An Examination of the Mediating Role of Psychological Empowerment on the Relations Between the Job, Interpersonal Relationships, and Work Outcomes

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1 Journal of Applied Psychology Copyright 2000 by the American Psychological Association, Inc. 2000, Vol. 85, No. 3, /00/$5.00 DO[: // An Examination of the Mediating Role of Psychological Empowerment on the Relations Between the Job, Interpersonal Relationships, and Work Outcomes Robert C. Liden and Sandy J. Wayne University of Illinois at Chicago Raymond T. Sparrowe Cleveland State University A field investigation of 337 employees and their immediate superiors tested the mediating role of empowerment in relations between job characteristics, leader-member exchange (), team-member exchange (), and work outcomes. The meaning and competence dimensions of empowerment mediated the relation between job characteristics and work satisfaction. The meaning dimension also mediated the relation between job characteristics and organizational commitment. Contrary to prediction, empowerment did not mediate relations between,, and the outcome variables. Rather, and were directly related to organizational commitment. In addition, was directly related to job performance. These findings suggest that work satisfaction is explained largely by job characteristics (through empowerment) but that and combine with job characteristics and empowerment to explain variation in organizational commitment and job performance. Over the past decade, many academics and practitioners have embraced psychological empowerment as a means of increasing decision making at lower organizational levels while at the same time enriching the work lives of employees. Although empowermerit has been dismissed by some as a "buzz word" or passing fad (Abrahamson, 1996; Strawn, 1994), continuing interest among practitioners and researchers suggests that the topic contributes to the literature in organizational psychology. Empowerment is an important construct because it offers the potential to positively influence outcomes that benefit both individuals and organizations (Liden & Tewksbury, 1995). Theory development (Conger & Kanungo, 1988; Thomas & Velthouse, 1990) and construct validation of an empowerment measure (Spreitzer, 1995), as well as some initial empirical support for its relationship to work-related outcomes (Sparrowe, 1994; Spreitzer, Kizilos, & Nason, 1997), indicate the potential importance of empowerment. Researchers (Bartunek, Bradbury, & Boreth, 1997; Liden & Arad, 1996) have distinguished among several perspectives on Robert C. Liden and Sandy J. Wayne, Department of Managerial Studies, University of Illinois at Chicago; Raymond T. Sparrowe, Department of Management and Labor Relations, Cleveland State University. We gratefully acknowledge the funding of the Center for Human Resource Management (CHRM), University of Illinois, Urbana-Champaign and Chicago campuses, and the Campus Research Board (CRB), University of Illinois at Chicago. The interpretations, conclusions, and recommendations, however, are ours and do not necessarily represent those of the CHRM or the CRB. We also thank Lisa Bradway, Cathy Higgs, Susan Murphy, and Ellen Papper for their research assistance. Correspondence concerning this article should be addressed to Robert C. Liden, Department of Managerial Studies, M/C 243, University of Illinois at Chicago, 601 South Morgan, Chicago, Illinois Electronic mail may be sent to bobllden@uic.edu. empowerment, some focusing on social-structural factors and others on perceptional or psychological factors. In the current research, we use the term empowerment to refer to its psychological aspects, which consist of a set of conditions necessary for intrinsic motivation (Conger & Kanungo, 1988). Thomas and Velthouse (1990), building on Conger and Kanungo's (1988) motivational approach, described empowerment as intrinsic task motivation consisting of four dimensions: meaningfulness, impact, competence, and choice. Meaningfulness concerns the value a task holds in relation to the individual's value system. Impact represents the degree to which individuals perceive that their behavior makes a difference (Thomas & Velthouse, 1990). Competence refers to self-efficacy or the belief that one is capable of successfully performing a particular task or activity (Bandura, 1982; Gist & Mitchell, 1992). Choice involves "causal responsibility for a person's actions" (Thomas & Velthouse, 1990, p. 672). Using the Thomas and Velthouse model as a theoretical foundation, Spreitzer (1995) developed a four-dimensional scale in an attempt to measure meaningfulness, impact, competence, and choice. Spreitzer renamed meaningfulness meaning and replaced choice with selfdetermination; we have chosen to use Spreitzer's terms. Although we have adopted a psychological definition of empowerment, our approach is interactional. We examine the psychological dimensions of empowerment in relation to the social context and the nature of the work itself. That is, we acknowledge that perceptions of psychological empowerment may be based in part on external factors that surround individuals. For example, social-structural changes in organizations designed to increase individuals' mastery and power (Spreitzer, 1996; Zirnmerman, 1990) are purported to influence perceptions of psychological states (Conger & Kanungo, 1988) and intrinsic work motivation (Thomas & Velthouse, 1990). Changes in psychological states are expected to follow not only from formal interventions designed to 407

