Employees’ Performance in the Sabah Public Service: The Role of Flexible Work Arrangements, Work-Life Balance, and Job Satisfaction

Employees’ Performance in the Sabah Public Service: The Role of Flexible Work Arrangements, Work-Life Balance, and Job Satisfaction

Mohd Allif Anwar Abu Bakar^1*, Norhayati Aliju¹, Saizal Pinjaman¹, Sharifah Milda Amirul¹,Sunita Dasman²

¹Faculty of Business, Economics and Accountancy, University Malaysia Sabah, Jalan UMS, 88400 Kota Kinabalu, Sabah, Malaysia

²Faculty of Economy and Business, Universitas Pelita Bangsa, Jl. Inspeksi Kalimalang Tegal Danas, Cikarang Pusat, Bekasi, West Java, Indonesia

^*Corresponding author

DOI: https://dx.doi.org/10.47772/IJRISS.2025.908000255

Received: 04 August 2025; Accepted: 09 August 2025; Published: 05 September 2025

ABSTRACT

This study investigates the impact of flexible work arrangements (FWAs) and work-life balance (WLB) on employee performance (EP) within the public sector in Sabah, Malaysia, utilising the Theory of Planned Behaviour (TPB). Data were collected from 190 respondents across various ministries and agencies under the Sabah government. Using IBM SPSS, the findings revealed that both FWAs and WLB significantly enhance employee performance, with job satisfaction serving as a crucial mediating factor. The findings underscore the importance of FWAs and WLBs in improving employee performance and suggest that policymakers should prioritise these initiatives. Public sector employees view FWAs and WLBs as essential to their job satisfaction, which in turn positively influences their performance. The study highlights the need for organisations to strengthen and implement such practices to foster a more engaged and productive workforce.

Keywords: employees’ performance, flexible work arrangements, job satisfaction, work-life balance

INTRODUCTION

Employee performance is a fundamental determinant in achieving organisational objectives. It is frequently conceptualised as the value of various employee behaviours that contribute positively to the attainment of organisational goals [1]. Organisational success sometimes depends on maintaining a motivated and productive workforce, necessitating the need for employers to address employees’ expectations and well-being. One critical aspect influencing employee performance is the adoption of flexible work arrangements (FWAs) and the promotion of work-life balance (WLB), which have garnered increasing attention worldwide [2].

The growing demand for FWAs, including remote work, part-time employment, and adjustable work schedules, is evident in developed economies such as the United States and European nations [3]. Furthermore, studies indicate that neglecting WLB can result in diminished productivity, job dissatisfaction, and heightened turnover rates [4]. The inability to achieve a balanced work-life dynamic has been linked to adverse outcomes such as stress, burnout, and job dissatisfaction [5]. On the other hand, studies suggest that effective WLB policies contribute to increased productivity and organisational commitment [2]. Previous studies emphasise that a well-structured WLB policy contributes to reduced stress, improved job satisfaction, and enhanced employee commitment [6]. Moreover, organisations that prioritise WLB are associated with increased job retention and workplace satisfaction [7].

Recognising this trend, policymakers and organisations have introduced measures to enhance workplace flexibility. For instance, in Sabah, the state government has implemented the Staged Working Time Improvement (Waktu Bekerja Berperingkat) under the Sabah State Public Officers Regulations 2008, Rule 325(1)(b), aligning its working hour policies with the Federal Circular (Service Circular No. 4/2017) [8] [9]. Despite these initiatives, rigidity in work arrangements remains a persistent issue among public sector employees in Sabah [10]. Employees often struggle to balance work responsibilities and personal obligations, leading to stress and decreased well-being [11]. The inflexibility of work arrangements poses a significant challenge to employees in the Sabah public sector. Many workers experience difficulties in harmonising professional and personal responsibilities due to rigid work schedules [12].

Despite the introduction of FWAs in various Malaysian public sector organisations, there is limited empirical evidence on how FWAs and WLB influence employee performance, particularly in the context of the Sabah public sector, where unique cultural and administrative factors may shape these relationships. The challenge is heightened by the scarcity of research examining job satisfaction as a mediator in the relationship between FWAs, WLBs, and employee performance. Previous research has established that WLB significantly influences job satisfaction and employee retention [13]. However, there is a lack of empirical evidence addressing whether job satisfaction mediates the relationship between FWAs, WLB, and employee performance within the context of the Sabah public sector. Nonetheless, theoretical underpinnings such as the Theory of Planned Behaviour (TPB) [14] suggest that employees’ attitudes towards work arrangements and WLB policies influence their performance outcomes. Given the increasing emphasis on workplace flexibility and employee well-being, this study seeks to bridge this knowledge gap by examining whether job satisfaction serves as a mediating factor in the nexus between FWAs, WLBs, and employee performance. Given these concerns, this study aims to explore the mediating role of job satisfaction in the association between FWAs, WLBs, and employee performance. Explicitly, the study aims to:

1. To investigate the link between FWAs, WLB, and job satisfaction with employee performance in the Sabah public service.
2. To examine whether job satisfaction mediates the association between FWAs, WLB, and employee performance.

