and the criterion is met. After assessing the reliability of the measurement model, the analysis of discriminant validity follows, using the Heterotrait-Monotrait (HTMT) criterion and the results are presented in

Table 4. Discriminant validity–results of HTMT criterion.

Variable Name	Idea Generation	Extra Effort	Desire to Stay	Identification	Employee Performance	Idea Promotion	Idea Realization	FWAs-Family
Extra effort	0.068
Desire to stay	0.067	0.269
Identification	0.122	0.614	0.453
Employee performance	0.109	0.271	0.142	0.221
Idea pormotion	0.774	0.024	0.173	0.166	0.132
Idea realization	0.602	0.09	0.107	0.237	0.08	0.571
FWAs-Family	0.081	0.159	0.15	0.272	0.284	0.07	0.102
FWAs-Job	0.076	0.064	0.345	0.233	0.291	0.161	0.082	0.53

Source: The authors’ research.

.

Voorhees et al. [93] emphasize that HTMT is used to assess discriminant validity by comparing the average correlations between indicators of different constructs (heterotrait) with the average correlations between indicators of the same construct (monotrait). A threshold of 0.9 is highlighted ([88], p. 79). Based on the obtained HTMT results, it can be concluded that discriminant validity, as measured by HTMT, is satisfied. The next analysis focuses on testing the structural model to evaluate the research hypotheses. The structural model was tested using bootstrapping analysis, and the results are presented in

Table 5. Results of bootstrapping analysis.

H	Relationship (Direct and Mediation Role)	β	St. Dev.	T Stat.	p	Hypothesis
H1	Flexible work arrangments → Innovative work behavior	0.03	0.036	0.909	0.364	rejected
H2	Flexible work arrangments → Employee performance	0.24	0.04	5.998	0	accepted
H3	Flexible work arrangments → Employee performance	0.23	0.04	5.723	0	accepted
H4	Flexible work arrangments → Employee performance → Innovative work behavior	0.04	0.012	2.867	0.004	accepted
H5	Flexible work arrangments → Employee performance → Employee performance	0.04	0.014	2.569	0.01	accepted

Source: The authors’ research.

.

The obtained research results of direct and indirect relationships indicate that there are no statistically significant relationships between flexible work arrangements and employees’ innovative work behavior (β = 0.03; T = 0.909; p = 0.364). However, there are statistically significant relationships between flexible work arrangements and employee commitment (β = 0.24; T = 5.998; p = 0) and positive statistically significant relationships between flexible work arrangements and employee performance (β = 0.23; T = 5.723; p = 0). Full mediation is present as the indirect effect of flexible work arrangements on innovative work behavior through employee commitment is significant (β = 0.04; T = 2.867; p = 0.004). Partial mediation is present as the indirect effect of flexible work arrangements on employee performance through employee commitment is significant (β = 0.04; T = 2.569; p = 0.01). These relationships are presented in Figure 2.

Kock and Hadaya [94] emphasize that R² in PLS-SEM measures the explained variance of the dependent variable that can be attributed to the independent variables in the model. In other words, R² shows how much of the variation in the dependent variable can be explained by the model, i.e., by the predictors (latent constructs or indicators) included in the model. The R² results indicate that changes in employee commitment are caused by 5.6% of flexible work arrangements, while the remaining 94.4% are due to other unexplored factors. Changes in innovative work behavior are caused by 2.5% of flexible work arrangements, with the remaining 97.5% being attributed to unexplored factors. Changes in employee performance are caused by 9.3% of flexible work arrangements, with the remaining 90.7% being attributed to unexplored factors. The examined model includes a combination of formative and reflective constructs, which can influence the interpretation of the R² values. Specifically, the formative construct of flexible work arrangements does not necessarily have high correlations with other latent variables, given that it measures different aspects that collectively shape the effect of flexibility, rather than their mutual similarities. Additionally, the model is complex and includes the mediating role of employee commitment, which further reduces the expected R² values in the direct relationships between flexible work arrangements and outcomes such as innovative work behavior and employee performance. Although the R² values are low, this result is not uncommon in social sciences, especially when analysing complex relationships that involve interdependent and mediating effects. A low R² may indicate that outcomes such as innovative work behavior and employee performance are shaped by many other factors not covered by our model. This finding is important as it highlights the need for further research and the identification of additional factors that could explain a greater variance in these outcomes. The reliability of the results can be further confirmed through the stability of statistical indicators and the theoretical foundation of the model. Although the R² values are low, our findings are consistent with previous research, which has also shown that innovative work behavior and employee performance depend on a wide range of factors.

