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IntroductionA systematic review is conducted in the study to investigate the relationship between telework and organizational economic performance indicators such as self-reported employee performance, organizational performance, actual employee turnover rates, or intentions.Methods The databases Scopus, Business Source Premier, and Web of Science were used to conduct a literature search. Original articles published from 2000 and up to May 2021 were selected. Studies were screened for inclusion independently by review pairs and data were extracted. The Mixed Methods Appraisal Tool (MMAT) was used to evaluate the quality of the studies included.ResultsForty-three studies were included with some addressing multiple outcomes. Self-reported performance was higher for teleworking employees compared to those working in the ordinary workplace. The extent of the change in performance was dependent on individual characteristics and the extent of the teleworking practice in the organization. Telework was also associated with increased organizational performance, particularly in homogenous samples with unique work tasks. When telework is voluntary, it appears that both actual employee turnover rates and intentions to leave the organization are lower.DiscussionFurther research with high-quality prospective designs is necessary to properly understand the contribution of telework to organizational economic performance indicators.
TYPE Systematic Review
PUBLISHED 21 December 2022
DOI 10.3389/fpsyg.2022.1035310
Kittisak Jermsittiparsert,
University of City Island, Cyprus
Kulwadee Lim-u-sanno,
Prince of Songkla University, Thailand
Wei Zhang,
University of British Columbia, Canada
Jean Paolo Lacap,
City College of Angeles, Philippines
Sup Amornpinyo,
Khon Kaen University, Thailand
Nath Amornpinyo,
Udon Thani Rajabhat
University, Thailand
Emmanuel Aboagye
This article was submitted to
Organizational Psychology,
a section of the journal
Frontiers in Psychology
RECEIVED 02 September 2022
ACCEPTED 28 November 2022
PUBLISHED 21 December 2022
Mutiganda JC, Wiitavaara B, Heiden M,
Svensson S, Fagerström A,
Bergström G and Aboagye E (2022) A
systematic review of the research on
telework and organizational economic
performance indicators.
Front. Psychol. 13:1035310.
doi: 10.3389/fpsyg.2022.1035310
©2022 Mutiganda, Wiitavaara, Heiden,
Svensson, Fagerström, Bergström and
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not comply with these terms.
A systematic review of the
research on telework and
organizational economic
performance indicators
Jean Claude Mutiganda1,2, Birgitta Wiitavaara3,
Marina Heiden3, Sven Svensson3, Arne Fagerström1,
Gunnar Bergström3,4 and Emmanuel Aboagye3,4*
1Department of Business and Economic Studies, University of Gävle, Gävle, Sweden, 2School of
Business and Economics, Discipline of Accounting and Control, Åbo Akademi University, Turku,
Finland, 3Department of Occupational Health Sciences and Psychology, Faculty of Health and
Occupational Studies, University of Gävle, Gävle, Sweden, 4Unit of Intervention and Implementation
Research for Worker Health, Institute of Environmental Medicine, Karolinska Institutet, Stockholm,
Introduction: A systematic review is conducted in the study to investigate
the relationship between telework and organizational economic performance
indicators such as self-reported employee performance, organizational
performance, actual employee turnover rates, or intentions.
Methods: The databases Scopus, Business Source Premier, and Web of
Science were used to conduct a literature search. Original articles published
from 2000 and up to May 2021 were selected. Studies were screened for
inclusion independently by review pairs and data were extracted. The Mixed
Methods Appraisal Tool (MMAT) was used to evaluate the quality of the studies
Results: Forty-three studies were included with some addressing multiple
outcomes. Self-reported performance was higher for teleworking employees
compared to those working in the ordinary workplace. The extent of the
change in performance was dependent on individual characteristics and
the extent of the teleworking practice in the organization. Telework was
also associated with increased organizational performance, particularly in
homogenous samples with unique work tasks. When telework is voluntary, it
appears that both actual employee turnover rates and intentions to leave the
organization are lower.
Discussion: Further research with high-quality prospective designs
is necessary to properly understand the contribution of telework to
organizational economic performance indicators.
telework, employee turnover, systematic review, organizational economic
performance, employee perceived performance
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Teleworking refers to working in a place outside the
ordinary workplace where time flexibility or not can occur
(Allen et al., 2015). Teleworking is a component of remote
work practices, providing employees with greater freedom to
alternate between the ordinary workplace and outside locations,
mostly via the use of information and communications
technology (ICT). While not a new phenomenon, teleworking
increased significantly during the COVID-19 pandemic when
organizations implemented intensive home-based teleworking
in response to the global COVID-19 lockdowns and other
pandemic related restrictions (EU-OSHA, 2021). Significant
human resource management difficulties, including, but not
limited to, where people should perform their tasks in small and
large organizations occurred during the pandemic. Home-based
teleworking was highly recommended for employees who could
work remotely from home under the COVID-19 pandemic.
Before the pandemic struck, most organizations and
employees were largely unprepared for shifts toward
teleworking. Over half of EU workers lacked any prior
teleworking experience (EU-OSHA, 2021). According to the
Eurofund (2020), telework is most common in the Scandinavian
countries, accounting for 38 and 33% of the workforce in
Denmark and Sweden, respectively. Other EU countries with a
high proportion of teleworkers include the Netherlands (31%),
Luxembourg (29%), the United Kingdom (27%), France (26%),
and Estonia (25%). This shows that telework agreements are
more popular in the north and west of Europe, however there
are notable outliers, such as Germany, with 13% below the
EU average, and Estonia, with 24% above it. The data also
showed variation in teleworking rates by occupation and socio-
occupational category since some occupations are not suited
to telework, for instance those in construction, hospitality,
and personal services. When the COVID-19 pandemic spread
widely rapidly, organizations whose work could be done from
the outside of the regular workplace implemented broad use
of telework to keep their business operations running while
avoiding the virus’s spread at work (Eurofund, 2020).
Prior to the pandemic, many employees had formal or
informal agreements with their employers to work from home
or another location. During the pandemic, much changed,
resulting in a shift from direct presence or face-to-face
supervision of work to full-time telework forms in which most
work functions were conducted via technology or platform-
based ICT in many businesses (Eurofund, 2021). Whether
these changes would have occurred “organically” if COVID-
19 had not broken out, and whether these changes will
remain post COVID-19, especially now that the restrictions
have been removed remains an open question in tele-workable
sectors and occupations. An increasing number of organizations
are debating whether to continue with teleworking, such as
home-based telework or other hybrid teleworking forms i.e.,
part-time in the office, part-time at home or some other
location (Neeley, 2021). However, there is limited empirical
research on the question of what teleworking means for
organizational economic performance indicators i.e., outcomes
that are measured and managed by organizations because
they are important to their success. Previous studies provide
ambiguous insight into organizational economic performance
indicators for employees and organizations and therefore does
not help management to understand whether telework makes
economic sense and how it can be embedded in appropriate
human resources management practices. An understanding of
what telework implies for management is critical to ensuring
that any future, more permanent modifications to teleworking
regulations benefit both employees and the organization.
