Leadership & Organization Development Journal

The effects of empowering leadership on psychological well-being and job engagement: the mediating
role of psychological capital
Jong Gyu Park Jeong Sik Kim SeungWon Yoon Baek-Kyoo Joo
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Jong Gyu Park Jeong Sik Kim SeungWon Yoon Baek-Kyoo Joo , (2017)," The effects of empowering leadership on
psychological well-being and job engagement: the mediating role of psychological capital ", Leadership & Organization
Development Journal, Vol. 38 Iss 3 pp. -
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 1

The effects of empowering leadership on psychological well-being and

job engagement: the mediating role of psychological capital

Abstract

Purpose - The purpose of this study is to investigate the effect of empowering leadership on

employees’ psychological well-being (PWB) and job engagement. This study also examines the

mediating role of psychological capital (PsyCap) in these relationships.

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Design/methodology/approach – The study draws on survey data (n=285) from employees in

eight consulting firms in South Korea. Confirmatory factor analysis was conducted to examine

the convergent validity of our construct measures. Structural equation modeling was used to

estimate the fit of the hypothesized model to the data.

Findings - We found that empowering leadership influenced job engagement both directly and

indirectly through PsyCap. Employees’ PsyCap fully mediated the relationship between

empowering leadership and employees’ PWB, while partially mediating the relationship between

empowering leadership and job engagement.

Originality/value - This is the first empirical study to examine the effects of empowering

leadership behaviors of leaders on both PWB and PsyCap, which are positive psychological

resources of employees. The study has also provided empirical evidence for the importance of

PsyCap, which plays a positive role in the ability of employees to manage their overall feelings

in achievement situations and in employees’ engagement in the workplace.

Keywords Empowering leadership, Positive organizational behavior (POB), Psychological

capital (PsyCap), Psychological well-being (PWB), Job engagement

Paper type Research paper

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Introduction

Organizations today want and need employees who are emotionally connected to their

work and willing to do everything they can in order to support their organizations’ success.

Leaders, believing that satisfied, capable, and committed employees are their most important

resource, take steps to enhance employees’ well-being and job performance (Walumbwa et al.,

2010a). Consequently, positive psychology has become a critical topic in the field of leadership

and organization development.

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According to Seligman and Csikszentmihalyi (2000), positive psychology is the scientific

study of optimal functioning and what creates more value in human life. Grounded in positive

psychology, positive organizational behavior (POB) attempts to explain the role of positive

psychological states of employees in forming positive attitudes and behaviors (Peterson, 2006).

Psychological well-being (PWB) and job engagement are recognized as important outcome

variables of POB. PWB is concerned with emotionally-focused positive psychology (Luthans

and Youssef, 2007), while job engagement, considered to be the opposite of job burnout, is

defined as a positive, work-related, and fulfilling psychological state (Schaufeli et al., 2002).

Employees with high levels of positive emotion are satisfied with their jobs (Diener et al., 1999)

and generate high levels of job performance (Wright and Cropanzano, 2000). Furthermore,

engaged employees perform better than less engaged employees (Rich et al., 2010). Thus,

employees’ PWB and job engagement are important domains of leadership outcomes for today’s

organizational leaders.

Leadership scholars point out that effective leadership encourages positive attitudes and

behaviors on the part of employees (Ashkanasy and Tse, 2000; Avolio et al., 2004). For instance,

previous leadership studies have examined the relationship between transformational leadership
 3

and PWB (e.g., Arnold et al., 2007; Nielsen and Munir, 2009; Nielsen et al., 2008), authentic

leadership and job engagement (e.g., Wang and Hsieh, 2013), and the relationship between

ethical leadership and job engagement (e.g., Chughtai et al., 2014). Since leaders play a

substantial role in the process of social influence within the organization (Uhl-bien, 2006), it is

important to study how leadership impacts employees’ psychological states of mind and

behaviors.

Empowering leaders allow and encourage employees to control their own work behaviors
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(Srivastava et al., 2006). Although the number of studies examining the promise of empowering

leadership has been increasing lately (for example, Ahearne et al., 2005; Srivastava et al., 2006;

Zhang and Batol, 2010), those studies largely focus on job performance (Ahearne et al., 2005;

Srivastava et al., 2006). Only a few studies examine the influence of empowering leadership on

aspects of the psychological state of mind such as trust (Ahearne et al., 2005) and level of

optimism (Segers et al., 2009).

In examining the relationship between leadership and the employees’ attitudes and

behaviors, this study postulates that positive psychological capacity (PsyCap) is a mediator in the

relationship between empowering leadership and the two POB constructs of PWB and job

engagement. Luthans et al. (2005) regard PsyCap as positive psychological resources that can be

influenced by various organizational or leadership variables. Avey (2014) empirically

demonstrates that empowering leadership is a strong predictor of PsyCap. PsyCap can also lead

to desired individual outcomes such as PWB (Hmieleski and Carr, 2007; Avey et al., 2010a) and

job engagement (Avey et al., 2008b; Hodges, 2010). Since PsyCap is an individual’s positive

psychological state of personal development (Luthans et al., 2008), we expect that synergistic
 4

effects on PWB and job engagement from PsyCap will result from leaders’ encouraging and

motivational behaviors through empowering leadership.

