The study examined the association between transformational leadership and organizational identification of employees. The relationship between transformational leadership and psychological empowerment and the possible mediating role of psychological empowerment in the relationship between transformational leadership and organizational identification of employees was also studied. A hypothesized model was developed to examine the relationship between the constructs. Sample for the study comprised 199 employees from the IT sector. Instruments used were Multi-factor Leadership Questionnaire, Smidts et al.’s (2001) Organizational Identification Questionnaire and Spreitzer’s (1995) Psychological Empowerment Questionnaire. Data were analyzed using SPSS and structural equation modeling in AMOS. It was indicated that transformational leadership had positive and significant impact on organizational identification as well as psychological empowerment of employees. Psychological empowerment acting as a mediator between these two constructs was established. It was found that the developed model would pave way for more attention toward psychological empowerment among leaders and employees in organization.

Transformational leaders inspire and motivate their followers to achieve extraordinary outcomes and in the process, improve their own leadership capacity. Transformational leadership is known to have a positive effect on followers work outcomes such as productivity, commitment, job satisfaction and so on. The attrition rate in organisations reduces with the increase in employees loyalty, job satisfaction and commitment to their work. The more the employees identify with the organisation, the more they are likely to continue their jobs for a longer period of time. It is imperative to know, from the management point of view, as to what contributes to the employee identification with the organisation, so that sustainability in productivity can be achieved. The rationale of the proposed study is to understand the underlying organizational mechanisms through which transformational leadership determine employees organizational identification. Different transformational leader behaviours involve different influence processes. Research evidences show that Transformational Leadership influences both organizational learning and organizational justice. The constructs of organizational learning and organisational justice are important in determining work related attitudes and emotions respectively. The objective of the present study is to develop a theoretical model to examine how the constructs of transformational leadership, organizational learning, and organizational justice relate to the employees psychological empowerment and organisational identification of the employees.The article is concluded with a discussion on the implications of the model and the possible limitations in the model.

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