The literature was reviewed, and a research model and hypotheses were developed. Utilising data from a quantitative survey among employees of Sabah State Government agencies, the association between variables was studied and validated using SPSS.

LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT

Flexible Work Arrangement and Employee Performance

The association between FWAs and employee performance has been extensively examined in previous research. Past researchers consistently found a positive correlation between FWAs and improved employee performance [2] [15]. Similarly, FWAs have been found to significantly boost employee performance, improving job satisfaction, retention, and overall productivity [16]. Furthermore, FWAs allow employees greater autonomy over their schedules, leading to higher engagement and motivation [17]. Employees utilising flexible work arrangements also report better work-life balance and job satisfaction, which in turn enhances overall job performance [18]. In a similar perspective, flexible work policies have been demonstrated to positively influence employee well-being, reducing stress and increasing efficiency [19]. In light of this, the study posits the following hypothesis:

H1: Flexible Work Arrangements positively increase employee performance.

Work-Life Balance and Employee Performance

A strong positive association between WLB, happiness, and employee performance has been evident [20]. This corroborates [15], which provides strong evidence that flexible work arrangements, when coupled with demographic considerations, significantly contribute to improving employee performance and promoting a balanced work-life dynamic. Subsequently, Flexible work schedules improve work-life balance, giving employees greater job control and autonomy, and enhancing productivity [21]. This leads us to hypothesise the following:

H2: Work-life balance positively increases employee performance

Job Satisfaction and Employee Performance

Employees given flexibility in their work responsibilities tend to be more satisfied with their jobs, leading to peak performance [22]. Similarly, boosting affective commitment and job satisfaction has been shown to improve employee performance [23]. In the same vein, research in the public sector revealed that job satisfaction directly influenced employee performance [24]. Building on these considerations, the following hypothesis is proposed:

H3: Job satisfaction positively increases employee Performance.

Flexible Work Arrangement and Job Satisfaction

FWAs have also been shown to improve perceived productivity and job satisfaction by providing employees with greater flexibility in managing their work schedules and locations [17]. Nevertheless, employees who utilise various flexible arrangements experience improved work-life balance and greater job satisfaction [18]. Hence, the following hypothesis was posited:

H4: Flexible work arrangement positively increases job satisfaction

Work-life balance and Job Satisfaction

WLB plays a crucial role in enhancing various aspects of the workplace, including employee performance, job satisfaction, organisational commitment, workplace dynamics, stress levels, and overall behavioural outcomes [25]. Work-life balance also significantly enhances job satisfaction and promotes employee retention among millennial professionals in Bandung, Indonesia [13].  Additionally, maintaining a healthy work-life balance also boosts employee productivity and satisfaction [26]. Since WLB is a variable of great importance, the study hypothesised the following:

H5: Work-life balance positively increases job satisfaction

The Mediating Role of Job Satisfaction

An expanding body of research underscores the crucial impact of FWAs on enhancing various employee outcomes, particularly concerning diverse demographic factors. Besides, flexible work balance not only improves employee performance but also contributes to a more balanced work-life dynamic [15]. These findings align with [27] and [28], which demonstrated that flexibility in the workplace helps reduce stress and enhance job satisfaction, leading to a more harmonious and productive work environment. The association between FWAs and employee performance has been widely explored, but much of this research has focused on direct effects. However, an important, yet under-explored, aspect is the potential indirect influence that job satisfaction may have on this relationship. Specifically, it is plausible that changes in the level of FWAs could enhance job satisfaction, which, in turn, might lead to improved employee performance. Given the pivotal role of job satisfaction in shaping motivation, engagement, and overall work outcomes, examining this mediating effect offers valuable insights into how FWAs can drive employee performance more effectively. This line of reasoning implies that job satisfaction serves as a key mediating factor in the influence of FWAs on employee performance. Therefore, the study hypothesises the following mediation model:

H1a: Job satisfaction mediates the effect of flexible work arrangements on employee performance.

Maintaining a healthy WLB not only boosts student learning but also enhances employee productivity and satisfaction [26]. In the contemporary dynamic and diverse workforce, the ability to balance personal and professional responsibilities is crucial, directly influencing job satisfaction and productivity. As a result, this study proposes a mediation hypothesis as follows

H2a: Job satisfaction mediates the effect of work-life balance on employee performance.

Drawing upon the seven (7) hypotheses formulated in the preceding discussion, a research model was developed, as illustrated in Figure 1.