Teleworking is generally linked to several metrics
of importance to the organization’s bottom line namely,
employee performance and productivity, absenteeism, turnover,
commitment, and overall organizational performance (Bailey
and Kurland, 2002;Tietze et al., 2009;de Menezes and Kelliher,
2011;Allen et al., 2015;Kazekami, 2020). From previous
research, the relationship may be positive yet inconclusive
on employees’ perceptions and other performance reports
(Samek Lodovici, 2021). In previous reviews, there was little
unambiguous proof that telework increased organizational
financial outcomes, yet teleworking is generally considered
to promote productivity, decrease turnover, and improve
organizational performance (Bailey and Kurland, 2002;
Gajendran and Harrison, 2007;Harker Martin and MacDonnell,
2012). As in previous reviews, the evidence from de Menezes and
Kelliher (2011) did not demonstrate a business case for the use of
flexible work arrangements (FWAs). According to de Menezes
and Kelliher (2011), employees in FWAs may have access to a
variety of flexible or non-standard work arrangements, such
as choice over when work is completed, work away from the
ordinary workplace, working full-time hours in fewer days, or
reduced work hours. Some studies argue that a more inclusive
approach to employee and organizational outcomes, as well
as comparison groups, gender issues, different appreciation of
workspace and time, and high-quality methodological designs,
are necessary to make sense of the contradictory evidence of
organizational economic performance outcomes attributable
to telework alone (Tietze et al., 2009;De Ruiter and Peters,
2022). This suggests that knowledge of FWAs i.e., work away
from the ordinary workplace and whom it works for, and
in what circumstances the practice works including different
categories of occupations and individual workers characteristics,
is needed. This review presents up-to-date knowledge based
on high-quality studies about how telework is associated with
organizational economic performance outcomes.
The purpose of this study is to compile and synthesize
the findings of previous studies on the relationship between
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telework and organizational financial outcomes in terms of self-
reported employee performance, organizational performance,
actual employee turnover rates or intentions. The review seeks
to answer two main research questions: (1) How is telework
related to employees’ self-reported measures such as work
or job performance, productivity, work content execution,
effectiveness, turnover intentions, etc.? and (2) How is telework
related to objective organizational performance indicators
including sales, added value, actual turnover, productivity, etc.?
The two primary contributions of this study are as follows:
(1) Using data from relatively high-quality research, this
review study assesses the evidence of an association between
telework and productivity based on employees’ self-reported
performance or organizational records as well as actual turnover
or intentions considering variations between businesses. The
review study provides a comprehensive review that focuses
on varied teleworking arrangements and the consequences on
different organizational financial outcomes. (2) Because of the
thorough information provided in some of the original research,
the review study identifies some of the probable factors that are
associated with organizational financial losses due to telework
by occupation, albeit some of these factors may be shared by
all occupations.
Materials and methods
Study design
A systematic review was conducted, which is a step-by-
step approach to synthesizing the findings of multiple primary
research studies (Fink, 2019). This systematic review study
adheres to the preferred reporting guideline for systematic
review and meta-analysis (PRISMA) guidelines (Page et al.,
The PEO framework
The PEO (i.e., population, exposure, and outcome)
framework was used for the present search. The PEO as a
framework can be especially useful when investigating the
prospects of developing a certain outcome because of an
exposure, as well as assist in focusing the review process and
identifying searchable parts of a research question (Schardt
et al., 2007).
The population consisted of individuals working in
organizations whose working arrangements for employees
included flexible work locations. As a result, studies investigated
included employees working in organizations who are allowed
to work in a place outside the ordinary workplace (such as
home-based telework or virtual or distant or remote work,
where time flexibility or not can occur). Studies which had
investigated organizational-level outcomes in relation to flexible
work location practices were also included in this review.
This definition of telework arrangement is used—a work
practice that involves members of an organization substituting
a portion of their typical work hours (ranging from a few
hours per week to nearly full-time) to work away from the
ordinary workplace—principally from home—using technology
to interact with others as needed to conduct work tasks
(Shockley and Allen, 2007). Central to the definition is that work
can be performed outside of the traditional temporal and/or
spatial boundaries of the ordinary workplace (including full-
time work from home but not necessarily limited to home-
based work) and includes work from home-based businesses.
Because of the nature of the exposure under consideration,
this review covers research with a variety of designs, including
intervention studies.
Organizational economic performance indicators
investigated in this study include financial performance
(when referring to return on investments or profitability, cost-
saving practices) and performance indicators (when referring
to self-reported performance, productivity, and turnover). The
term performance is of high economic interest to organizations
and can be measured in terms of perceived actual or potential
increase or decrease in work output i.e., employees’ perception
of their own performance, or in relation to their colleagues’ or
the employer’s assessment. For some organizations, the actual
or the potential performance on a specific task at the individual
level are aggregated at the team and/ or organizational level to
represent productivity or the value created from the resources
available (Tangen, 2005). Employee turnover which refers to
employees leaving the organization must be lowered to keep
acceptable performance levels. Performance and employee
turnover can be major weapons for organizations to achieve cost
and quality advantages over their competitors (Tangen, 2005).
Literature search
Together with an information specialist, we formulated a
systematic, documented literature search strategy to identify
relevant literature based on the PEO framework. The search was
conducted in two waves in collaboration with an information
specialist. The first was a test search, which was performed in
November 2020, aiming to identify, refine, and focus the search
terms. The test search was performed in six databases: Scopus,
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PubMed, Emerald, Business Source Premier, Academic Search
Elite, and Web of Science. The second search in May 2021
was a final search conducted across three databases: Scopus,
Business Source Premier, and Web of Science. These three
databases were preferred because they are multidisciplinary and
cover a wide range of research fields, they allow for free-text
searches, and they provide access to some of the databases
used in the first search. The literature search covered studies
published from 2000 through and until May 2021. The search
string is available in the Supplementary material 1. The search
resulted in a total of n=6,067 articles. After excluding
duplicates, a total of 4,239 articles were left to be examined
(Figure 1).
Study records
All relevant studies were compiled in Endnote or Mendeley
reference managers. The records were saved in PDF format for
full text reading and subsequent quality assessment, as well as to
permit independent screening and cataloging of discrepancies
amongst reviewers.
