Career Penalties for Flexible Working: How Organizational Culture Shapes Managerial Decisions

This study explores how organizational factors influence managerial decision-making regarding the career advancement of employees working from home. Despite a large body of research on the new modes of working, a gap persists concerning the role of the organizational context in shaping these dynamics. In this article, we investigate whether managers’ promotion and pay decisions depend on the employee's use of remote work and whether these decisions are moderated by the presence of the ideal worker norms (i.e. high work devotion and centrality) and family-friendly policies (childcare-related and flexible work options) in their work environments. We use data from a choice experiment, which included over 1,000 managers from the United Kingdom. The experiment was run in the second half of 2022, and therefore, this study provides post-pandemic evidence and represents the “new normal” settings. The findings indicate that employees who work fully remotely are less likely to be considered for promotion and a salary increase than on-site workers. This pattern is observed particularly in firms with more demanding organizational cultures, namely those with stronger ideal worker norms and/or fewer family-friendly policies. Importantly, both male and female remote workers experience career penalties, albeit in distinct ways, as both ideal worker norms and family-friendly policies appear important for men, whereas for women, it is primarily the availability of supportive policies that influences outcomes. The findings underscore the significant impact of organizational culture on managerial decision-making, with implications for both theory and practice.