Despite the promise of PsyCap, relatively little is known about it, as Gooty et al. (2009)

have pointed out. This study aims to bridge the connection between organizational leadership

and positive psychology by reviewing definitions and core characteristics of PsyCap and

examining its role with regard to leadership and employees’ POB.

Review of the literature

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Empowering leadership

Empowering leadership is defined as behaviors whereby power is shared with team

members, in turn raising all members’ intrinsic motivation levels (Srivastava et al., 2006).

Empowering leaders show four types of behaviors: (a) emphasizing the significance of work, (b)

providing participation in decision making, (c) conveying confidence that performance will be

excellent, and (d) removing any bureaucratic constraints (Ahearne et al., 2005). These leadership

empowerment behaviors are based upon the broad conceptualization of empowerment posited by

Conger and Kanungo (1988). They demonstrate that empowerment is a motivational process

rather than simply the delegation of power to followers. Thus, to be empowering and to increase

motivation as well, a team leader must help team members understand the importance of their

roles in the team, involve them in the decision making process, believe them to be capable of

achieving high performance, and simplify administrative rules and procedures (Ahearne et al.,

2005).

Previous empirical studies demonstrate considerable evidence for the positive

relationship between empowering leadership and various team and organizational outcomes,

including task performance (Ahearne et al., 2005; Srivastava et al., 2006; Vecchio et al., 2010),
 5

job satisfaction (Konczak et al., 2000; Vecchio et al., 2010), commitment (Konczak et al., 2000),

and organizational citizenship behavior (Yun et al., 2007). Nevertheless, only a few studies

examine the influence of empowering leadership on the psychological state of employees.

Because we feel it is important to understand how leaders influence employees’ states of mind

and organizational behaviors, we explore the relationship between leaders’ empowering

leadership and not only PsyCap, but also the PWB and job engagement of employees.

Psychological capital (PsyCap)

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Today, many organizations try to increase PsyCap beyond financial capital (“what you

have”), human capital (“what you know”), and social capital (“who you know”) (Luthans et al.,

2004). PsyCap is more broadly defined as an individual’s positive state of development

regarding “who you are” and “what you can become” (Luthans et al., 2008, p 223). Therefore,

PsyCap features the following characteristics: (a) having enough self-confidence to take on and

successfully complete challenging tasks; (b) having a positive outlook on how to be successful

now and in the future; (c) demonstrating perseverance and flexibility in achieving goals; and (d)

being able to remain steadfast in the face of problems and adversity (Luthans et al., 2007b).

Luthans and his colleagues found that PsyCap is a higher-order construct that represents

commonality among the four components listed above (Luthans et al., 2007b; Luthans et al.,

2004; Luthans and Youssef, 2004).

Avolio et al. (2004) believe that PsyCap not only enables employees to commit to doing

their best in their jobs, but also promotes positive behaviors such as employees taking on

challenging work. To confirm this, it is important to investigate antecedents of PsyCap by

examining organizational or relational characteristics of the employees (Avey, 2014). Previous

studies show that leaders have significant impact on followers’ PsyCap (e.g., Avey, 2014; Gooty
 6

et al., 2009; Walumbwa and Schaubroeck, 2009). Hence, in this study, we investigate

empowering leadership as a key antecedent of PsyCap to contribute to a better understanding of

the nomological network of PsyCap.

Psychological well-being (PWB)

PWB is defined as “the striving for perfection that represents the realization of one’s true

potential” (Ryff, 1995, p. 100). PWB means that people will have high levels of positive emotion

and be satisfied with life in general. However, PWB is a multi-dimensional subject. According to
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Brodsky (1988), PWB has four characteristics: subjective and emotional aspects, a state as

opposed to a continuous part of who we are, a product of personal endeavor, and positive

movement toward achieving goals rather than being negative and involved in personal conflicts.

Brodsky also describes several antecedents of PWB including work environment, physical

health, career paths, and a low level of stress. Ryff (1989) identifies six unique dimensions of

PWB: (a) self-acceptance, (b) positive relations, (c) autonomy, (d) environmental mastery, (e)

purpose in life, and (f) personal growth.

The concept of well-being is getting more attention in today’s organizations. Being

actively engaged in the job can make a person feel energized and generate positive feelings of

well-being (Schaufeli and Bakker, 2004). Furthermore, people who have a high level of well-

being feel good about themselves, trust their relationships with other people, and feel they are on

the right paths in their lives. They are also independent, can make up their own minds, feel they

are able to choose what is best for their personal needs, and have specific objectives in life (Ryff

and Keyes, 1995).

The concept of well-being is crucial for employees today, due to structural changes in

many organizations such as long work hours and increased job complexity. Because PWB leads
 7

to positive outcomes in both employees’ work and personal lives, scientific research on this

subject is becoming increasingly critical in the management field (Avey et al., 2010a). In this

study, we examine employees’ PWB as an outcome of empowering leadership and PsyCap, both

of which are positive situational and psychological resources for employees.