RESEARCH METHODOLOGY

Quantitative methods were utilised in this study. For the record, the Sabah state government employed 20, 271 people [29]. Since most headquarters and all 10 ministries are based in Kota Kinabalu, Sabah, this study will focus on Kota Kinabalu and selected departments or agencies within each ministry. The respondents will be employees from grades 11 to 54, specifically from the Support Group (Grades 11- 40) and the Management and Professional Group (Grades 41-54). These employees are more impacted by performance evaluations compared to top-level management. For this study, the G*Power analysis determined that the minimum sample size was 68 respondents (power = 0.80, α =0.05, f²=0.15 with two predictors). In total, 190 useable samples were successfully obtained. The survey data were collected using measures from the existing literature. Employees rated their responses on a Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree).

RESULTS AND DISCUSSIONS

In this study, all relevant processes of data cleaning and screening procedures have been taken care of. IBM SPSS was utilised to conduct the data analysis. Table 1 presents the demographic characteristics of the respondents. Most respondents are aged 28 – 47, with a higher proportion of females (58.4%). The majority hold a Bachelor’s degree (41.6%) and have 1 – 5 years of service (31.1%). Most respondents earn between RM2,000 – RM3,000 (46.8%) and are married (67.9%). A majority of respondents are married (67.9%), while 32.1% are either single or divorced.

TABLE 1. Respondent’s Profile

In this study, the reliability of the instrument was evaluated using a Cronbach’s Alpha (α) test. All constructs yielded α values exceeding 0.780, indicating that the instruments demonstrate a good and acceptable level of reliability, as it exceeds the threshold of 0.70, except for employee performance (α = 0.668). However, an α value between 0.60 and 0.70 suggests an acceptable level of reliability [30].

Regression

In this study, a one-tailed test at a significance level of 0.05 was used to evaluate the direct effect. A one-tailed test is preferred over a two-tailed test for direct effect analysis, particularly when the hypothesis is directional.

TABLE 2. Direct Effect

Note: EP: employee performance; JS: job satisfaction

Table 2 reported that the direct association between FWA on employee performance showed a positive and significant influence (β = 0.328, t-value = 6.072, p-value < 0.001, thus supporting H1, implying that FWAs significantly and favourably impact Sabah’s public sector employee performance. In this context, employees are more likely to exhibit improved work performance when given the flexibility to determine their work schedules and locations. This synonym with [19] that flexible work schedules encourage and facilitate work-life balance, which lowers stress levels and improves worker well-being. Similarly, employees who feel more inspired, involved, and dedicated to their work could boost output, enhance output quality, and increase task efficiency [15]. A contrasting view by [31] posits that positive correlations with performance and absenteeism are found not in FWAs or stress management training, but in psychological well-being and job satisfaction.

H2 is also supported, given that a significant direct effect was observed between WLB and employee (β = 0.196, t-value = 3.328, p > 0.00). These findings postulated that ideological workers are more likely to excel in their roles when they can maintain a healthy balance between personal and professional responsibilities. Employees who have a healthy WLB are less likely to experience burnout or stress from their jobs, which keeps them motivated, focused, and full of energy. In a similar vein, this argument is also supported where work overload and an imbalance between professional and personal life contribute to stress and burnout, ultimately harming employees’ well-being, productivity, and health [32].

Nevertheless, a significant positive relationship between job satisfaction and employee performance was apparent (β = 0.309, t-value = 5.725, p < 0.001), confirming support of H3. Consistent with most of the previous studies, improvement in employee performance can be observed when they are satisfied with their job. For instance, employee performance is positively and significantly influenced by job satisfaction, and job satisfaction and performance are also positively impacted by the work environment [33]. This indicates that employees who are content in their current roles are more likely to exhibit greater commitment, lower absenteeism, and an increased willingness to go beyond expectations. As a result, their proactive behaviour contributes to increased overall departmental productivity.

Concerning the nexus between flexible work arrangement and WLB on job satisfaction, both H4 (β = 0.216, t-value = 3.032, p < 0.005) and H5 (β = 0.580, t-value = 8.631, p < 0.001) are supported. The acceptance of H4 suggests that higher levels of job satisfaction were demonstrated by employees with more flexibility in their work arrangements. This finding aligns with [16], who emphasise the value of work flexibility as a critical component in raising employee satisfaction and well-being. FWAs tend to contribute to a more supportive and satisfying work environment, which in turn increases overall job satisfaction by meeting individual needs and minimising work-life conflicts. For example, managers in Anglo, Latin American, and Asian countries also evident similar findings where FWAs cultivate cultures of fewer intentions to leave, and less work-family conflict, which ultimately increases their job satisfaction [34].