Inclusion and exclusion
The main criteria for inclusion and exclusion of literature
which were defined in advance were as follows:
1. The population of the study should be clearly described
and relevant, i.e., the research should concern organizations
whose working arrangements allow work from a different
location than the employer’s workplace through ICT
and the employees working in such organizations. Self-
employed workers or business owners were not included.
2. The exposure investigated should be clearly described,
measured and relevant, i.e., the working conditions in
which it is allowed for a degree of flexibility and
interaction between workers doing their work tasks that
can be performed outside of the ordinary workplace
context, including but not limited to home-based work or
remote work.
3. Studies that examined non-specific collective concepts
such as “flexible work arrangements” or unspecified
workplace were not considered relevant as it is difficult to
assess what the actual work location is in such cases.
4. Studies that focus only on the traditional temporal
flexibility such as flextime and organizational practice of
functional flexibility that requires employees to work from
the central office were excluded.
5. The investigated outcome should be clearly described,
measured and relevant, i.e., including but not limited to
financial performance (such as return on investments or
profitability, cost-saving practices e.g., rent cost reductions,
sales, etc.) and non-financial performance indicators
(such as self-reported performance, employer quality
assessment productivity, organizational-level performance,
and turnover).
6. The study should examine the link between telework
practice and organizational economic outcomes at the
employee or organizational level.
7. The study should be an original study, published
in English, peer-reviewed, containing quantitative or
qualitative data and published between 2000 and May 2021
in a scientific journal.
8. Knowledge summaries and systematic reviews, as well as
theoretical articles that did not analyze their own data,
opinions, study protocols, articles that only contained
abstracts, student dissertations, and other gray literature,
were all excluded.
Study selection
The assessment of relevance of the articles obtained from
the systematic literature search was carried out in two selection
rounds, based on the predefined inclusion and exclusion criteria.
The first selection round was based on the article’s title and
abstract. The full text of articles that were considered relevant
were read through in the next selection round to determine
whether they were relevant to include in the subsequent quality
assessment. In total of 4,243 articles were evaluated using the
title and abstract. There was n=10 of the 4,243 articles
that could not be retrieved at first, so these were sought,
and all were eventually found for inclusion in the screening
process. Following the screening, n=4,082 records were
eliminated, leaving n=161 for further consideration. Of the n
=161 reports evaluated for eligibility, n=106 were excluded
due to the following reasons: duplicates (n=3), no data
presented (n=23), incorrect outcome described (n=36),
incorrect exposure described (n=22), and research question
posed was unrelated to review (n=22). The n=55 articles
left after exclusion were split in three portions, where two
researchers in each group read the articles separately, and
thereafter discussed their evaluation to reach agreement on
inclusion (see Figure 1). In the results section, only moderate
to high-quality studies were included in evidence synthesis
Each article was evaluated by two researchers independently.
The individual researcher’s assessment was hidden from
each study until two researchers had evaluated it, so that
the researchers were not initially affected by each other’s
assessments. This ensures independent assessments of each
article. After full text evaluation, n=55 articles were considered
to meet the inclusion criteria. These were then quality assessed.
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PRISMA flowchart of study selection process.
Data extraction and quality assessment
Ideally, data extraction should be completed in duplicate
by two independent reviewers. In this review study, however,
it was not practical. Thus, one reviewer extracted data, and
another independently verified the results for accuracy and
completeness. Based on the review objectives and research
question, the data extraction and synthesis were carried out
using rigorous processes that facilitate transparency of reporting
on the characteristics of the included studies.
Two researchers independently assessed the quality of each
article. The Hong et al. (2018) version of the Mixed Methods
Appraisal Tool (MMAT) was used to assess the methodological
quality of the included articles. The MMAT is a methodological
quality appraisal tool that is designed for the quality assessment
stage of systematic mixed studies reviews, i.e., reviews that
include qualitative, quantitative, and mixed methods studies. It
allows for the evaluation of the methodological quality in five
categories: qualitative research, randomized controlled trials,
non-randomized studies, quantitative descriptive studies, and
mixed methods studies.
The MMAT contains two screening questions for all sorts
of research designs to identify whether a study is empirical and
hence the MMAT may be used. Based on study design type
for each included study, the appropriate category of studies
to appraise is chosen and a rating of criteria “Yes, “No, or
“Can’t tell.” The “Can’t tell” response category means that the
paper does not report adequate information to answer “Yes” or
“No.” In this review, the reviewers agreed to convert “Can’t tell”
response category to “No, since no information or inadequate
information were provided in the study.
The MMAT discourages reviewers from calculating an
overall score from the ratings of each criterion since an overall
score may not always be informative. Instead, it suggests
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providing a more detailed presentation of the ratings of each
criterion to better inform the quality of the included studies.
For instance, the quality of the study can be described in stars
() or percentages (%). For example, if a study receives five
stars on each criterion, it could be interpreted as 100%, four
stars equal 80%, three stars equal 60%, two stars equal 40%, and
one star equals 20% quality criteria met. For this review study,
the results of the appraisal were interpreted using arbitrary
categories to help description of study quality. This study used
three categories (i.e., low, medium, and high) to clearly describe
included studies. Studies with five stars (one star for each
criterion) were assessed to be of high quality, while those with
three to four stars were of moderate quality and those with two
stars or less were of low quality.
This review includes a total of 55 articles, with several
studies containing more than one outcome. Four of the 55
studies were performed across countries, with the rest coming
from different countries, with U.S. (20 studies), Australia
(five studies), the U.K. (five studies), Japan (three studies),
and China (two studies). Canada, Germany, Finland, Ireland,
Portugal, Spain, Italy, Belgium, South Africa, and Iran each had
one study. The vast majority (67%, n=37) were published
between 2015 and 2021. The research covered private companies
and public organizations in the banking and manufacturing
sectors, information technology, healthcare and life insurance,
government agencies, travel agencies, and other knowledge-
intensive occupations. More than half (60%, n=33) investigated
perceived employee performance, 29% (n=16) investigated
objective organizational performance indicators, and 18% (n
=10) investigated actual employee turnover and turnover
intentions. In the Supplementary material 2: Characteristics
of the included studies on telework and their comparator
are provided. For details on the number of studies divided
into study population, key outcome measure, findings, and
quality assessment for the different study designs, see Tables 1
3. In the Supplementary material 3: The quality assessment
ratings (i.e., the ratings of each criterion of MMAT) for
the final 55 studies are provided. The next sections present
the findings from studies of moderate to high quality (n
Telework and perceived productivity/job
A total of 20 studies examined the relationship between
teleworking and employees’ or managers perceived
productivity and/or job performance (Table 1). Except for
one randomized study (Sherman, 2020), almost all the
studies described in this section were quantitative descriptive
or non-randomized i.e., mostly descriptive, or analytical
cross-sectional studies.