Job engagement

Job engagement is a critical conceptual framework that connects employees with their

workplace. As is the case with PsyCap and PWB, the foundational and historical root of job
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engagement is also positive psychology (Durán et al., 2004). Kahn (1990) conducted seminal

research to explain why individuals are personally engaged or disengaged in the workplace.

Kahn proposes the following definition of employee engagement: “the simultaneous employment

and expression of a person’s ‘preferred self’ in task behaviors that promote connections to work

and to others, personal presence, and active full role performances” (p. 700). Kahn’s view of

engagement indicates a broad spectrum of employee engagement.

Maslach et al. (2001) take a complementary approach by analyzing why employees

suffer job burnout. They suggest that the antidote to job burnout is for employees to be actively

engaged in their work. Those authors define employee engagement as “a persistent, positive,

affective motivational state of fulfillment in employees that is characterized by high levels of

activation and pleasure” (p. 417).

Many studies on job engagement to date have attempted to identify the key drivers of job

engagement. For instance, Schaufeli and Bakker (2004) find that job resources that act as

motivators result in job engagement, where engaged employees exhibit positive job attitudes,

exhibit good mental health, and perform better than those who are less engaged. Based on

Kahn’s (1990) engagement concept, Rich et al. (2010) report that the drivers of job engagement
 8

are value congruence, perceived organizational support, and core self-evaluation. Among these

three drivers, perceived organizational support is related to supportive management and trusting

interpersonal relationships in the organization (Rich et al., 2010). Therefore, supportive

leadership from a supervisor can help increase subordinates’ engagement in their jobs.

According to Coffman and Gonzalez-Molina (2002), job engagement is one of the major

drivers contributing to enhancing an organization’s performance and growth. In addition, job

engagement helps companies survive in economic downturns (Amabile and Kramer, 2011).
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These empirical results support the idea that employees who feel psychologically safe with

empowering leaders and have self-confidence and a positive outlook are more likely to egange in

performing job roles. Thus, in this study we consider job engagement as an outcome of both

empowering leadership and PsyCap.

Proposed hypotheses

Empowering leadership and PsyCap

Leaders’ empowering leadership behavior will be positively related to the psychological

states of employees. Specifically, when a leader has a positive leadership perspective that is not

directive but is participative, at times actively (Bass, 2000), leaders can positively influence

employees’ psychological resources. For instance, Rego et al. (2012) report a positive

relationship between authentic leadership and PsyCap, and similarly, Gooty et al. (2009) find a

positive relationship between characteristics of empowerment and individual consideration from

transformational leadership and PsyCap.

Empowering leadership characterized by positive leadership behaviors (Walumbwa et al.,

2010a) leads to many positive outcomes. Empowering leaders who raise team members’

instrinsic motivation using supportive behaviors have an impact on employees’ positive affect
 9

(Srivastava et al., 2006). For example, previous studies demontrated that empowering leadership

is positively related to a subordinate’s sense of self-efficacy (Ahearne et al., 2005), employee

optimism, and a hopeful outlook on life (Segers et al., 2009). Leaders’ empowerment also

enables employees to be resilient by allowing them to be independent in their work (Luthans et

al., 2007b). Indeed, empowerment seems closely related to the core factors of PsyCap: self-

efficacy, optimism, hope, and resilience (Avey et al., 2008a).

Avey (2014) points out a lack of research on the antecedents of PsyCap and proposes that
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effective leadership and supervision can positively influence the PsyCap of subordinates,

because encouraging and work-assisting behaviors (e.g., reducing uncertainties or barriers)

facilitate subordinates to build self-efficacy. To support his proposition, Avey (2014) tests

authentic leadership, ethical leadership, and empowering leadership as predictors of PsyCap,

finding that leadership is the strongest predictor. Walumbwa et al. (2010a) suggest that

integrated research is needed between PsyCap and positive leadership styles such as empowering

leadership in order to explore the interaction between leaders’ behaviors and followers’ PsyCap.

Based on these studies, we posit the first hypothesis as the following:

H1. A leader’s empowering leadership will have a positive relationship with employees’

PsyCap.

Empowering leadership and PWB

Empowering experiences in their jobs directly influence the psychological states of

subordinates (Conger and Kanungo, 1988). Empowerment is a positive state of mind when the

path to achieving a goal is clear for employees and they have autonomy to achieve that goal. In

turn, they feel confident about being able to achieve their goals. A positive state of mind leads to
 10

an increase in an employee’s PWB. As McGregor and Little (1998) and Brunstein (1993)

demonstrate, achieving personal goals is indicative of an individual’s subjective well-being.

De Witte (1999) describes four specific job characteristics that correlate with PWB: skill

utilization, workload, job insecurity, and autonomy. An important aspect of autonomy is one’s

self-determination toward individual work behaviors (i.e., work pace and decision-making). Self-

determination is an essential feature of empowerment, which in turn is manifested as intrinsic

motivation with the following characteristics: meaning, competence, self-determination, and

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impact reflecting an individual’s orientation to his or her work role (Thomas and Velthouse,

1990). Empowerment can also affect other job-related characteristics of PWB, such as skill

utilization and workload. In this vein, Heller and Wilpert (1981) demonstrate that employees’

skill utilization is associated with participatory decision-making, which is one characteristic of

empowering leaders (Arnold et al., 2000). Thus, empowerment can be an effective means to

maintaining job satisfaction and reducing burnout when the employee’s workload is increased

(Andrews et al., 2014).

