The Mediating Role of Psychological Empowerment in the Relationship between Empowering Leadership, and Engagement and Innovative Work Behaviour

The main purpose of this study is to examine the influence of empowering leadership on employee innovative work behaviour and work engagement, which is mediated by psychological empowerment. The data were collected from 1,232 employees and 232 supervisors of 18 banks in Ethiopia. Reliability is assessed using Cronbach alpha; to asses validity we employed a structural equation modelling procedure using EQS 6.2. To test the hypothesis, multiple hierarchical regressions and PROCESS-macro model 4 were used. The findings suggest that: there is a positive relationship between empowering leadership and innovative work behaviour. Nevertheless, empowering leadership does not affect work engagement unless mediated by psychological empowerment. Meanwhile, empowering leadership significantly affects psychological empowerment. There is a positive influence of psychological empowerment on innovative work behaviour and work engagement, and psychological empowerment mediates the indirect relationships between empowering leadership and the outcome variables, innovative work behaviour and work engagement. This study provides theoretical enrichment from the aspect of empowering leadership, and practically recommends that leaders can increase employee innovativeness and engagement by creating a work environment which ensures that employees feel empowered psychologically.