The R² value of 0.506 in Table 2 signifies that flexible work arrangements, WLB and job satisfaction account for 50.6% of the endogenous variable of employee performance variation, representing substantial predictive accuracy. Correspondingly, variances in the FWAs and WLB contributed to 36.4% in job satisfaction, also implying substantial predictive accuracy. This aligns with [35] guidelines, which classify R² values of 0.02, 0.13, and 0.26 as representing weak, moderate, and substantial predictive accuracy, respectively.

TABLE 3. Indirect Effect

Note: EP: employee performance; JS: job satisfaction

As suggested by [36], mediation analysis was diagnosed using the PROCESS Procedure in SPSS. Researchers should use bootstrapping, when possible, in the PROCESS procedure for SPSS due to its reliability and accurate estimates of moderated mediation effects [37, 38]. Bootstrapping allows researchers to obtain more robust and accurate estimates of the indirect effect even in cases where the sample size is small or the data is not normally distributed [39]. Following the same idea, the study utilised a bootstrapping technique to diagnose a mediation effect. Given that the mediation hypothesis in the study is in a non-directional form, a two-tailed test will be utilised for mediation analysis, with a 0.05 level of significance.

The bootstrapping results in Table 3 indicate that the indirect effect of flexible work arrangements on employee performance through job satisfaction is statistically significant (β = 0.158, 95% CI= 0.053, 0.300). This signifies a mediation in which the indirect effect of CI Bias Corrected does not straddle at zero [37] [38], thus providing support for H1a. Likewise, a significant mediation effect via job satisfaction was evident between WLB and employees (β=0.243, 95% CI= -0.097, 0.416), thus supporting H2a.

TABLE 4. Type of mediation

Note: EP: employee performance; JS: job satisfaction, Sig. significant

The results in Table 4 indicate complementary mediation for both hypotheses, H1a and H2a. These findings proposed that job satisfaction plays a substantial role in transmitting the positive effects of WLB on employee performance.

CONCLUSION, IMPLICATIONS AND RECOMMENDATIONS

This study investigated the link between flexible work arrangements, work-life balance, job satisfaction and employee performance within the public sector of Sabah, Malaysia. The findings yield important theoretical and practical insights, especially concerning the mediating role of job satisfaction. While prior research has explored the effects of FWAs and WLB on employee outcomes, this research specifically investigates these relationships within the unique context of the Sabah public sector. This is crucial, as the effectiveness of such initiatives can be influenced by cultural norms, organisational structures, and the specific demands of public service.  Our findings demonstrate that, even within this context, FWAs and WLB are significantly associated with both Job satisfaction and employee performance, adding to the growing body of knowledge supporting their importance.

This study also offers empirical evidence for the mediating role of job satisfaction in the relationships between flexible work arrangements, work-life balance, and employee performance.  By demonstrating that job satisfaction acts as a mediator through which FWAs and WLB influence employee performance, this research offers a more nuanced understanding of the underlying mechanisms at play. This contributes to a deeper understanding of the Job Characteristics Theory [40] by highlighting the importance of job satisfaction as a mechanism through which favourable job characteristics (flexible work arrangements, work-life balance) influence employee outcomes. Practically, our results suggest that public sector organisations should prioritise the implementation and promotion of flexible work arrangements (FWAs). This study demonstrates that these policies can contribute to a more satisfied and productive workforce.

To successfully implement FWAs, organisations should offer a range of options, including flexible hours, compressed workweeks, and telecommuting, to accommodate employees’ diverse needs and preferences. Additionally, public sector organisations should invest in programs and initiatives that enhance employee well-being and promote WLB. These efforts may include providing resources for childcare, eldercare, and stress management, as well as fostering a culture that values work-life integration. By establishing a supportive work environment that prioritises employee well-being and job satisfaction, organisations can nurture a more motivated, engaged, and productive workforce, ultimately improving the quality of public service delivery.

To maximise the benefits of FWA arrangements, organisations must adopt a holistic approach that integrates policy changes, leadership development, and technological advancements. This integrated strategy creates an ecosystem that supports both employee well-being and organisational success, ensuring that flexible work practices are sustainable and effective in the long term. This study, while offering valuable contributions, acknowledges certain limitations.  Its focus on public sector employees in Sabah, Malaysia, may pose the generalizability of its findings to private sector employees or those in different regions. Future research could broaden its scope by including private sector organisations or other Malaysian states.  Moreover, the cross-sectional design of the study restricts the ability to examine the long-term effects of FWAs on job satisfaction and employee performance. Future studies using a longitudinal design could overcome this limitation and offer deeper insights into the causal relationships between these variables.

Ethnical Consideration

This study was conducted in accordance with ethical principles to ensure the rights, privacy, and well-being of all participants

Conflict of Interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper. This research was not funded by any grant

Data Availability

The data supporting the findings of this study were collected through a survey questionnaire administered to participants

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