Empowering leadership focuses on the relationship between leaders and subordinates,

while attending to individual psychological reasons for motivation (Thomas and Velthouse,

1990). In another study, Fitzsimons and Fuller (2002) show that having a sense of empowerment

is associated with reduced psychological distress. They also report a positive association between

psychological empowerment and self-esteem. Molix and Bettencourt (2010) find that

psychological empowerment partially mediates the relationship between group identity and

PWB. In view of these findings from earlier research, we offer the second hypothesis:

H2. Empowering leadership will have a positive relationship with employees’ PWB.

Empowering leadership and job engagement

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Leaders play a significant role in improving employee engagement (Mohammed et al.,

2013; Tuckey et al., 2012; Zhu et al., 2009). By employing an empowering leadership style,

leaders expect to create an engaged workforce that can take ownership of their jobs and know

how to complete work successfully. Empowering leaders encourage subordinates to experience a

high level of energy and meaningfulness in their work; in fact, job engagement emerges when

employees work with a high level of energy and strongly identify with their work (Schaufeli and

Bakker, 2004).
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Exploring job engagement in terms of the interaction between the self and his or her

assigned work role, Kahn (1990) argues that when employees feel that their work boundaries are

clear and distinct, they become more engaged. Further, employees feel engaged when an

empowering leader recognizes employees’ self-worth and roles at work, such as when leaders

share information and knowledge that enables employees to be more productive (Ford and

Fottler, 1995).

In their research, Tuckey et al. (2012) find that a fire brigade leader with an empowering

leadership style increased employee engagement in three dimensions: vigor, dedication, and

absorption. Bakar (2013) also reports that empowering leadership behaviors, such as showing

concern with regard to employees’ work and needs, affects employee engagement. According to

Walumbwa et al. (2010b), employees are likely to experience work engagement when they have

feelings of empowerment from their leader because such employees believe that they have

autonomy and can impact group performance (Spreitzer, 1996). Saks and Gruman (2014)

proposed that empowering leadership can influence employees’ engagement with task, work,

group, and organization through job resources, job demands, and the psychological conditions.

These findings lead to the third hypothesis:

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H3. Empowering leadership will have a positive relationship with employees’ job

engagement.

Mediating role of PsyCap

To fully understand how leaders’ empowering leadership influences employees’ PWB

and job engagement, we should also consider the possible mediating role of employee

characteristics, especially related to individuals’ psychological assets. According to Mathieu and

Taylor (2006), there are three mediation models regarding organizational behavior: (a) the
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indirect effect model, which represents the independent variable related to the mediator and the

dependent variable related to the mediator, but with no direct relationship between the

independent and the dependent variables; (b) the partial mediation model, representing the direct

relationship between the independent variable and the dependent variable together with the

mediated effect; and (c) the full mediation model, where the direct relationship no longer exists

after the mediator is introduced into the model.

We developed Hypotheses 2 and 3 (i.e., the direct effect of empowering leadership on

PWB and job engagement) based on findings from previous studies. Nevertheless, few studies

examine our H1, i.e., the role of employees’ PsyCap in response to leadership styles (Avey,

2014). Walumbwa et al. (2010a) recommend that more research is needed to investigate the

relationship between positive leadership, such as empowering leadership, and PsyCap. For the

current study, we propose the partial mediation model because the construct of empowering

leadership is likely to influence dimensions of PsyCap to further impact employees’ PWB and

job engagement.

Previous studies demonstrate that PsyCap has a positive relationship with job

performance (Luthans et al., 2010), job satisfaction (Luthans et al., 2007a), and organizational
 13

citizenship behaviors (Avey et al., 2010b; Norman et al., 2010). Many studies in regard to

positive organizational behavior attest to the positive relationship between a positive outlook and

the well-being of individuals (e.g., Luthans and Youssef, 2004). For instance, Hmieleski and

Carr (2007) report a positive effect of PsyCap on PWB among entrepreneurs. Avey et al. (2010a)

showed that PsyCap is positively related with PWB over time when examined longitudinally.

Sweetman and Luthans (2010) propose a conceptual model of a positive relationship between

PsyCap and job engagement. In the same vein, Avey et al. (2008b) empirically demonstrate that
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employees’ PsyCap influences job engagement and organizational citizenship behaviors through

the employee’s positive emotion.

In the PsyCap literature, several studies report its mediating role with regard to leadership

effectiveness. For example, Walumbwa et al. (2011) state that PsyCap and trust mediate the

relationship between authentic leadership (self-awareness, relational transparency, balanced

viewpoints, and ethical foundation) and process, as well as performance outcomes within work

groups. They further claim that collective PsyCap mediates the relationship between both

authentic leadership and group citizenship behavior and performance. Gooty et al. (2009) also

find PsyCap to be a mediator between the followers’ perceptions of transformational leadership

and employees’ performance and organizational citizenship behavior. Luthans et al. (2008)

demonstrate that PsyCap is especially important in mediating the effects of a supportive

organizational climate with employees’ performance, job satisfaction, and commitment. Based

on these findings, we formed the following two hypotheses:

H4. Employees’ PsyCap partially mediates the relationship between leaders’ empowering

leadership and employees’ PWB.

