The post-pandemic transition toward hybrid work models has radically reshaped organizational structures, elevating employee psychological well-being into a primary strategic driver of individual productivity and organizational resilience. This paper presents a systematic critical review evaluating the relationship between psychological well-being—encompassing autonomy, competence, relatedness, emotional vitality, and cognitive health—and multi-dimensional employee productivity in hybrid work environments. Guided by the PRISMA 2020 protocol, a synthesized analysis of 16 peer-reviewed empirical and meta-analytic studies published between 2021 and 2026 was conducted. The findings demonstrate that spatial and temporal autonomy significantly enhances task performance and creative output, mediated primarily by psychological well-being. However, unmanaged hybrid arrangements induce severe socio-technical risks, including digital fatigue, technostress, and erosion of organizational social capital, which severely impair focus and long-term engagement. Structural equation modeling synthesis confirms that psychological well-being mediates the relationship between hybrid work antecedents and individual productivity (β = +0.48, p < 0.001). Furthermore, supportive leadership, digital infrastructure quality, and cultural right-to-disconnect norms serve as vital boundary moderators. This review establishes a comprehensive framework for strategic HR practitioners and offers targeted research directions.
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