2 408 LIDEN, WAYNE, AND SPARROWE increase power but also from complementary processes in the social milieu that increase efficacy and intrinsic task motivation. Conger and Kanungo (1988, p. 474) described empowerment as the "process of enhancing feelings of self-efficacy among organizational members through the identification of conditions that foster powerlessness and through their removal by both formal organizational practices and informal techniques of providing efficacy information." The major component of "formal organizational practices" involves job design focused on increasing individuals' influence in workplace decision making. Informal techniques are dominated by empowerment resulting from social interactions with others at work. Similarly, Thomas and Velthouse (1990, p. 671) argued that empowerment not only follows from individuals' assessments of their work tasks but also depends on contextual factors, such as "inputs from superiors, staff, peers, and subordinates." Research has acknowledged contextual factors such as organizational culture (Sparrowe, 1994) and top level support (Arad & Drasgow, 1994) as influencing empowerment. However, especially critical contextual factors, including social interactions, have largely been ignored. Two key social relationships at work are those with superiors and coworkers (Graen, 1976). Relationships between leader and subordinate have been examined in the leadermember exchange () literature (Liden, Sparrowe, & Wayne, 1997), and relationships among coworkers have been studied as team-member exchanges (; Seers, 1989). Only a handful of studies have considered the quality of the relationship between leader and subordinate in fostering empowerment (Keller & Dansereau, 1995; Sparrowe, 1994; Spreitzer, DeJanasz, & Quinn, 1999; Uhl-Bien & Graen, 1993), and we are not aware of any studies that have examined relationships between the quality of social interactions with coworkers and empowerment. If we consider empowerment as building on decades of research on employee involvement, this omission is curious, given that seminal work on involvement by Kurt Lewin (1947) emphasized the importance of social interaction with others. This tradition was sustained and extended by the sociotechnical systems researchers of the Tavistock Institute, who argued that social and technical systems must be merged to accomplish self-managing work groups (Trist & Bamforth, 1951). Similarly, early job design researchers identified interpersonal interaction with coworkers as a key element of work behavior necessary for job enrichment to positively affect work outcomes (Turner & Lawrence, 1965). Thus, the purpose of our investigation was to build and test a model of empowerment that integrates job characteristics and social exchange relationships in the explanation of work outcomes. More specifically, we proposed that empowerment plays a mediating role between job characteristics, and, and work outcomes. Job Characteristics and Empowerment The motivating properties of job characteristics have been well established both theoretically and empirically (Griffin, 1987; Hackman & Lawler, 1971; Hackman & Oldham, 1976). The job characteristics model (Hackman & Oldham, 1976) represents a theory of intrinsic motivation. Reacting to a focus in industrial psychology on extrinsic factors such as pay and working condi- tions that motivate people, Herzberg, Mausner, and Snyderman (1959) proposed that intrinsic factors such as recognition and responsibility may possess strong motivating properties. Hackman and his colleagues built on Herzberg et al.'s framework by developing a refined set of characteristics that motivate employees intrinsically. In the job characteristics model, the core job characteristics lead to intrinsic motivation through the mediation of three critical psychological states: experienced meaningfulness, experienced responsibility, and knowledge of results (Hackman & Oldham, 1976). Thomas and Velthouse (1990), when describing each of the cognitive task assessments that compose empowerment, drew parallels with the critical psychological states in the job characteristics model: Meaning was identified with experienced meaningfulness, impact with knowledge of results, and self-determination with experienced responsibility. This conceptualization of three of the four empowerment dimensions in relation to the critical psychological states suggests that the nature of tasks, as defined by the job characteristics approach, contributes directly to perceptions of empowerment (Liden & Arad, 1996). Research by Gagnt, Sentcal, and Koestner (1997) and Kraimer, Seibert, and Liden (1999) offers initial empirical evidence that there are a number of positive relationships between the core job characteristics and the four empowerment dimensions. Our rationale for positing a relationship between the nature of the job and empowerment is thus derived in part from the theoretical foundations of the job characteristics model. Tasks that are high in the core job characteristics of skill variety, task identity, task significance, and feedback are likely to lead to perceptions of empowerment. Given that empirical research has not supported the differential relationships between core job characteristics and the critical psychological states posited in the original job characteristics model (Fried & Ferris, I987), we combined task variety, task identity, task significance, and job feedback. Because Spreitzer's (1995) measure of the self-determination dimension of empowerment was constructed using items adopted from the Job Diagnostic Survey (JDS; Hackman & Oldham, 1975, 1976) we omitted autonomy from the core job characteristics. We expect the core job characteristics to be positively related to task assessments of meaning because using a variety of skills, completing tasks from beginning to end, receiving feedback from the job itself, and engaging in work that has a significant effect on others are experienced by most individuals as meaningful (Hackman & Oldham, 1976). Similarly, we expect task assessments of impact to be positively related to the core job characteristics. Task significance was explicitly defined by Hackman and Oldham (1976) in relation to the impact of one's work on the well-being of other individuals. Task feedback enhances cognitive assessments of impact by providing information about the quality and effectiveness of performance. Skill variety and task identity are likely to be positively related to assessments of impact because completing an entire task through the use of many skills invests a sense of personal ownership in its outcomes. Similarly, tasks that use a variety of challenging skills, are completed from beginning to end, have significant impact on the well-being of others, and provide performance feedback are likely to enhance self-efficacy or competence because they provide evidence of the degree of an individual's enactive mastery (Bandura, 1982). Finally, assessments of

3 EMPOWERMENT AND WORK OUTCOMES 409 self-determination are likely to be positively related to the core job characteristics. Using a variety of skills to complete a significant task from beginning to end often entails choice about how to organize the work and in what sequence it is to be performed. Hypothesis 1: are positively related to the empowerment dimensions. and Empowerment Deci, Connell, and Ryan (1989) have contended that the leader plays a vital role in providing subordinates with empowering experiences. These authors argued that "the interpersonal work climate created by managers for their subordinates" contributes directly to subordinates' feelings of self-worth and sense of selfdetermination (Deci et al., 1989, p. 580). Although empirical support is limited for this contention, a possible reason for the nonsignificant results is that these researchers assumed that the leaders would treat all subordinates in the same way. The results might have been different if an approach had been taken. The main premise behind theory is that leaders differentiate in their treatment of subordinates (Dansereau, Graen, & Haga, 1975). That is, a leader establishes high-quality exchanges with some members yet low-quality relations with others. Some exchanges, labeled low, are purely economic (Blau, 1964) and based on the employment contract. These relationships are restricted to the exchange of material necessary for basic completion of work. On the other hand, high exchanges not only involve the exchange of material required by the job but contain a social element as well (Blau, 1964; Graen & Uhl-Bien, 1995) and involve an exchange of resources that extends beyond the formal contract (Kramer, 1995; Liden & Graen, 1980). The literature indicates that the supervisor-subordinate relationship has a major impact on employees' work experiences (Liden, Sparrowe, & Wayne, 1997). Perhaps the most important elements that differentiate leadermember relationships are the degree of emotional support, decision-making responsibility, and task challenge granted to the member. This contention parallels the argument of Deci et al. (1989) regarding the cofiditions necessary for intrinsic motivation except, with an approach, leaders are expected to provide the support and resources to a subset of their subordinates. Consistent with this argument is research showing a positive association between and such variables as decision influence (Dansereau et al., 1975; Graen & Cashman, 1975; Liden & Graen, 1980; Scandura, Graen, & Novak, 1986; Schriesheim, Neider, Scandura, & Tepper, 1992), task variety (Dunegan, Duchon, & Uhl-Bien, 1992) and support for members' self-worth (Keller & Dansereau, 1995). Higher levels of decision-making influence and responsibility provide meaning, feelings of self-efficacy, a sense of impact, and perceptions of self-determination that are described as being key ingredients of empowerment (Thomas & Velthouse, 1990; Spreitzer, 1995). Thus, quality determines the extent to which leaders grant members the latitude and support that are the necessary antecedents of perceptions of empowerment. Hypothesis 2: is positively related to the empowerment dimensions. and Empowerment The emphasis placed on teams and teamwork in contemporary organizations (Hollenbeck et al., 1995) and the fact that empowerment is often implemented at the group level suggest that the study of empowerment is not complete without the inclusion of exchanges among work group members. Specifically, relations with coworkers, termed by Seers (1989), may have a profound effect on perceptions of empowerment. Indeed, team members have been shown to have such a powerful effect on fellow group members that their help and support ameliorate the negative effects of unmet expectations (Major, Kozlowski, Chao, & Gardner, 1995). represents an individual's