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H5. Employees’ PsyCap partially mediates the relationship between team leaders’

empowering leadership and employees’ job engagement.

Methods

Sample and procedures

To test our hypotheses, we surveyed employees from consulting firms in Seoul, South

Korea. A total of 400 employees from eight companies were selected to participate in the study,

of which 344 employees completed the survey. Of those 344, after cleaning the missing data, 285
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responses were included in the final analysis. Completed surveys were returned directly to the

researchers, and the data was kept anonymous and confidential. In accordance with the relevant

ethics codes in South Korea, written informed consent was part of the data collection procedure.

In our sample of 285 respondents, 68.8 percent were male, and the mean age was 33.9

years. Classification by job types was as follows: 12.6 percent in Marketing and Sales; 5.6

percent in Research and Development (R&D); 9.5 percent in Information Technology (IT); 4.6

percent in support functions, such as Planning, Finance, Accounting, Human Resources (HR),

Legal, and General Administration; and 24.6 percent in professional jobs, such as Certified

Public Accountant (CPA) and Management Consultant. Classification by job level was the

following: 2.5 percent were executives, 15.4 percent were team leaders, 51.6 percent were front-

line supervisors, and 30.5 percent were employees below the supervisor level.

Measures

For all measures except for the demographic characteristics, we used a six-point Likert-

type scale, ranging from 1 (strongly disagree) to 6 (strongly agree). The language of the

instruments was Korean. First, the English versions of the empowering leadership scale, PsyCap

scale, PWB scale, and job engagement scale were translated into Korean by the authors. Then,
 15

back translation into English was performed by a bilingual doctoral student at a doctoral degree-

granting institution. The English and back-translated versions were compared. As a result, a

preliminary Korean version was created after some corrections for wording and meaning of each

item in cooperation with another author. In addition, two professionals with more than ten years

of experience in management reviewed and confirmed the clarity and face validity of all items.

Empowering leadership (α = .93). Empowering leadership was assessed by 12 items that

were developed on the basis of the conceptual work of Conger and Kanungo (1988) and the
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empirical work of Ahearne et al. (2005). Sample items were: “My manager helps me understand

how my objectives and goals relate to that of the company;” “My manager makes many

decisions together with me;” “My manager believes that I can handle demanding tasks;” and

“My manager allows me to do my job my way.”

Psychological capital (α = .90). We used the PsyCap scale developed by Luthans,

Youssef, and Avolio (2007). Sample items from the scale include: “I feel confident in

representing my work area in meetings with management;” “Right now I see myself as being

pretty successful at work;” “When I have a setback at work, I have trouble recovering from it,

moving on;” and “I always look on the bright side of things regarding my job.”

Psychological well-being (α = .80). PWB was measured with items adapted from Ryff

and Keyes (1995). Sample items from the scale are as follows: “In general, I feel I am in charge

of the situation in which I live;” “I have confidence in my opinions, even if they are contrary to

the general consensus;” and “I am quite good at managing the many responsibilities of my daily

life.”

Job engagement (α = .97). One popular measure for job engagement is the Utrecht Work

Engagement Scale (UWES; Schaufeli and Bakker, 2004), which measures the degree of
 16

employees’ work-related behaviors around concepts of vigor, dedication, and absorption.

Newman and Harrison (2008) argue that measures of engagement have been criticized because

many have not fully captured Kahn’s (1990) conceptualization of engagement as the degree to

which individuals invest their physical, emotional, and cognitive energy into their performance.

Rich et al. (2010) note that the Utrecht Work Engagement Scale (UWES) includes items that

confound engagement with the antecedent conditions initially suggested by Kahn (1990). They

developed a new scale of measurement that aligns more closely with Kahn’s notion of
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engagement as spanning physical, emotional, and cognitive dimensions. Thus, we measured job

engagement with 18 items adapted from Rich et al. (2010). Sample items include the following:

“I work with intensity on my job;” “I am enthusiastic in my job;” and “At work, my mind is

focused on my job.”

Analyses and results

To examine the hypothesized model, we used structural equation modeling (SEM) with

LISREL 8.72. Adopting Anderson and Gerbing’s (1988) comprehensive two-step analytical

strategy to test the hypothesized model, we first conducted confirmatory factor analysis (CFA) to

examine the convergent validity of our construct measures. Then we performed SEM based on

the measurement model to estimate the fit of the hypothesized model to the data. It is noted that

before testing the measurement and structural models, we averaged items for each dimension of

empowering leadership, PsyCap, PWB, and job engagement and treated the different dimensions

as separate indicators of their corresponding construct in our SEM analyses.

Factor analyses

Research involving cross-sectional data collected from a single source (e.g., employees

only) is vulnerable to common method variance (CMV) (Korsgaard and Roberson, 1995). To
 17

assess the extent of method variance, we conducted a three-step process of analysis. In the first

step, we conducted exploratory factor analysis. Four variables -- empowering leadership,

PsyCap, PWB, and job engagement -- in the pooled sample were factor analyzed utilizing a

principal components method with varimax rotation. Using an eigenvalue greater than 1 cut-off,

nine factors could be justified and no general factor could be identified. This result suggests that

CMV was not operating at a level that would invalidate our findings. According to Podsakoff

and Todor (1985), the results of the exploratory factor analysis performed above were utilized
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extensively.