5. Discussion

The first three hypotheses examined the direct effects of flexible work arrangements on employee commitment, innovative work behavior, and employee performance. The results showed that flexible work arrangements have a statistically significant direct effect on employee commitment and performance, while the effect on innovative work behavior was not statistically significant, leading to the rejection of this hypothesis. These findings are consistent with previous research, which confirmed the positive impact of flexible work arrangements on employee commitment [2,63,64,65,66,67] and employee performance [72,73,74,75,76,77]. In analyzing the mediating role of employee commitment, it was determined that employee commitment fully mediates the relationship between flexible work arrangements and innovative work behavior, while partial mediation is confirmed in the relationship between flexible work arrangements and employee performance. These findings suggest that flexible work arrangements may indirectly enhance innovative work behavior through increased employee commitment, while their impact on employee performance occurs partially through commitment.

These results have significant implications for both practice and theory. The research results showed that flexible work arrangements positively impact employee commitment and performance through commitment, suggesting that organizations should consider implementing flexible work arrangements as a strategy to improve these aspects. However, the lack of a statistically significant relationship between flexible work arrangements and innovative work behavior suggests that other factors may play a key role in driving innovation in the work environment. Understanding these dynamic relationships can help organizations better tailor their policies and practices to maximize the benefits of flexible work arrangements.

Flexible work arrangements have the potential to significantly increase employee commitment and performance through greater autonomy and better management of work responsibilities. However, the challenge lies in maintaining innovative work behavior, especially in situations where communication and collaboration suffer due to distance. The key for organizations is to support innovation through technological infrastructure, fostering a culture of innovation, and providing adequate support to employees so they can fully utilize the benefits of flexibility without compromising creativity.

The positive impact of flexible work arrangements on employee commitment and performance can be achieved by providing greater autonomy to employees. For example, flexible work allows employees more control over their working hours and tasks, which fulfils their need for autonomy. According to the Self-Determination Theory, a sense of autonomy increases employees’ intrinsic motivation, leading to greater commitment to the organization. Flexible arrangements help employees achieve a better balance between their personal and professional lives. When employees have less stress from obligations outside of work, their commitment to work increases, directly contributing to improved performance. When employees have flexibility, they feel valued and motivated to give their best. A sense of control over the work environment and trust from management can increase their productivity and overall performance.

Although flexible work increases commitment and performance, it can have negative effects on innovative work behavior due to reduced communication and collaboration. Accordingly, flexible work can reduce daily interactions between employees as well as opportunities for the spontaneous exchange of ideas. Innovations often stem from collaboration, and distance can limit creative exchanges and brainstorming. Additionally, the isolation of employees working remotely can negatively impact them, reducing their sense of involvement in organizational innovation processes. Innovative ideas often come from informal interactions and face-to-face discussions. The lack of such opportunities can limit employees’ ability to be innovative.

Factors that can influence this negative effect include better technical support (providing tools for effective communication such as video conferencing, and online collaboration platforms, which can reduce the sense of isolation and enable employees to continue communicating effectively and sharing ideas), and organizational culture (creating an innovation culture where employees are supported and encouraged to share their ideas, even in a virtual environment, can neutralize the negative impact of flexible work on innovation).

Employee commitment plays a crucial mediating role between flexible work arrangements and employee behavior, such as innovative work behavior and employee performance. Greater commitment leads to better performance; when flexible work increases employee commitment, they are more willing to put in extra effort, which improves their performance. Although flexible work may reduce opportunities for innovation, if employees are highly committed, there is a greater chance they will continue to seek ways to contribute to innovation. Commitment can encourage employees to overcome obstacles such as distance or lack of direct collaboration in the innovation process. HR sustainability is significantly influenced by employee commitment, which plays a mediating role in the relationship between flexible work arrangements and employee behaviors, such as innovative work behavior and employee performance. When employees experience higher levels of commitment due to flexible work conditions, they are more likely to engage in innovative practices and exhibit stronger performance. This suggests that fostering employee commitment through well-designed flexible work arrangements not only enhances individual productivity but also promotes sustainable management of human resources, driving long-term organizational success and innovation.

6. Conclusions

The analysis of the mediating role of employee commitment in the relationship between flexible work arrangements and employee behavior (innovative work behavior and employee performance) was conducted to assess the significance of this mediating role and the importance of implementing flexible work arrangements, especially since this conceptual framework has not been extensively explored, either globally or in Serbia, and is considered to have significant scientific contributions. The analysis was conducted using SmartPLS software, where PLS-SEM analysis confirmed that flexible work arrangements have a statistically significant direct impact on employee commitment and employee performance. This suggests that providing flexibility in the work environment can positively influence employee engagement and job performance.

