Investigating the effect of authentic leadership and employees' psychological capital on work engagement: evidence from Indonesia

Abstract

This study aims at investigating the positive effect of Authentic Leadership on Work Engagement and the mediating role of Psychological Capital (PsyCap). This study employed the Jobs Demands Resource (JD-R) model theory to explain the contribution of Authentic Leadership and PsyCap on Work Engagement. Also, the direct effect of Authentic Leadership on employees' PsyCap was examined. This study randomly selected participants from 1,120 employees in one of the largest public service offices in Indonesia. 192 employees (male = 120 or 62.5%) fully participated in a three-wave data collection. By using a Structural Equation Modeling (SEM) technique, this study confirmed that the proposed theoretical model (χ2/df = 2, p < .05, RMSEA = .07, SRMR = .07, CFI = .95) showed a better fit than the alternative model (χ2/df = 3, p < .05, RMSEA = .09, SRMR = .09, CFI = .85). The results also confirmed that Authentic Leadership and PsyCap directly predicted Work Engagement. Furthermore, the indirect effect of Authentic Leadership on Work Engagement was positively mediated by employees' PsyCap. Authentic Leadership in Indonesian public organizations may provide a tremendous impact on employees' PsyCap and Work Engagement. This study has provided new insight into the application of the JD-R model in Indonesian public organizations. Discussion, implications, limitations, and future research directions are included.