The second step was conducting a confirmatory factor analysis of our measurement

model. CFA is most suitable for confirming whether or not construct measures load on their

respective priori-defined constructs (Browne and Cudek, 1993). Table 1 presents the CFA results.

As shown, the baseline (hypothesized) model fit the data well (χ2 = 4782.40, df = 1075; CFI

= .95, NNFI = .95, RMR = .07). The range of factor loadings for the four factors was as

follows: .62 to .78 for empowering leadership; .45 to .78 for PsyCap; .56 to .72 for PWB; and .68

to .84 for job engagement.

---------------------------------------
Insert Table 1 here
---------------------------------------

Against this baseline model, we tested three alternative models. Model 1 was a three-

factor model with empowering leadership merged with PsyCap to form a single factor. Model 2

was a two-factor model with empowering leadership merged with PsyCap to form a single factor,

while PWB and job engagement were merged into another factor. Model 3 was a one-factor

model in which all four variables included in this study were merged into a single factor. As
 18

Table 2 shows, the hypothesized model fit the data better than any of the simpler models in terms

of model fit and error indices. The difference in the chi-square statistic between the baseline

model and alternative models were significant. These results provided evidence of the construct

distinctiveness of empowering leadership, PsyCap, PWB, and job engagement.

The third step was obtaining results from the Fornell and Larcker (1981) test of

discriminant validity between constructs. Following their suggestions, we tested the discriminant

validity of four variables by comparing the variance shared by each construct and its measures
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with the variance shared by both constructs. To meet the requirements of this test, the variance

captured by each construct needed to be larger than .50 and smaller than the squared correlation

between constructs. The variance-extracted estimates for empowering leadership, PsyCap, PWB,

and job engagement were .76, .55, .51 and .67, respectively. Table 2 shows descriptive statistics,

correlations, and reliability coefficients. All exceeded the benchmark of .50 and the square of the

correlation between constructs. While these procedures did not eliminate the threat of method

variance, it did provide evidence that inter-item correlations were not driven purely by method

bias (Korsgaard and Roberson, 1995).

---------------------------------------
Insert Table 2 here
---------------------------------------

Test of hypotheses

Structural modeling results suggested that the hypothesized model fit the data well (χ2 =

4,778.40, df = 1,075, p < .01; NNFI = .95, CFI = .95, RMR = .06). We conducted a series of

nested model comparisons to assess the extent to which an alternative model would result in a

significant improvement in fit compared with the hypothesized model (Anderson and Gerbing,

1988). The hypothesized model, or the baseline model, represents a partial mediation model. We
 19

specified paths from empowering leadership to PsyCap and from PsyCap to PWB and job

engagement. This model also had direct paths from empowering leadership to PWB or job

engagement.

We compared the hypothesized model with an alternative model, which represents a

fully mediated model. In our comparative model, we deleted two direct paths from empowering

leadership to both PWB and job engagement. Table 3 summarizes the two models’ fit indices. As

Table 3 shows, the differences between chi-squares were significant. The results suggested that
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the hypothesized model indicated a better fit to the data than did the alternative model.

---------------------------------------
Insert Table 3 here
---------------------------------------

Figure 1 presents the overall structural model with standardized path estimates.

Hypothesis 1 stated that empowering leadership is positively related to PsyCap. Our results

supported this hypothesis (β = .59, p < .01). However, Hypothesis 2, which stated that

empowering leadership is positively related to PWB, was not supported (β = .06, p > .05).

Hypothesis 3, which stated that empowering leadership is positively related to job engagement,

was supported (β = .23, p < .01).

In the SEM approach, partial mediation needs to meet two conditions: (a) the path from

the independent variable (empowering leadership) to the dependent variable (PWB and job

engagement) is significant; and (b) the paths between the independent variable (empowering

leadership) and the mediator variable (PsyCap), as well as the path between the mediator

variable (PsyCap) and the dependent variables (PWB and job engagement), are significant

(James et al., 2006). If only condition (b) is met, a full mediation effect is supported. Hypothesis

4 stated that employee PsyCap partially mediates the relationship between a team leader's
 20

empowering leadership and an employee’s PWB. The structural coefficients of the hypothesized,

partially mediated model indicated that the relationship between empowering leadership and

PWB was non-significant (β = .06, p > .05), whereas empowering leadership had a positive

relationship with PsyCap (β = .59, p < .01) and, in turn, PsyCap related positively to PWB (β =

.72, p < .01). Although the direct relationship between empowering leadership and PWB posited

by Hypothesis 2 was not supported, the total indirect effect of empowering leadership on PWB

was positive and significant. Thus, Hypothesis 4 was supported.

