The Downside of Too Much Flexibility in the Workplace

Jennifer Deal is a senior research scientist at the Center for Creative Leadership and an affiliated research scientist at the Center for Effective Organizations at the University of Southern California. She is co-author of “What Millennials Want from Work.”

In today’s competitive world, organizations—and leaders—need to be flexible to be able to respond effectively to the demands of both clients and employees.  Employees, in particular, want organizations to be flexible because they want the employment deal that best fits their needs and desires.  Among other things, they want to work when and where they want, to get paid fairly, and to have opportunities to move their careers forward or upward. Organizations have learned that to keep the best and the brightest they need to be creative—and flexible—with regard to what they offer employees, which often leaves much of the employment contract up for negotiation.

This level of flexibility has led to the proliferation of what Denise Rousseau at Carnegie Mellon University calls “idiosyncratic deals,” essentially bespoke employment agreements that are customized to meet individual employees’ needs or desires.  For example, they may get to work at home more often, they may travel less often or more often than peers, they may have more vacation days, or get more international or development opportunities. They may have time set aside during the workday to help in a child’s class or to work on a pet project.

In many ways, this flexibility is good for the organization, the manager and the employee.  The organization gets a good employee who contributes and is happy.  The flexibility afforded by the organization gives the manager the latitude to use different tools to motivate each individual employee in the way that is most effective.  The employee feels as if his or her individual, personal needs are being met. That is all great.

But there are substantial downsides to all of this flexibility—for the organization, for the manager, and even for the individual who believes they are getting what they want.

The organization needs to put in place additional processes to manage all of these different deals, more processes than are required for one standard template of benefits and work rules.  It also has to think about maintaining parity across the organization and all of the different patterns of deals, as well as determining which ones the organization benefits from and which are just a sop to employees’ demands. This is likely to be more costly and time-consuming than just having one deal and being done with it.

The manager may appreciate the latitude to use different tools to motivate each individual employee, but they may find themselves on a slippery slope.  One employee asks for something that pushes the boundaries a bit, then another asks for something that pushes the boundaries in a different way. A marginal performer asks for a deal that had only gone to top performers in the past. At some point it isn’t clear where—or how—to draw the line.  When the manager does determine that the combination of deals is no longer sustainable, they have to figure out how to roll them back without damaging the relationship either with the people who had the deals or with those who are asking for them because everyone else has them.  Eliminating such benefits after they have been provided is likely to result in permanent damage to the relationship between employees, managers and the organization.

While employees get what they need from these deals and feel as if their individual, personal needs are being met, over time they may find out that they’re not getting as much of a deal as they thought they were.  When employees see others getting a deal that they aren’t getting, they might feel as if they are being treated unfairly, even if they have the deal they asked for.  For example, imagine two women doing the same job in different states.  They work on the same team but for different bosses, and over time find out that the first gets to work at home most of the time while the second gets in trouble if she is five minutes late arriving to the office.  The second gets to take time during the day to manage her Etsy business, and the first frequently gets to travel internationally.  As they learn what the other’s arrangements are, they become less satisfied with their own, and more desirous of adding attributes of the other’s deal to their own.

Fundamentally, with idiosyncratic deals comes inconsistent treatment, and inconsistent treatment can result in people feeling as if they are not being treated equitably.  So while flexibility is generally good, it needs to be carefully balanced with consistency so employees feel like they’re being treated fairly.

Many organizations are doing this now by having guidelines, but allowing flexibility within those guidelines—that is, freedom within a framework.  Fundamentally, organizations are more likely to be successful with the idiosyncratic deals they need to offer to keep employees happy when they follow a few guidelines.

Be transparent about what aspects are flexible and what aren’t.  Don’t try to hide what deals have been made and can be made.  Have a framework that gives clear guidance with regard to what the boundaries are, and allow freedom to innovate within that framework.  Don’t make a deal you can’t share, or that you wouldn’t be willing to give to someone else.

Be consistent in what you are requiring of people who are in the same positions.  Even if people have different deals on how they work, they need to have the same requirement when it comes to the work output itself. Employees are more likely to feel they are being treated fairly if they see that everyone is held to the same standard.

Evaluate how well the arrangements are working.  If they aren’t working well, they need to be changed.  If they are, perhaps they deals should become a codified part of the framework.

Idiosyncratic deals have been around for a long time, and as technology continues to provide new ways of working and employees with valuable skills have different needs, these deals will proliferate.  Organizations, managers and employees all benefit when they can be creative with workplace arrangements.  Flexibility is a good thing, as long as it results in deals that are perceived as fair by the employees and leaders, and are manageable for the organization.

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