<italic>Purpose</italic> - The purpose of this paper is to focus on the antecedents and consequences of psychological empowerment in the organisational contexts where services are provided to the customers and employees are considered as internal customer. <italic>Design/methodology/approach</italic> - This is a conceptual paper that explains the various antecedents and consequences of psychological empowerment. <italic>Findings</italic> - The study suggests that supervisory social support, job security, employee participation, access to information about an organisation's rewards system, access to performance information and access to information about the mission of the organisation are the antecedents of psychological empowerment and organisational citizenship behaviour, employee work engagement, innovative work behaviour, employee's work performance, turnover intention, job satisfaction and organisational commitment are the consequences of psychological empowerment. <italic>Originality/value</italic> - This work is the first that investigates how and under what circumstances psychological empowerment of the employees is likely to happen. Furthermore, the study also presents the consequences of psychological empowerment in service sector. <italic>Paper type</italic> - Conceptual paper