This qualitative study examines hybrid work in the Welsh public sector following its rapid expansion during the Covid-19 pandemic. Using a critical realist grounded theory approach, 16 employees across diverse roles were interviewed to identify mechanisms influencing performance. Analysis revealed a new theoretical model: Knowing and Connecting (relationship building, in-person interaction, role clarity, managerial capability, organisational citizenship) enables performance, while Avoiding and Losing (psychological detachment, poor social homeostasis, lack of accountability, absent job redesign, low social learning) hinders it. Findings offer actionable insights for policymakers and practitioners, highlighting targeted strategies to create a more productive, sustainable hybrid workforce in Wales and beyond.