overall perception of exchanges with other members of the work group. As with s, s may vary in terms of the content and process of exchange. Low s are limited to exchanges required for the completion of work tasks, whereas high s involve exchange of resources and support that extend beyond what is necessary for task completion. By offering work-related expertise and feedback, coworkers provide the conditions necessary for enhanced perceptions of meaning and impact. Similarly, appropriate feedback and social support increase peer perceptions of competence. Moreover, to the extent that coworker exchanges include sharing of power and authority in the completion of the team's tasks, they support perceptions of self-determination. Hypothesis 3: is positively related to the empowerment dimensions. Increased feelings of meaning, impact, competence, and selfdetermination that compose empowerment are thought to result in more positive work outcomes (Spreitzer, 1995). We examined three work outcomes in this study to capture affect (work sarisfaction), behavioral intention (organizational commitment), and behavior (job performance rating). Work Satisfaction We expected that the empowerment dimensions would be positively related to work satisfaction. Of the four empowerment dimensions, the strongest theoretical argument for a positive relation to work satisfaction has been made for meaning. Herzberg et al. (1959) stressed that one can derive satisfaction from work only when engaged in a meaningful job requiring challenge and opportunity for recognition. Hackman and Oldham (1976) echoed this proposition by introducing job meaningfulness as a critical precursor to work satisfaction. Individuals who perceive their jobs to be significant and worthwhile feel higher levels of work satisfaction than those who perceive their jobs as having little value. Empirical findings have supported this contention, as the meaning dimension of empowerment was found to be significantly related to work satisfaction in two organizations (Spreitzer et al., 1997). Arguments can also be made for positive relations between the remaining empowerment dimensions (impact, competence, and self-determination) and work satisfaction. Individuals should derive a sense of satisfaction with the work itself when they feel that they have been directly involved in outcomes that affect the organization. Similarly, the more that individuals are involved in

4 410 LIDEN, WAYNE, AND SPARROWE decision making, the more satisfied they should be with the work itself. A sense of control or self-determination over one's work satisfaction is satisfying because any accomplishments can be attributed more to oneself than to other individuals, such as a superior. Finally, research on self-efficacy indicates that individuals who possess confidence in being able to succeed are happier with their work than those who fear that they may fail. Being fearful of failure may lead the individual to experience feelings of helplessness (Martinko & Gardner, 1982), and, as a result, such individuals will be less satisfied with the work than people who are confident in their levels of competence. Hypothesis 4: The empowerment dimensions are positively related to work satisfaction. Commitment Organizational commitment refers to an individual's attachment, loyalty, and identification with the organization (Meyer & Allen, 1984). Empowerment may contribute to a sense of commitment to the organization through a process of reciprocation. Individuals tend to be appreciative of organizations that provide opportunities for decision latitude, challenge, and responsibility, as well as for the feelings of meaning, impact, self-determination, and mastery that result from these conditions. They are likely to reciprocate by being more committed to the organization (Eisenberger, Fasolo, & Davis-LaMastro, 1990; Kraimer et al., 1999); that is, their identification, attachment, and loyalty to the organization will increase. Hypothesis 5: The empowerment dimensions are positively related to organizational commitment. Job Performance A major premise of empowerment theory is that empowered individuals should perform better than those who are relatively less empowered (Thomas & Velthouse, 1990). When individuals feel that their jobs are meaningful, and that by completing their job responsibilities they have an impact on others within and outside of the organization, they are motivated to perform well. We also expect that individuals who possess self-determination at work are able to respond to the demands of each unique situation. For example, when sales personnel are able to immediately handle customer requests without waiting for the approval of a superior, their level of service is enhanced. When self-determination is not present, individuals feel helpless because they are not allowed to take work-related actions that they deem appropriate (Greenberger, Strasser, Cummings, & Dunham, 1986). Perhaps the most salient of all empowerment dimensions is competence. The personal sense of self-worth and confidence in one's job competence should translate into higher levels of performance in comparison to less empowered individuals. Results of a meta-analysis showed a strong association (mean correlation =.38) between self-efficacy and job performance (Stajkovic & Luthans, 1998). In a study including all four empowerment dimensions, competence and impact were shown to be positively related to performance ratings (Spreitzer et al., 1997). Hypothesis 6: The empowerment dimensions are positively related to job performance ratings. The above hypotheses combine to form a mediation model. We contend that the empowerment dimensions (meaning, impact, competence, and serf-determination) mediate relations between the independent variables (job characteristics,, and ) and work outcomes (work satisfaction, organizational commitment, and job performance). The psychological approach to empowerment that we have used contends that degree of empowerment is strictly perceptual. Consistent with this definition, empowerment is the extent to which the individual feels that he or she possesses work-related competence and control over work decisions and derives meaning and a sense of impact from the job. We propose that empowerment perceptions are direcdy influenced by the nature of one's job and by the individuals with whom one works directly. A job that is important and challenging contributes toward feelings of being empowered. The perception of empowerment is also enhanced by superiors and coworkers who provide technical and emotional support, delegate control over decisions, and nurture serf-efficacy. Furthermore, it is through these feelings of empowerment that one derives satisfaction and commitment to the organization and is motivated to perform well. Hypothesis 7: The empowerment dimensions (meaning, impact, competence, and self-determination) mediate the relations between the independent variables (job characteristics,, and ) and work outcomes (work satisfaction, organizational commitment, and job performance). Participants Method Participants were 337 employees and the immediate supervisors of 60 intact work groups located in three Midwest states and representing lower hierarchical levels of several major divisions of a large service organization. This organization had implemented an organizationwide empowerment initiative. The company increased the level of empowerment for individuals and work groups by delegating some supervisory responsibilities, such as planning projects and determining work assignments, to work groups. It was common for work groups to have weekly meetings to discuss pmblems and work assignments. However, they were not self-managed teams because formal supervisors were responsible for a number of managerial tasks, such as hiring new members, evaluating performance, and managing poor performers. The response rate was 85% for employees, but after dropping respondents who could not be matched to supervisors and for whom there were excessive missing data, 72% of the employees asked to participate were included in analyses. The response rate for supervisors was 100%. Among the group members, 45.4% were men, 50.4% were women, and 4.2% chose not to indicate their gender. The ethnicity of the employee sample was 71.5% White, 12.2% African American, 3.3% Hispanic, 5.3% Asian or Pacific Islander,.6% American Indian or Alaskan native,.9% other, and 6.2% people who chose not to indicate their ethnicity. Mean age of the employees was years, and mean educational level was 2 years of college. Mean tenure in the organization was 10 years and 4 months, and mean job tenure was 4 years and 3 months. The supervisor sample was composed of 56.7% men, 40.9% women, and 2.4% who chose not to have their gender reported. Eighty-one percent of the supervisor sample was White, 12.5% African American, 2.7% Hispanic, 1.8% Asian or Pacific Islander, and 2.3% who were missing data on ethnicity. Mean age of the supervisors was years, and mean level of education was a 4-year college degree. Mean tenure in the organization and in the job was 13 years and 10 months and 3 years and 11 months, respectively. The results reported here are part of a larger investigation, which includes a study focusing on empowerment and performance at the group level (Liden, Wayne, & Bradway, 1997).

5 EMPOWERMENT AND WORK OUTCOMES 411 Table 1 Means, Standard Deviations, and Correlations Variable M SD Leader-member exchange ** Team-member exchange **.20** Meaning **.27**.21"* Impact "*.30*.19"*.47** Competence "*.04.13".27**.18"* 7. Sel~determination **.33**.20**.57**.46** 8. Work satisfaction '*.30**.24**.63**.38** 9. Organizational commitment ,49"*.36**.30**.59**.42** 10. Job performance '.19"*.15"*.18"*.35**.11".45** --.16"*.43**.53**.19"*.16'*.21"*.09 Note. N = 337. *p<.05. **p <.01. Procedure Employees responded to questionnaires, and supervisors were interviewed. We collected the data at the location of the participating employees during work time and assured respondents of the confidentiality of their responses. In the interview, supervisors rated each of their subordinates on several dimensions of job performance. On average, supervisors rated 6 subordinates. Employee questionnaires and supervisor interview forms each had a code number that was used to match supervisor and employee data. We retained a master list of employees by survey identification number. Once the employee and supervisor data were matched, the master list was destroyed to maintain confidentiality of the responses. Measures. Idaszak and Drasgow's (1987) revised version of Hackman and Oldham's (1975, 1976) JDS was used to assess task identity, task significance, skill variety, and feedback from the work itself (a =.88). For example, a task significance item is, 'The job itself is very significant and important in the broader scheme of things," rated on a 7-point Likert-type scale ran#ng