Variable work schedules, unit-level turnover, and performance before and during the COVID-19 pandemic.

Abstract

The use of variable work schedules (VWS)-altering the number and timing of employees' work hours on a daily or weekly basis-is an increasingly common human resource (HR) practice designed to increase staffing flexibility. Little research, however, has examined whether and how the use of VWS affects an organization's turnover rates and/or financial performance at the unit level. Despite the common assumption that their use helps firms achieve higher performance by matching the supply of labor to demand fluctuations-especially during a crisis such as coronavirus disease (COVID-19)-this study demonstrates otherwise. I propose that greater use of variable schedules can lead to higher turnover rates and that this effect has been more pronounced during the pandemic. I also argue that managerial reliance on VWS can decrease not only the level of financial performance but also performance recovery during the pandemic-with unit-level turnover as the mediating mechanism. Using data from 1,678 units of a U.S. quick-service restaurant chain across different phases of the COVID-19 pandemic (October 2019-December 2020), I find support for these predictions. Results suggest that scholars and practitioners should reconsider the general assumption that staffing flexibility helps organizations adapt to uncertain environments. (PsycInfo Database Record (c) 2022 APA, all rights reserved).