The Effect of Empowering Leadership on Work Engagement in an Organizational Change Environment. An Investigation of the Mediating Roles of Self-Efficacy and Self-Esteem

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Chapter 2.1 Empowering Leadership and Work Engagement:

Empowering Leadership aims at the development of follower self-management / self-leadership skills. The historical roots of Empowering Leadership are found in behavioral self-management (Mahoney & Thoresen, 1974), social cognitive theory (Bandura, 1986), cognitive behavior modification research (Meichenbaum, 1977) and participative goal-setting research (Erez & Arad, 1986). Representative behaviors imply encouraging independent action, opportunity thinking, self-development, self-reward as well as using participative goal-setting and decision-making.
Macey and Schneider (2008) specified different definitions of Work Engagement. According to Schaufeli and Bakker (2004), Work Engagement is a positive, affective-motivational and work-related state that is characterized by vigor, dedication and absorption. Vigor refers to high levels of energy, the willingness to invest effort in one´s tasks and mental resilience while working. Dedication is characterized by a strong involvement in one´s work, accompanied by feelings of enthusiasm and significance and by a sense of inspiration and pride. Absorption refers to a pleasant state of total captivation in one´s work, which is characterized by time passing quickly and being unable to disengage oneself from the it. Work Engagement can be enhanced by autonomy and responsibility, social support and coaching, performance feedback, high levels of perceived fairness as well as task variety (these aspects can be developed by empowerment).
Empowering Leadership can play an intrinsic and an extrinsic motivational role to stimulate engagement. Intrinsically, Empowering Leadership behavior facilitates employees meet the fundamental need for self-determination and control (Ryan & Deci, 2000). By encouraging followers to use self-rewards, allow for follower self-leadership, engaging in participative goal-setting and encouraging teamwork as well as independent action, empowering leaders transfer power to their subordinates (Manz & Sims, 1987). In doing so, they foster followers' capacity for self-determination and feelings of mastery, which in turn, reduce change-related stressors, such as fear or mistrust. Extrinsically, the outcome of an increased feeling of mastery and self-determination fosters motivation for task accomplishment (Conger & Kanungo, 1988). Due to delegation, consultation and support, this enhanced level of motivation is combined with the capacity to succeed and achieve work- as well as change-related goals. Thus, Empowering Leadership is supposed to foster Employee Work Engagement via intrinsic and extrinsic motivational processes, which leads to the first assumption.
Hypothesis 1: There is a direct positive relationship between Empowering Leadership and Employee Work Engagement.
2.2 The Mediating Roles of Self-Efficacy:

According to Baron and Kenny (1986), the role of Self-Efficacy (SLF in the following) as a mediator of the EL - WE relationship is supported, in part, by the links between: (1) EL and WE, (2) EL and SLF, (3) SLF and WE. The mentioned links, except the link between EL and WE, which was discussed above, are discussed as follows.
2.2.1 Empowering Leadership and Self-Efficacy:

As a key element in Bandura's (1977) theory of social learning, SLF refers to an individual's belief in his or her capability to achieve a course of action needed to adhere the demands of a specific work situation. Bandura (1977) stated that SLF should not be conceptualized and measured in terms of generalized feelings of mastery, but rather in reference to dealing with a specific situation or performing a specific behavior. In regard with the Change Management Study, SLF is related to organizational change. Change-related SLF can be defined as an employee´s perceived ability to function well on the job, despite the demands of a changing work environment (Wanberg & Banas, 2000). Employees who doubt their ability to respond to the demands of any organizational change event are more likely to focus attention on their feelings of incompetence, which will be accompanied by a sense of psychological distress and a failure to cope with the situation (Bandura, 1977). In contrast, employees who have high levels of change-related SLF are less likely to be distressed by a feeling of inadequacy. They are rather expected to persist in their efforts to tackle the organizational change process. Bandura (1982) defined four sources of SLF: mastery experience, vicarious experience, verbal persuasion and emotional arousal. The present study expects EL to have an influence on each of the four sources. For example, an empowering leader can provide opportunities for mastery and vicarious experiences to his or her followers via verbal persuasion, encouragement and social inclusion. Previous research supports the contention, that empowering leaders can motivate employees in that they are able to meet expected outcomes (Tierney & Farmer, 2002). In other words, an empowering leader is perceived by his or her subordinates as a substantial organizational resource upon which they can rely when performing daily tasks. Specifically, in the context of organizational change, the perceived availability of EL may enhance employees' confidence, that the job will get done (i.e. high SLF).
Very few studies have tested the extent to which particular event characteristics are directly related to situational evaluations of control and SLF in the context of organizational change. An exception was a study conducted by Shaw et al. (1993), which was carried out at AT & T. Shaw et al. (1993) examined the extent to which certain characteristics of the change event (i.e. social support and open communication) were positively related to control appraisals (operationalized as job-related autonomy). As expected, both types, support and communication (deployed by the leader) were positively related to job-related autonomy. In turn, as already mentioned above, job-related autonomy leads to a higher sense of SLF.
An intermediate objective of this term paper is to investigate the role of change-related SLF as a personal resource fostered by EL behavior in an organizational change environment.
2.2.2 Self-Efficacy and Work Engagement:

Generally, organizational change is intended to alter key organizational variables, that affect the members of the organization as well as their work-related attitudes and behaviors (Jimmieson, Terry & Callan, 2004). Organizational change processes can create uncertainty, fear and doubt (Graetz & Smith, 2010; Jaskyte, 2003), which, in turn, results in a tendency for employees to resist, avoid and devalue organizational change.
Prussia, Anderson & Manz (1998) assumed, that, the greater a person´s SLF, the more confident he or she is about being successful in a difficult task domain (i.e. organizational change). In other words, SLF can have a critical effect on an individual's perceived readiness to carry out control in the workplace. Furthermore, employees with high levels of SLF are more likely to strive to accomplish difficult tasks and less prone to give up, when obstacles appear during organizational change (Schyns, 2004).Those who confidence to wield control and want to strive to ensure a successful implementation of the change event, are willing to do more than is required of them, even if it comes up to personal sacrifice (Meyer & Herscovitch, 2001; Meyer et al., 2007).
Accordingly, it is reasonable to conclude, that employees with high SLF are more likely to show higher levels of WE during organizational change.Based on all the inferences previously discussed, EL is not only supposed to influence WE directly, but also indirectly via SLF.
Hypothesis 2: Self-Efficacy mediates the relationship between Empowering Leadership and Employee Work Engagement.
2.3 The Mediating Roles of Self-Esteem:

Organizational-based Self-Esteem (SLS in the following) is defined as "the degree to which organizational members believe that they can satisfy their needs by participating in roles within the context of an organization" (Pierce et al., 1989, p. 625).
As SLS can be seen as a considerable personal resource, this variable was investigated as a mediator of the EL - WE relationship, in part, by the links between: (1) EL and WE, (2) EL and SLS, (3) SLS and WE. The mentioned links, except the link between EL and WE, which was discussed initially, are discussed as follows.
2.3.1 Empowering Leadership and Self-Esteem:

According to Michel, Stemaier & Salvador (2010), individuals in organizations strive for a positive self-concept. Self-concept is derived from membership and from the way in which the group to which one belongs is valued by others (i.e. supervisor, coworkers and the organization). The ability of the leaders to create a feeling of employee self-responsibility makes employees feel a sense of personal control over their work and their activities within their work environment. In the context of organizational change, the perceived availability of EL may consequently enhance employees' confidence (higher SLS). EL allows subordinates to feel confident in their ability to deal with challenges and overcome change events successfully. Thus, one can expect a direct, positive relationship between EL and SLS.
2.3.2 Self-Esteem and Work Engagement:

If employees feel a sense of personal control over their work and their activities, their SLS is strengthened, which in turn may foster their WE. Several researchers have investigated the relationships between personal resources and WE.
Rothmann and Storm (2003) conducted a large cross-sectional study among 1.910 South African police officers. They found, that engaged police-officers use an active coping style: They are problem-focused, taking active steps to make efforts to eliminate or rearrange stressors.
In their study among highly skilled Dutch technicians, Xanthopoulou et al. (2007a) examined the role of three personal resources (SLF, organizational-based SLS and Optimism) in predicting WE. Results indicated, that engaged employees are highly self-efficacious (see also 2.2.2); they believe that they can meet the demands they face in a wide range of contexts. In addition, engaged workers have the tendency to believe they can satisfy their needs by participating in roles within the organization (organizational-based SLS) (cf. Mauno et al., 2007). These findings were replicated and expanded in a two-year follow-up study (Xanthopoulou et al., 2007a). Findings showed, that organizational-based SLS as well as SLF contributed uniquely to explaining variance in WE over time, over and above the impact of job resources and previous levels of engagement.
As a final example, Bakker et al. (2007) in their study among female school principals found, that those with most personal resources (i.e. high SLS and high SLF) scored highest on WE.
Hence, a mediating effect of SLS between EL and WE was assumed to exist.
Hypothesis 3: Self-Esteem mediates the relationship between Empowering Leadership and Employee Work Engagement.