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We extend the ‘black box’ picture of public management and the ‘balanced view’ of HRM literature in the Spanish public context. Specifically, we explore the link between structural empowerment and organisational performance and the mediating role of three employee outcomes: job satisfaction and affective commitment as attitudinal variables related to eudaimonic well-being, and job anxiety as a variable related to hedonic well-being. Using a multilevel methodology with data on employees from 103 local authorities for 2016, results support the mutual gains perspective, but not as intensely as expected (empowerment does not affect attitudinal variables), since empowerment contributes to reducing job anxiety in Spanish local governments. Specifically, information and rewards are the structural empowerment dimensions that help to reduce job anxiety levels in employees and, thus, enhance performance. These results suggest that local government managers could usefully apply techniques such as disseminating information on the organisation’s aims among employees or paying bonuses for meeting targets.

Structural empowerment and organisational performance: the mediating role of employees’ well-being in Spanish local governments