Psychological Empowerment: The Missing Link in Leadership and Employee Performance

Abstract

This study aimed to investigate the relationship between leadership style and employee performance, with psychological empowerment as a mediator. Data were collected from 320 mining contractors in Indonesia and analyzed using Structural Equation Modeling (SEM). The results showed that the indirect relationship between leadership style and employee performance through psychological empowerment was stronger than the direct relationship. This study highlights the importance of psychological empowerment as a mediating variable in the relationship between leadership style and employee performance. The findings suggest that companies and practitioners can improve job performance by enhancing psychological empowerment through effective leadership practices.