Generally, supervisors and employees who could voluntarily
work from home rated their perceived performance higher
than those who worked from the employer’s premises.
Studies conducted on home-based office during the COVID-
19 pandemic show perceived work productivity drop during
the COVID-19 pandemic (Feng and Savani, 2020;Morikawa,
2020;Kitagawa et al., 2021). Sherman (2020) randomized
study, conducting analysis for different subgroups, shows
that teleworking enhanced job performance considerably for
most subgroups, with female employees (mothers) benefiting
the most. In their quasi-experimental study, Delanoeije and
Verbruggen (2020), the users of telework reported slightly
higher day-level performance on teleworking days but there
were no significant differences in person-level performance
between the users and non-users of telework.
Nine studies with cross-sectional designs (Hill et al.,
2003;Golden and Veiga, 2008;Vega et al., 2014;Gajendran
et al., 2015;De Menezes and Kelliher, 2016;Medina-Garrido
et al., 2017;Golden and Gajendran, 2018;Narayanamurthy
and Tortorella, 2021;Tsukamoto, 2021) found that telework
was positively associated with high productivity or better
job performance. However, telework was shown not to be
associated with any substantial improvement in productivity
or job performance in three studies (Hyland et al., 2005;
Aguilera et al., 2016;Bao et al., 2022). In van der Lippe
and Lippenyi (2020) study, the findings show that when
more coworkers work from home, employee and team
performance can be negatively impacted, but team performance
tends to deteriorate the most. This implies that when
coworkers do not work from home, team performance
appears to improve, pointing to the interconnections of group
and individual tasks. Informally negotiated remote working
practice or access to flexi-place had positive indirect effects
on employee performance through commitment, and job
satisfaction (De Menezes and Kelliher, 2016;Medina-Garrido
et al., 2017).
In unpacking the role of voluntary teleworkers’ job
characteristics, studies investigating social job characteristics
such as job interdependence, social support, and superior-
subordinate relationships in an extensive telework mode found
high levels of job performance in low levels of interdependence,
low levels of social support, and high quality superior-
subordinate relationships than employees who worked a limited
amount in telework mode (Golden and Veiga, 2008;Golden
et al., 2008;Golden and Gajendran, 2018). Knowledge job
characteristics such as job complexity and problem solving show
a positive relationship between telework and job performance,
but most importantly, the extent of telework explained job
performance, which ranged from benign to positive (Golden and
Veiga, 2008;Golden et al., 2008;Golden and Gajendran, 2018).
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TABLE 1 Findings from studies on telework and self-reported performance or productivity.
References Population/organization type Key outcome
Findings Rating
Quantitative randomized controlled trials
Sherman (2020) Abcam PLC life sciences company, England.
n=187 employees.
Employees’ job
Telework improve job performance
especially for mothers
Quantitative non-randomized studies
Bao et al. (2022) Large IT firm, China. Four thousand records
of n=107 developers.
Productivity e.g., the
number of
Developers Working from home have
similar productivity to those working
Delanoeije and
Verbruggen (2020)
Construction and property development
firm, Belgium. n=78 (39 each in
intervention and control group)
Person-and day-level job
No differences in person-level
performance, but day-level performance
was higher for telework users.
De Menezes and
Kelliher (2016)
Four organizations in the professional sector,
e.g., pharmaceutical, banking, etc., UK. n=
2,617 employees
Individual performance Remote working has positive indirect
effects on performance.
Feng and Savani
US resident fulltime employees, USA. n=
286 fulltime employees
Perceived work
Women’s perceived work productivity
dropped when working from home
during the COVID-19 pandemic
Gajendran et al.
Employers and employees, a wide assortment
of organizations, USA. n=323 employees
and n=143 matched supervisors
Task performance Telecommuting positively associated
with task performance
Golden et al. (2008) Large high-tech company, USA. A matched
sample of n=261 professional-level
teleworkers and their managers
Job performance Extensive teleworking in isolation
negatively impacts performance
Golden et al. (2008) Large high-tech company, USA. n=375
professional-level virtual employees
Job performance Extensive virtual mode workers have
higher job performance
Golden and
Gajendran (2018)
Supervisors and employees, a single
organization, USA. n=273 telecommuters
and their supervisors
Job performance Telecommuting had a positive
association with job performance
Hill et al. (2003) IBM, USA. Traditional office, n=4,316,
virtual office, n=767, and home office, n
Job performance,
productivity, workload
Virtual/home office appear to positively
impact performance
Hyland et al. (2005) Eight private and public organizations,
Ireland. n=172 employees from different
Employee performance Telework had no connection with
Kitagawa et al.
Four chemical and automobile
manufacturing companies, Japan. n=
22,815 employees
Perceived productivity Home-based work leads to a
productivity decline
et al. (2017)
Employees of banking sector, Spain. n=
1,511 employees
Job performance Flexi-place indirectly related to
performance through wellbeing
Morikawa (2020) RIETI Sur vey of Corporate Management and
Economic Policy, Japan. n=3,324 sample
was mainly used
Perceived productivity Home-based work productivity was
lower during the COVID-19
and Tortorella
Multiple organization sectors, UK. n=
106 employees
Employees’ performance
(i.e., output quality and
Home-based office enhances output
quality and delivery
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TABLE 1 (Continued)
References Population/organization type Key outcome
Findings Rating
Ralph et al. (2020) Survey of software developers, multi-country
study. n=2,225 usable responses from
53 countries.
Perceived productivity Lower perceived productivity from
home-based work
Tsukamoto (2021) Survey of workers in the general population,
Japan. n=908 respondents
Productivity Telecommuting leads to higher
van der Lippe and
Lippenyi (2020)
Survey of nine EU countries, EU. n=869
teams and 11,011 employees from
259 establishments
Task performance,
individual and team
Home-based work negatively impacts
coworker performance
Vega et al. (2014) U.S. government organization, USA. n=
180 employees
Job performance Teleworkers report higher levels of job
Quantitative descriptive studies
Aguilera et al.
SMEs, France. n=940 responses from
representative sample of residents of
the Brittany
Perceived productivity No association between home-based
work and perceived productivity
Telework and objective organizational
performance indicators
Seven out of 15 studies (Kitou and Horvath, 2007;Patti,
2014;Bloom et al., 2015;Ruostela et al., 2017;Choudhury
et al., 2020;Zhang et al., 2021), showed positive benefits of
telework on objective organizational performance (Table 2).
