The modern business environment demands greater adaptability, and workplace flexibility has emerged as a critical strategy for improving employee performance, satisfaction, and retention. This paper examines the impact of workplace flexibility on employee productivity in Small and Medium Enterprises (SMEs), focusing on dimensions such as flexible working hours, remote work options, job-sharing, and results-oriented performance evaluation. Drawing upon both primary and secondary data, the study highlights how SMEs can balance flexibility with operational efficiency. Findings indicate that flexible work arrangements contribute to higher job satisfaction, reduced absenteeism, and improved productivity, while also posing challenges in terms of communication gaps and managerial control. The paper concludes that SMEs adopting structured flexibility policies can foster sustainable growth and employee well-being.