However, while flexible work arrangements have a positive impact on employee commitment and performance, the study did not find a statistically significant impact on innovative work behavior. This finding may indicate that flexibility alone is not sufficient to foster innovation, and additional factors, such as organizational culture and support for creativity, are needed to enhance innovation. The analysis showed that employee commitment plays a fully mediating role in the relationship between flexible work arrangements and innovative work behavior. This means that flexible work arrangements can improve employees’ innovative behavior through increased commitment. On the other hand, employee commitment partially mediates the impact of flexible work arrangements on employee performance, suggesting that commitment has a significant, but not complete, role in this relationship. The study included a sample of 582 employees who are mostly highly responsible, predominantly younger, and highly educated. This demographic characteristic may influence the relations of examined variables, as different groups of employees may have varying reactions to flexible work arrangements. This research is significant because it provides insight into how flexible work arrangements influence employee commitment and how commitment, in turn, affects innovative work behavior and employee performance. Understanding these relationships can help organizations better design their work arrangements to enhance employee engagement and performance while recognizing the limitations of flexibility in promoting innovation.

Čiarnienė, Vienažindienė, and Adamonienė [54] emphasize that employers should consider implementing flexible work arrangements as a strategy to improve employee commitment and performance. Sretenović, Slavković, and Stojanović-Aleksić [95] emphasize that companies should adapt their organizational culture and learn how to lead virtual teams in an adequate way. Flexibility can increase employee engagement and satisfaction, which can contribute to better employee performance [77]. However, it is important to remember that flexible work arrangements are not the only factor in fostering innovation. Additional initiatives, such as training in creative thinking and providing resources for exploring new ideas, should be developed to further enhance innovative behavior [96]. Recommendations for employees include actively utilizing the advantages of flexible work arrangements to improve their job performance and balance between work and personal life. Understanding the role of commitment in these dynamic relationships can help both employers and employees in effective implementation of flexible work arrangements to improve the work atmosphere and achieve better business outcomes [97,98]. Also, employee commitment can be seen as an equivalent to employer brand loyalty [99]. Recommendations for small businesses regarding the implementation of flexible work arrangements (FWAs), their significance, and the mediating role of commitment in the relationship between FWAs and employee behavior are varied. One recommendation is focused on the application of a personalized approach. Flexible work in small businesses can be more easily implemented due to less hierarchy and closer relationships between management and employees. Businesses can tailor arrangements to each employee, which increases their commitment and innovation. The suggestion is to conduct an analysis of the needs of both the business and the employees and to design an FWA model that is most justified from the perspective of both the business and the employees. Since the system is smaller and more flexible, it is easier to change the current situation. The second recommendation is focused on the application of a hybrid model. Small businesses can use hybrid work models, where employees partially work remotely and partially from the office. This way, they maintain a high level of coordination and collaboration, while also providing flexibility. Recommendations for large companies focus on structural flexibility, where large companies can invest in sophisticated tools for monitoring performance and facilitating remote collaboration. This can enable flexible arrangements on a larger scale but requires clearly defined policies and procedures. Another suggestion is directed towards the formalization of FWAs, where formal policies on flexible work arrangements are key to ensuring that all employees have equal opportunities. This also reduces the possibility of misuse or a sense of inequality among employees. Special attention should be given to employee-driven practices such as flexitime and teleworking, while maintaining the decision-making process within the company and redesigning the hybrid model. As for specific industries, we can highlight the IT and creative industries, where flexible work is often standard due to the high level of individual work and the need for creativity. Flexibility encourages innovation and increases satisfaction. In contrast, in manufacturing industries where physical presence and coordination are necessary, flexible work may be more challenging. However, flexible schedules or shift work can be introduced to balance the demands of the job with employees’ private lives.

The connection to sustainability is reflected in the fact that flexible work arrangements can contribute to the long-term sustainability of organizations by increasing employment, reducing workforce turnover, and fostering innovation. Committed and satisfied employees are more likely to improve processes and practices that contribute to sustainability through their behaviors and ideas. In this way, our research provides insights into strategies that can help organizations sustainably manage their human capital, enhance business outcomes, and promote innovations that are key to sustainability in a dynamic business environment.

Recommendations for future research include the analysis of various industries and cultures to determine whether specific industries or cultural factors influence the effectiveness of flexible work arrangements, conducting long-term research, especially longitudinal studies, and increasing the number of respondents in specific segments.

The limitations of the study are focused on the sample and the analysis conducted only within the territory of one country. The sample primarily consists of highly educated, specialized, or managerial employees, which does not represent the broader workforce in Serbia. This limits the generalizability, as it excludes lower-skilled employees who might experience flexible work differently. However, it is found that FWAs like flextime and teleworking, and compressed working week, are more often offered to more highly educated employees and employees in higher positions [100]. It would be beneficial to perform a comparative analysis with other countries, particularly those in Central and Eastern Europe, that share relatively similar national cultures. Long-term research could lead to different findings. The study did not include contextual factors, like cultural or industry-specific variables, that may influence the relationships, and other organizational factors, such as organizational culture, leadership style, or industry dynamics, that could affect the relationship between flexible work arrangements, employee commitment, and behavior, reducing the study’s relevance across different organizations.