According to Bloom et al. (2015) findings, worker productivity
rose in the telework group compared to the control group
without affecting the level of quality of work. Choudhury et al.
(2020) study exploiting a natural experiment found that working
form anywhere as opposed to home resulted in an increase
in employee output, with no increase in rework. However,
according to their model, all telework programs, whether from
home or anywhere, increase productivity incrementally when
compared to working in the office. In Zhang et al. (2021)
study, small businesses performed better overall in states with
higher work-from-home rates when industry-specific variations
were considered, along with local economic, demographic, and
policy factors. In Giovanis (2018) study, using an instrumental
variable approach in a prospective design, responses from the
management or their representatives indicated a significant
positive relationship between telework and financial and
labor performance.
A few of the studies that show positive results on
organizational indicators also investigated outcomes like
space usage, occupancy costs, fuel and energy costs, and
environmental costs. The studies found that as telework
programs and frequency increased, environmental performance
might improve, which would benefit businesses by lowering
workplace costs (Kitou and Horvath, 2007;Ruostela et al.,
Four studies found negative impacts of telework on
organizational performance (Lee and Hong, 2011;Kotey and
Sharma, 2019;Neirotti et al., 2019;Monteiro et al., 2021). In
the Lee and Hong (2011) study, telework programs performed
significantly worse than other family-friendly initiatives like
childcare subsidies, paid leave for caregiving, and flexible
work schedules. Kotey and Sharma (2019) study found that
working from home has a direct negative association with
return on labor. According to the Neirotti et al. (2012) study,
organizations that use telecommuting practices and operate in
more dynamic business environments while also adopting a
higher rate of information systems observe productivity gains
compared with labor productivity when teleworking from home.
This suggests that home-based telework is less productive than
the type of teleworking that involve telecommuting strategies.
The Monteiro et al. (2021) study found that, except for R&D
organizations, where working remotely benefits the organization
in terms of performance indicators, there is a significantly
negative association between remote access and productivity.
Four studies found that telework was not related with any
significant gain in organizational performance (St George et al.,
c and Mari´
c, 2019;Viete and Erdsiek, 2020;Rocha
et al., 2021).
Telework and intentions to leave/stay or
actual turnover rates
Eight studies examined the association between different
aspects of telework and intentions to leave or actual turnover
rates (Table 3). Two of the studies had longitudinal designs
(Caillier, 2016;Choi, 2020), one quasi-experiment design
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TABLE 2 Findings from studies on telework and objective organizational performance/ productivity.
References Population/organization type Key outcome
Findings Rating
Quantitative randomized controlled trials
Bloom et al. (2015) Travel agency, China. n=249 randomized
call center employees
No. of phone calls Home working led to performance
Quantitative non-randomized studies
Choudhury et al.
Patent and Trademark Office, USA. n=831
patent examiners
Total actions, rework Work from anywhere resulted in
increase in the total number of actions
Giovanis (2018) Management, random workplaces, G. Britain
Panel data set for workplaces, with
11,500–16,000 observations
Workplace performance;
two alternative measures
financial performance
and labor productivity.
Positive relationship between telework
and performance
Kotey and Sharma
Public, private, and non-profit organizations,
Australia. n=4,204 employees
Return on labor Work from home reduced return on
Lee and Hong
Federal agencies, USA. n=105 employees Proportion of met or
exceeded annual
performance indicators
Telework has a negative association with
Monteiro et al.
Large Portuguese firms (>250 employees),
Portugal. 4,726 firm-year observations
Sales per employee Working remotely is more likely to be
harmful for productivity
Neirotti et al. (2012) Different Italian firms from industry groups,
Italy. n=1,134 companies included.
Value added per
Home-based telework do not exhibit
higher labor productivity than “mobile
Patti (2014) Health and Life Insurance Company, USA n
=342 Insurance processors and examiners
and n=45 managers
No. of claims processed
and examined
Teleworking increased productivity and
lowered office expenses
Rocha et al. (2021) Firms in Cyprus, Georgia, Greece, Italy,
Moldova, and Russian Federation. n=3,864
firms included
Sales growth No overall statistically significant effect
of telework, more positive effect on
firms with greater growth
Ruostela et al.
Managers, salespeople and consultants in a
production company, Finland n=
52 employees
Space usage, occupancy
costs, environmental
New ways of working are cost saving
and improves environmental
St George et al.
Department of Human Services, Australia. n
=13 telenursing call operators
Quality of advice, risk
incidents, no. of phone
Working from home is positive for no.
phone calls and had no statistically
significant effect on quality and risk
Viete and Erdsiek
German service firms, Germany n=
1,045 observations
Sales Work from home did not statistically
significant affect sales.
Zhang et al. (2021) Survey of small businesses, USA. n=
8,399 observations
Operating revenue,
disruption of supply
chain, business closures,
cash flows
Higher home-based work rates
positively influence operating revenue,
disruption of supply chain and cash
flow, no effect on business closures
Quantitative descriptive studies
Kitou and Horvath
Simulated scenarios based on national data,
USA. Simulated data from the n=81
literature and surveys
Energy and fuel costs,
external costs related to
air emissions
Telework programs reduce energy and
fuel costs in the office space
c and Mari´
Large-sized organizations, Croatia. n=171
organizations, HR managers surveyed
Return on assets, return
of equity, revenue per
No statistically significant effect of
telework or home-based work
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(Lee and Kim, 2017) and the remainder had a descriptive
or analytical cross-sectional designs (Hyland et al., 2005;
Golden, 2006;Caillier, 2011;Masuda et al., 2012;Dilmaghani,
In Lee and Kim (2017), telework eligibility had a positive
association with intention to stay. Dilmaghani (2021) study
found no differences in the intentions to leave between male
teleworkers and non-teleworkers, but female workers who
teleworked in addition to having access to flexible working
hours were less likely to consider changing jobs the following
year compared to those who only teleworked. Golden (2006)
found a weak, yet significant, negative association between the
proportion of telework time per week and turnover intentions
fully mediated by exhaustion. This study suggests that telework
might reduce work exhaustion, which in turn reduce intentions
to leave. According to Hyland et al. (2005) and Masuda et al.
(2012), employees who frequently use telework and have a
strong preference for segmented work and home roles showed a
weak positive correlation with turnover intentions. Two studies
using data from different years within the same organizational
context, i.e., the US federal government, found that telework, or
satisfaction with the potential to telework either had no impact
on actual turnover intentions or reduced it (Caillier, 2016;Choi,
2020). Two of the studies found that teleworkers and non-
teleworkers reported similar intentions to quit or no association
between telework availability/eligibility and turnover intentions
(Caillier, 2011).