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Hypothesis 5 stated that employee PsyCap partially mediates the relationship between a

team leader’s empowering leadership and an employee’s job engagement. The structural

coefficients of a partial mediation model indicated that empowering leadership had a positive

relationship with job engagement (β = .23, p < .01). Empowering leadership also had a positive

relationship with PsyCap (β = .59, p < .01) and, in turn, PsyCap was related positively to job

engagement (β = .65, p < .01). Therefore, Hypothesis 5 was supported.

---------------------------------------
Insert Figure 1 here
---------------------------------------

Discussion and conclusion

Discussion

The purpose of this study was to investigate how empowering leadership affects the

positive psychological state of employees and how those two constructs influence employees’

PWB and job engagement. Results showed that leaders’ empowering leadership has a significant

impact on employees’ PsyCap and also has a direct impact on employees’ job engagement.

Additionally, PsyCap was found to be positively associated with both PWB and job engagement.

Unlike its partial mediating role between empowering leadership and employees’ job
 21

engagement, PsyCap was found to fully mediate the relationship between empowering leadership

and PWB.

These findings imply that employees will form positive attitudes when leaders show

concern about the subordinates’ feelings and when they delegate authority (Culbertson et al.,

2010). We found that leaders’ empowering behaviors positively impact employees’ positive state

of mind towards their personal work and life. Most importantly, this study shows that leadership,

in combination with empowerment in the workplace, can contribute to the enhancement of

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employees’ PWB and job engagement by increasing employees’ PsyCap. This finding is aligned

with the previous literature that reports a positive relationship between PsyCap and PWB (Avey

et al., 2010; Culbertson et al., 2010), and with job engagement (Avey et al., 2008b; Hodges,

2010; Sweetman and Luthans, 2010). Findings from this study also clarified the role that PsyCap

plays in regards to empowering leadership, PWB, and job engagement.

It should be noted that empowering leadership did not directly impact PWB, but PsyCap

fully mediated the relationship between empowering leadership and PWB. This finding suggests

that leaders’ empowering behaviors may have a more direct role in influencing their employees’

level of PsyCap than PWB (Avey, 2014). One possible explanation can be that leaders can make

a greater impact on employee PsyCap that relates to employees’ positive psychological resource

capacities than on PWB, which is related to their overall life satisfaction above and beyond

work.

Theoretical implications

A few implications can be derived from the results of the study. First, the results of this

study expand the domain of empowering leadership and POB by revealing the intervening

mechanism of PsyCap. In response to calls for more research on PsyCap, we structured our study
 22

to variegate contextual factors that can promote employees’ PsyCap by testing leaders’

empowering behaviors (Avey, 2014; Walumbwa et al., 2010a). Based on the study results, we

suggest that empowering leadership is important for enhancing employees’ PsyCap, in turn

enhancing employee PWB and employee job engagement. That is, when leaders provide

empowerment, care, and encouragement focusing on the enhancement of employees’ positive

psychological resource capacities, their influence toward employees’ PWB and job engagement

will be greater.
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Second, one of our primary goals with this research was to further delineate the

positioning of PsyCap in the nomological network of leadership and employees’ positive

outcomes. In doing so, we assumed that a direct relationship exists between empowering

leadership and PWB and job engagement with the mediated effect of PsyCap. Furthermore, we

considered the role of PsyCap acting as a partial mediator in the relationship. However, in our

study, PsyCap fully mediated the relationship between empowering leadership and PWB, while

playing a partial mediation role with job engagement. These findings indicate that leaders’ direct

efforts to assist with employees’ autonomy and personal growth can be less than successful, but

their support of the subordinates’ self-confidence and perseverance is important for employees to

become more autonomous and purposeful. The findings also support the efficacy of leaders’

empowering behaviors in boosting employees’ POB.

Practical implications

Our study showed that, to improve the employees’ job engagement and psychological

well-being, employees need to feel safe, confident, persevering, and flexible, and for that matter,

leaders’ empowering behaviors play a significant role in boosting the followers’ psychological

safety. Although many leaders and managers encourage their subordinates to be more
 23

autonomous and participatory, we believe that conveying confidence and collaborating with

them to reduce work barriers are less frequently practiced in today’s workplace. Workplace

learning and development professionals can incorporate such elements into leadership training

and coaching or mentoring arragements.

Additionally, PsyCap is an important resource to form higher levels of PWB and job

engagment. As a concept of “who you are” and “what you can become” (Luthans et al., 2008, p.

223), employees’ PsyCap needs more attention on the part of the leaders and managers who
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interact closely with them. Today’s employees hear challenging messages about the ever-

shortening shelter life of acquired skills and are pressured to become more innovative; these are

uncharted paths in the fast-paced organizational life. As a concept that focuses on instilling self-

confidence, forming a positive outlook, and dealing with challenges through perseverance,

flexibility, and resilience, PsyCap is an under-researched and promising construct that can be

leveraged by individuals who directly assist or interact with the employees, particularly those

who need to perform new and uncertain tasks.

Limitations and recommendations

This study has limitations to be acknowledged. The data sample of this research includes

professional workers (24.6 %) such as Certified Public Accountant (CPA) and Management

Consultant. Howell and Dorfman (1986) point out that there are differences between non-

professional workers and professional workers in their responses to leadership behavior. The

data also includes executives (2.5%) and team leaders (15.4%). If we assume that delegation

generally follows a hierarchy in the organization and moves top-down, the level of

empowerment or the extent of the effect of empowering leadership could also depend on a

respondent’s hierarchical level in organizations. Thus, it would be useful for future research to
 24

compare differences between general staff (non-professional workers) and professional workers

in terms of the effects of empowering leadership.

