Exploring the psychological impact of choice in telework: enhancing employee performance and life satisfaction

Abstract As the era of mandatory telework ends, managers face decisions on maintaining telework options. This study investigates the psychological impact of choice in telework on employee performance and life satisfaction based on self-determination theory. Analysis using PLS-SEM ( N = 809, Hungarian sample) reveals that autonomy-supportive leadership in telework settings significantly enhances employee performance and overall life satisfaction, supporting the mutual gains theory. The research discloses the relationship between autonomy-supportive leadership, the practice of giving freedom for employees to work from anywhere, control over the work environment, autonomy, and the indicators of personal performance and satisfaction with life in an organisational context. The study contributes to understanding the direct and indirect mechanisms through which leadership and human resource management practices influence personal performance and satisfaction with life. The research findings provide practical guidance for managers to reduce “productivity paranoia” in the hybrid work context and confirm that not only do happier employees perform better, but better performance can also contribute to life satisfaction.