This review searched and analyzed the body of existing
research to clarify the relationship between telework and critical
self-reported and objective economic performance indicators at
the individual and organizational level.
In general, employees and managers who could choose
to telework rated their perceived performance higher than
those who were required to work on the employer’s premises,
but to a differing extent. Employees working from home
appear generally to have higher levels of self-reported job
performance and productivity (Tsukamoto, 2021), as well as
perform better on an objective creative assignment (Vega et al.,
2014), than those working in an office. However, different
types of work-family policies, such as flexible work location
(flexi-place), may be indirectly related to employee performance
mediated by employee wellbeing (Medina-Garrido et al., 2017),
family-work conflict (Sherman, 2020), social interactions with
managers and family members (Neufeld and Fang, 2005),
employee preference for work segmentation (Hyland et al.,
2005), and virtual connection technologies (Narayanamurthy
and Tortorella, 2021).
Similarly, depending on the prevailing work-related
circumstances and characteristics of the employees, type and
size of the task, telework could be perceived differently as either
having positive or negative associations with performance
(Bao et al., 2022). This suggests that the performance metric
used by studies varied considerably, which results in diverse
findings among the studies included. Further, research on
telework during the COVID-19 pandemic found a perceived
decline in work productivity. Employees perceived that they
were less productive during the COVID-19 pandemic, which
could be expected considering the lack of childcare, inadequate
technology, and other amenities (Ralph et al., 2020).
In this review, studies indicated beneficial impacts of
telework on organizational performance typically among
homogenous samples (e.g., call center operators) with unique
work tasks (St George et al., 2009;Patti, 2014;Bloom et al.,
2015;Choudhury et al., 2020). Studies that showed negative
or no impact of telework, on the other hand, were more
likely to cover different types of organizations and rely on
more general organizational economic performance measures.
In the study by Monteiro et al. (2021), which found both
negative (small firms) and positive (R&D firms) association
between remote access (as a proxy for telework) and sales, it
was suggested that the association depended on the type of
activities performed by the organizations. For instance, small
businesses did not engage in exporting and hired workers
with lower levels of skill. Similarly, Zhang et al. (2021) study
reported a substantial variation in the effect of home-based work
across industry sectors. Hence, there is not uniformity in the
literature with respect to factors associated with productivity in
home-based or teleworking organizations (OECD, 2020). The
different conclusions arrived at by the studies might not be
caused by the type of activity only. There could be reasons such
as nature of work (Boell et al., 2016), technology availability
(OECD, 2020), industry type (Monteiro et al., 2021), tasks
(Bao et al., 2022), sufficient communication with colleagues
and managerial support (Coenen and Kok, 2014), and other
social-health-psychological factors such as commuting time
and interruptions (Kazekami, 2020), social and professional
isolation (Felstead and Henseke, 2017), affecting employees
in different ways, which can negatively impact employee and
organizational productivity.
According to the studies reviewed, using telework or being
eligible to telework could determine whether employees stayed
with the company or left it (Caillier, 2016;Choi, 2020). Although
the conclusions were fairly consistent, most of the findings
showed weak and non-significant associations from studies with
methodological issues, such as evaluating data without taking
into account people who are nested in multiple countries and/or
organizations (Masuda et al., 2012); using non-random sampling
or cross-sectional designs in which exposure and result were
gathered simultaneously. Further, although some studies clearly
state that turnover rate is defined as the number of employees
who left the company during the year divided by the average
number of employees over that time multiplied by 100, it
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TABLE 3 Findings from studies on telework and intentions to leave or actual turnover rates.
References Population/organization type Key outcome
Findings Rating
Quantitative non-randomized studies
Caillier (2011) Federal Government employees, USA. n=
263,475 federal government employees
(considering leaving
organization within the
next year, yes/no)
Teleworkers and non-teleworkers
reported similar intentions to quit
Caillier (2016) Federal Government employees, USA. n=
144 observations from 36 agencies
Actual turnover rates Telework had no impact actual turnover ***
Choi (2020) Federal Government employees, USA. n=
428 observations from 143 sub-agencies of
federal government
Voluntary turnover
(register data)
Higher proportions of teleworkers
reduced the rates of voluntary turnover.
Dilmaghani (2021) Canadian General Social Survey, Canada. n
=7,446 observations from nationally
representative data
(considering leaving
organization within the
next year, yes/no)
Female teleworkers had lower turnover
Hyland et al. (2005) Eight public and private organizations,
Ireland n=172 employees from
different organizations
Turnover intentions A weak, non-significant, positive
association between telework and
turnover intentions
Lee and Kim (2017) Federal Government employees, USA. n=
194,739 federal employees
Intention to stay Telework eligibility has positive
association with intention to stay
Masuda et al. (2012) Managers of organizations, 15 countries
(Asian, American, and Latin American
country clusters) n=3,918 managers from
15 countries
Turnover intentions No association between telework and
turnover intentions.
Golden (2006) Large internet solution corporation, USA n=
393 employees
Turnover intentions More teleworking weakened turnover
is unclear whether it was voluntary leave, involuntary leave,
temporary hires, or temporary leaves that were used in the
estimate. Some work and employee characteristics that influence
intentions to quit or stay include employees who were denied the
opportunity to telework, i.e., no eligibility to telework, despite
their personal preferences for segmented work and telework
(Hyland et al., 2005), the amount of telework time per week
(Golden, 2006), and home roles due to gender (Hyland et al.,
2005;Dilmaghani, 2021). This suggests that it is the possibility
to choose the optimal mix of telework and office hours based
on one’s preferences, rather than teleworking per se, which
motivates employee’s intentions to stay or leave the organization.
More studies in different work contexts are required to confirm
these associations.
Home-based or hybrid telework might have had
implications for organizational productivity during the
pandemic. According to Batut and Tabet (2020), during the
pandemic, home-based or hybrid teleworking was heavily
reliant on high-quality supervision and managerial support
(e.g., by providing ICT infrastructure or training, ergonomics),
which were critical for positive teleworking experiences
and productivity. The findings of this review suggest that
individual and organizational outcomes in telework were
not only associated with the supportive management style
(Choi, 2020), and type of job/ industry (Zhang et al., 2021;
Bao et al., 2022), but also the work set-up and experience of
employees during the pandemic (Morikawa, 2020;Rocha et al.,
2021;Tsukamoto, 2021). As earlier pointed out, some studies
conducted during the pandemic indicated negative association
of telework with individual and organizational outcomes, such
as, self-rated performance (Feng and Savani, 2020;Mirela,
2020;Morikawa, 2020;Kitagawa et al., 2021), organizational
performance (Ralph et al., 2020;Monteiro et al., 2021), and
employee turnover (Dilmaghani, 2021). Other studies also
conducted during the pandemic found no significant change
in individual and organizational outcomes due to telework
(Chapman and Thamrin, 2020;Dixit et al., 2020;Moretti et al.,
2020;Viete and Erdsiek, 2020). More studies on telework
supervision and management, type of job/industry, telework
intensity before and after the pandemic might better contribute
to the understanding of difference in organizational economic
performance indicators.