All data in this study were based on employees’ responses at the same point. Thus, our

results and findings are vulnerable to a concern about both common source variance and

common method bias. Although we tried to alleviate the common method bias issue using

Harman’s single-factor test (Podsakoff et al., 2003), future research can address those concerns

by testing a longitudinal research setting with multi-source datasets.

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We suggest further investigation which tests the effect of other leadership styles in

addition to empowering leadership in examining POB. Although Avey (2014) tested three

positive leadership styles -- authentic leadership, ethical leadership, empowering leadership -- as

antecedents of PsyCap, there are other domains left out in those leadership styles, particularly

about servant/sacrificial and spiritual behaviors. Future research should consider various

leadership styles which are not only positive leadership (e.g., servant leadership, humble

leadership) to enhance employees’ postivity, but also negative and/or ineffective leadership

behaviors to discourage employees’ postivity. Lastly, another fruitful research topic will be

analyzing PsyCap with four-facet constructs: self-efficacy, optimism, hope, and resiliency

(Luthans et al., 2007). This research effort will bring more elaboration on the importance of

PsyCap.
 25

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Biographies:

Jong Gyu Park is a Ph.D. candidate in Workforce Education and Development program with
emphasis on organization development at the Pennsylvania State University. His research
interests include team leadership and leadership development in organizations. He also earned
his Ph.D. degree in management from the Sungkyunkwan University in Seoul, South Korea.

Jeong Sik Kim is an assistant professor in the department of Business Administration at Daejin
University. He received his Ph.D. in Business Administration from Sungkyunkwan University.
His current research interests include leadership, coaching, work motivation, decision making,
communication in organization, emotional labor, and psychological capital.
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Seung Won Yoon is a professor of organization, learning, and technology in the department of
higher education and learning technologies at Texas A&M University-Commerce. He actively
serves on various leadership roles within the Academy of Human Resource Development. His
research focuses on improving workplace performance through connecting leadership,
learning/knowledge sharing, technology, and organizational behavior.

Baek-Kyoo (Brian) Joo is an Assistant Professor of Human Resources Management at Georgia

Southwestern State University, USA. He received his PhD in Human Resource Development and
an MA in Human Resources and Industrial Relations from the University of Minnesota. His
current research interests include positive organizational behavior, organizational creativity,
leadership, coaching, career satisfaction, and international human resources management. He has
published research papers in such journals as Human Resource Development Quarterly, Journal
of Applied Behavioral Science, Journal of Leadership and Organizational Studies, Leadership
and Organization Development Journal, and Personnel Review.
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Table 1. Comparison of Measurement Models

Models Factors χ2 df ∆χ2 CFI NNFI RMR

1. Baseline model Four factors.
4782.10 1074 - .95 .95 .06
(Hypothesized model)
Three factors: Empowering
2. Model 1 leadership and PsyCap were 6661.29 1077 1879.19** .94 .93 .08
combined into one factor.
Two factors: Empowering
leadership and PsyCap were
3. Model 2 combined into one factor; PWB 7071.59 1079 2289.49** .93 .93 .08
and job engagement were
combined into another factor.

One factor: All the variables

4. Model 3 8309.07 1080 3526.97** .92 .92 .10
were combined into one factor.
**
p < .01
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Table 2. Means, Standard Deviations, and Correlations

Variables Mean s.d. 1 2 3 4 5 6 7 8 9 10

1. Gender 1.31 .46
2. Age 1.89 .65 -.26**
3. Education 3.15 .56 -.02 .25**
4. Job position 3.10 .74 .18** -.66** -.31**
5. Job tenure 2.15 1.23 -.11 .60 .13* -.58**
6. Job type 5.46 2.11 -.04 .10 -.00 -.06 .05
* * **
7. Empowering leadership 4.15 .79 -.13 .10 .13 -.25 .18** .07 (93)
8. Psychological capital 4.52 .61 -.16** .14* .16** -.19** .16** -.03 .55** (.90)
**
9. Psychological well-being 4.56 .59 -.04 .03 .11 -.08 .11 .05 .40 .65** (.80)
** ** * ** **
10. Job engagement 4.64 .71 -.14 .10 .08 -.18 .13 .04 .59 .74 .58** (.95)
* **
Notes: n = 285; reliability coefficients for the scales are in parentheses along the diagonal; p < .05, p < .01
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Table 3. Structured Equation Model Comparisons

Models χ2 df ∆χ2 CFI NNFI RMR

1. Partially Mediating
4,778.40 1,075 .95 .95 .06
(Hypothesized) Model

2. Fully Mediating Model 4,784.18 1,077 5.78 .95 .95 .07

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Psychological
Well-being
.09

.72**

.54**
Empowering Psychological
Leadership Capital

.65**
.23**
Job
Engagement

**
Notes: * p < .05 p < .01

Figure 1. Results of Structural Equation Modeling