Role of Sub-constructs of Psychological Capital and Transformational Leadership in Engaging Employees in Service Sector

Abstract

The purpose of this study is to examine the relationship between transformational leadership (TL) and employee engagement through the mediating role of the sub constructs of psychological capital. The article has used a single cross-sectional descriptive design. The sample consisted of 450 full-time employees working in the service sector in India. The data were mainly analyzed through structural and measurement model. The result of the study revealed that TL has an influence on employee engagement. The relationship between TL and employee engagement is mediated by sub-construct hope of psychological capital. Implication of this study is of high importance for organizations continuously working to increase the level of employee engagement to further enhance competitiveness. Prior research has examined the antecedents of employee work engagement, but little is known about the role of TL and a positive psychological state, in shaping employee work engagement. Imparting TL training and style can help to generate psychological capital which will positively drive employee engagement. Organizations with transformational leaders will be able to make employees feel valued and happy by igniting feeling of hope. The engaged workforce will result in the positive social outcome. This study is original as earlier studies have not explored the important role of hope and also optimism as dimensions of psychological capital. The article supports the critical role of leadership and psychological capital in creating highly engaged employees which have not been studied in an Indian context with specific focus to the service sector.