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Telework influences on organizational
policies and practices
Telework has become a solution for people at different
stages in their lives, when they may be studying, bringing
up a family, or growing older, or it can simply match
their individual preferences by letting them decide when and
where to work. Employees seem to be willing to choose
this form of work since it improves their working and
social lives by easing work constraints and yielding gains
in autonomy over their own affairs. However, there are
pros and cons, in particular the cost-benefit trade-off for
organizations and employees practicing telework (Golden,
Likely, widespread teleworking in the long-term has
implications for self-reported performance, productivity, and
intention to stay or leave the organization. Working outside of
the ordinary workplace may be challenging for both employee
and organization, especially in the aftermath of the COVID-
19 pandemic. Many high-profile businesses want to accept this
flexible work future to attract employees, and many employees
are striving to spend as little time in the workplace as possible—
and others are planning to leave employers who are averse to
working from anywhere, at least for now. To maximize the
gains inherent in the use of more widespread telework from the
perspective of the employer and employee, organizations could
promote investments in its physical apparatus (i.e., workspace,
ICT, and home office ergonomics) and enhance the relation
between managers and employees who choose this work form.
Uninterrupted ICTs are critical in allowing employees who
prefer to telework from home or anyplace to engage in work
activities (Eurofund, 2020). In the post-COVID-19 era, targeted
public policies related to productivity gains from teleworking
can be beneficial to both private and public organizations
(OECD, 2020). Public policies and co-operation among social
partners (i.e., employers, employees, and other stakeholders)
are crucial to ensure that new, efficient, and welfare-improving
working methods emerging after the pandemic can be developed
and maintained as conventional forms of telework practices.
A comparison of how different work venues (e.g., traditional
office, virtual office, and home office) influence aspects of work
and organizational outcomes were considered in the reviewed
studies. The review findings suggest that there is a potential
for continual teleworking in terms of self-reported performance
and organizational economic performance indicators, which
could be obtained from the best combinations of different
flexible working arrangements. For instance, Yamashita et al.
(2022) observed impaired work functioning among employees
who preferred and teleworked four or more days a week
compared with those who almost never teleworked. Although
this review did not investigate closely the topic of frequency or
intensity and preference for telework, it would be interesting
to study whether frequency/intensity of telework in relation
to preference for it has any significance for organizational
performance. Organization (i.e., either private or public) may
need to evaluate their employees’ needs to be flexible and
accommodating, especially if they wish to recruit and retain a
diverse workforce by finding the sweet spot of flexible working
arrangements combinations.
Strength and limitations of the review
This review has several advantages. The systematic review
process allows for a qualitative description of included studies
to uncover gaps and provides a basis for clear findings
through a thorough search of existing published literature on
the topic. This review is based on the findings of studies
moderate to high quality studies. Low-quality studies were
excluded from the evidence synthesis. This notwithstanding
would not affect the conclusion drawn for employee turnover
and self-reported performance outcomes. There were no low-
quality studies on the objective outcome of organizational
performance. In comparison to previous reviews, this article
addresses a broader range of employee and organizational
outcomes, gender issues, and different perceptions of traditional
temporal and/or spatial work practices, allowing for a more
nuanced assessment of the relationship between telework
and organizational economic performance outcomes. However,
some limitations of the study should be mentioned. Most of the
included studies were cross-sectional non-experimental study
designs, precluding inferences of causality. Thus, the studies
do not provide information on whether telework is the cause
of performance/productivity changes or decision to stay on
the job or leave. To our knowledge, only a few studies have
adopted a true experimental methodology in a field setting and
have found positive effects of telework on turnover intentions
and work performance (Bloom et al., 2015;Sherman, 2020).
Many studies also lack generalizability. It may be difficult,
for example, to generalize findings from a study of younger
employees to older employees, or to generalize findings from
certain organizations, because the organization type determines
how performance can be measured and the tasks performed in
the different organizations differ. This is especially important
in job performance research since various work performance
levels fluctuate with industry type. The studies’ methodological
limitations, as well as substantial heterogeneity in organizations
and work tasks, definitions of telework as well as comparison
work forms, the different ways organizational outcomes were
measured, complicate a general, overall conclusion. This implies
that the quality of evidence on the relationships between
organizational economic outcomes and telework should be
interpreted reasonably.
After selecting all relevant studies, the critical and
constructive analysis of the quality of the studies were
performed using the MMAT. The MMAT is a critical appraisal
Frontiers in Psychology 12
Mutiganda et al. 10.3389/fpsyg.2022.1035310
tool that was developed for use in systematic mixed studies
reviews (i.e., reviews combining qualitative, quantitative and/or
mixed methods studies). The MMAT has been criticized for not
being thorough enough for evaluating mixed methods studies
(O’Cathain, 2010), however other reviews of critical appraisal
tools found the opposite (Crowe and Sheppard, 2011). In the
present study, we excluded 12 studies with low quality (i.e., two
stars or less). Although the cut-off points for low, moderate, and
high quality were arbitrary, they were valuable for qualitative
assessment, and we have described in detail how the appraisal
results were interpreted and applied in the review.
Several studies found that telework is associated with
increased perceived job performance and organizational
performance particularly in homogenous samples with unique
work tasks. When telework is voluntary, it appears that both
actual employee turnover rates and intentions to leave the
organization are lower. Further research on the implementation
and evaluation of effective work forms including but not limited
to home-based telework and hybrid telework is needed to
understand their contribution to self-rated performance and
organizational economic performance indicators. High-quality
prospective studies are clearly needed in the future. This
effort will contribute to the knowledge on how to organize
and implement such working arrangements in a way that
is beneficial and sustainable for employees, organizations,
and society.
Data availability statement
The original contributions presented in the study are
included in the article/Supplementary material, further inquiries
can be directed to the corresponding author.
Author contributions
EA contributed to formal analysis, visualization,
writing—original draft preparation, supervision, and project
administration. All the authors agree to be accountable for the
content of the work, contributed to data curation, screening,
and selection of articles for this review, and contributed to
conceptualization, methodology, investigation, resources, and
writing—review and editing. All authors contributed to the
article and approved the submitted version.
Financial support to conduct this project came from
the Swedish Research Council for Health, Working life and
Welfare—(Forte) with reference number: Ref. No. 2019-01257.
