Some work is less tied to a schedule that other work and I don’t mind a flex schedule so long as it’s getting done and not causing a bottleneck or holdup. If it’s tied to a schedule and absence would cause a problem then the employee needs to be punctual and not fail to show up without notice. That’s really not too much to expect.
The work gets done to a point. The issue is they are limited on how much face to face interaction they have with season developers and management and also we have to have all of our team meetings (like scrums) later in the day so they don’t just call in from bed. I maintain a flex schedule with my staff as you can get the work done, but you still need to have at least half of your day available to interface with others (and email/skype doesn’t count) without making them stay past 6 or 7pm. It is not my fault you stay up all night gaming or whatever and cannot get out of bed before 11-12.