The authors are very grateful to the Swedish Research
Council for Health, Working life and Welfare—(Forte) for the
financial support to this project.
Conflict of interest
The authors declare that the research was conducted in the
absence of any commercial or financial relationships that could
be construed as a potential conflict of interest.
Publisher’s note
All claims expressed in this article are solely those of the
authors and do not necessarily represent those of their affiliated
organizations, or those of the publisher, the editors and the
reviewers. Any product that may be evaluated in this article, or
claim that may be made by its manufacturer, is not guaranteed
or endorsed by the publisher.
Supplementary material
The Supplementary Material for this article can be
found online at:
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Frontiers in Psychology 15
... The increasing diffusion of remote work, both full-time or in hybrid (both at-home and in-office) models, has generated significant interest among scholars and practitioners in understanding its impacts on employee productivity, work-life balance and organizational performance (Mutiganda et al., 2022, Vartiainen, 2021, Haridas et al., 2021. In this study, we put on the foreground hybrid work's relevance and value comprehensively. ...
... In the aftermath of this exceptional socio-economic and healthy crisis, remote working, especially in its hybrid forms, such as smart working, is expected to become the new normal, being the preferred model or organizing individual and teamwork for many organizations worldwide (Errichiello & Pianese, 2022). As a result, understanding the impacts of these work arrangements has become a critical area of inquiry for researchers across multiple disciplines, including information systems, social sciences, and management (Mutiganda et al., 2022). In this respect, it is important to increase our understanding of the challenges faced by individuals and organizations in the transition to the "new normal" of work and identify the pillars to establish a conductive working from home environment (Waizenegger et al., 2023). ...
Full-text available
Deciphering Hybrid Work: An Ensemble Community Detection Network Bibliometric Analysis of Remote Work’s Impact on Individual and Organizational Outcomes
... The increasing diffusion of remote work, both full-time or in hybrid (both at-home and in-office) models, has generated significant interest among scholars and practitioners in understanding its impacts on employee productivity, work-life balance and organizational performance (Mutiganda et al., 2022, Vartiainen, 2021, Haridas et al., 2021. In this study, we put on the foreground hybrid work's relevance and value comprehensively. ...
... In the aftermath of this exceptional socio-economic and healthy crisis, remote working, especially in its hybrid forms, such as smart working, is expected to become the new normal, being the preferred model or organizing individual and teamwork for many organizations worldwide (Errichiello & Pianese, 2022). As a result, understanding the impacts of these work arrangements has become a critical area of inquiry for researchers across multiple disciplines, including information systems, social sciences, and management (Mutiganda et al., 2022). In this respect, it is important to increase our understanding of the challenges faced by individuals and organizations in the transition to the "new normal" of work and identify the pillars to establish a conductive working from home environment (Waizenegger et al., 2023). ...
... On the other hand, working from home without physical contact with other work colleagues can lead to feelings of social isolation and perceived threats to professional advancement [8,10]. Organizations may expect better productivity, better employee health, and greater wellbeing when the implementation of telework is planned thoughtfully and intentionally [7,11]. ...
Full-text available
The study aimed to investigate managers’ perceptions of telework in relation to the work environment and the performance of their organizations. It was grounded on interviews with 17 managers from public and private organizations in Sweden using a phenomenographic research approach. The managers had experience in leading employees who teleworked, and their contact information was provided by the organizations. The results showed that managers perceived that telework led to more focus on delivery at work. When telework enabled working undisturbed and getting more work done, employees started to question the need to come to the workplace. Further, some employees changed their behaviors at the workplace; they tended to close their office doors to avoid distractions. Others valued social activities when working at the workplace. Managers also reported that telework could make small close-working teams even closer, but they could lose contact with others outside the teams. In addition, telework led to quicker but less informed decisions, which may benefit productivity in the short term but not in the long term. The findings of the study highlight managers’ perspectives on the consequences of telework in an organization, which is important for maintaining organizational sustainability.
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The coronavirus disease 2019 (COVID-19) pandemic has impacted the world economy in various ways. In particular, the drastic shift to telework has dramatically changed how people work. Whether the new style of working from home (WFH) will remain in our society highly depends on its effects on workers’ productivity. However, to the best of our knowledge, the effects of WFH on productivity are still unclear. By leveraging unique surveys conducted at four manufacturing firms in Japan, we assess within-company productivity differences between those who work from home and those who do not, along with identifying possible factors of productivity changes due to WFH. Our main findings are as follows. First, after ruling out the time-invariant component of individual productivity and separate trends specific to employee attributes, we find that workers who worked from home experienced productivity declines more than those who did not. Second, our analysis shows that poor WFH setups and communication difficulties are the major reasons for productivity losses. Third, we find that the mental health of workers who work from home is better than that of workers who are unable to work from home. Our result suggests that if appropriate investments in upgrading WFH setups and facilitating communication can be made, WFH may improve productivity by improving employees’ health and well-being.
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During the COVID-19 pandemic, many firms began operating in a working-from-home environment (WFH). This study focuses on the relationship between WFH and small business performance during the pandemic. We built a theoretical framework based on firm profit maximization, compiled an up-to-date (March through November) real-time daily and weekly multifaceted data set, and empirically estimated fixed-effect panel data, fractional logit, and multilevel mixed effects models to test our hypotheses. We find that in states with higher WFH rates, small businesses performed better overall with industry variations, controlling for the local pandemic, economic, demographic, and policy factors. We also find that WFH rates increased even after stay-at-home orders (SHOs) were rescinded. With the ready technology and practice of WFH in the pandemic, our robust empirics confirm our theory and hypotheses and demonstrate WFH as a potential force that may expedite “creative destruction” instance and permanently impact industrial structure and peoples’ work lives. Plain English summary The Rise of Working from Home (WFH) as a Silver Lining and “Creative Destruction” in the Pandemic: WFH Helps Small Businesses Perform Better with Industry Variations and Continues to Shine after Stay-at-Home Orders Ended. This study focuses on the role of working from home (WFH) for small business performance during the COVID-19 pandemic. We built a theoretical framework based on firm profit maximization and identified WFH as a rational business choice. We then compiled a real-time multifaceted data set, estimated panel fixed-effect, fractional logit, and multilevel mixed effects models, and find that (1) small businesses in states with higher WFH rates performed better with industry variations, controlling for local pandemic and socioeconomic factors; and (2) WFH rates increased after stay-at-home orders were rescinded. Our study demonstrates WFH as a potential “creative destruction” force that may expedite our technologically ready WFH adoption and permanently impact industrial structure and peoples’ work lives.