from 1 (very inaccurate) to 7 (very accurate). The autonomy job characteristic was not included because of redundancy with the selfdetermination dimension of empowennent: Spreitzer (1995) used modified versions of Hackman and Oldham's autonomy items to measure self-determination.. The -13 measure (Settoon, Bennett, & Liden, 1996) was used to assess (ct =.96). An example item is, "I can trust my manager to look out for my best interest," on a 7-point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree).. An 9-item scale based on Seers (1989) was used to assess (a =.88). An example item is, "When I am in a bind, my coworkers will take on extra work to help ensure the completion of my important tasks," rated on a 7-point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree). Empowerment dimensions. We used Spreitzer's (1995) 12-item empowerment scale. This scale contains 3 items for each of the 4 dimensions of empowerment. Employees indicated the extent to which they agreed with each statement on a 7-point scale ranging from 1 (strongly disagree) to 7 (strongly agree). An example item is, "I have control over what happens in my department." Construct validity of the scale has been demonstrated in two independent studies involving four organizations (Kraimer et al., 1999; Spreitzer, 1995). Each set of 3 items was summed to form the 4 dimensions of empowerment: meaning (ct =.92), impact (a =.86), competence (a =.77), and self-determination (or =.85). Work satisfaction. The 18-item Satisfaction With the Work Itself scale of the Job Descriptive Index (Smith et al., 1987) was used to measure work satisfaction (a =.81). Respondents labeled adjectives such as fascinating and routine with "yes," "no," or "cannot decide." For adjectives that connote satisfaction, such as fascinating, a "yes" was scored 3 and a "no" was scored 0. Adjectives that indicate dissatisfaction, such as routine, were reverse scored. In all cases, "cannot decide" was scored with a 1. Psychometric research has shown that undecided responses are more similar to dissatisfaction than they are to satisfaction (Smith, Kendall, & Hulin, 1969). Using a 3 (rather than a 2) for satisfaction captures this effect. Organizational commitment. The 8-item Meyer and Allen (1984) measure was used to assess affective commitment to the organization (a =.90). An example item is, "I would be very happy to spend the rest of my career with [name of company]," on a 7-point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree). Job performance. Relevant dimensions of individual job performance were identified by the participating organization's human resources department research staff. Supervisors rated each subordinate on eight dimensions of performance, such as "customer service provided," using 5-point scales with anchors of 1 (not acceptable) to 5 (superior). The dimensions were cooperation, oral communication, planning and organization, technical competence, customer service provided, quantity of work, quality of work, and overall performance (,~ =.90). Results Means, standard deviations, and correlations for all variables appear in Table 1. Prior to conducting our tests of hypotheses, we performed a confirmatory factor analysis, which showed that each of our variables represents a separate construct. ~ We followed Baron and Kenny's (1986) three-step procedure for assessing the mediating role of the empowerment dimensions. Because of the large number of items used to measure the variables, subscales served as indicators of the latent constructs. Variety, identity, feedback, and significance were indicators for job characteristics; contribution, affect, loyalty, and professional respect were indicators of ; meaning, impact, competence, and choice were indicators for empowerment. For the other variables tested (, satisfaction with work, commitment, and performance), items were randomly assigned to one of three subscales and then averaged. For the measurement model, X2(231, N = 337) = , p <.01. The goodness-of-fit index was.89, the normed fit index was.91, the comparative fit index was.96, and the root-mean-square residual was.05. The loadings of the subscales on their respective constructs were significant (p <.01). Overall, the fit statistics indicated that the measurement model provides a good fit to the data.

6 412 LIDEN, WAYNE, AND SPARROWE Table 2 Mediators Regressed on Independent Variables Mediator and variable F df Adjusted R 2 13 Mediator: meaning 55.13"* 3, ** Mediator: impact 43.05** 3, **.14**.05 Mediator: competence 3.75* 3, " Mediator: self-determination 37.70** 3, **.18"*.06 Note. = leader-member exchange; = team-member exchange. *p<.05. **p<.01. First, the independent variables should be significantly related to the mediator variables; second, the independent variables should be related to the dependent variables; and third, the mediating variables should be related to the dependent variables with the independent variables included in the equation. If the first three conditions hold, at least partial mediation is present. If the independent variables have nonsignificant beta weights in the third step, then complete mediation is present. We regressed the mediators (meaning, impact, competence, and self-determination) on the independent variables (job characteristics,, and ). Satisfying the first requirement for mediation and providing strong support for Hypothesis 1, the beta weights for job characteristics were significant for all four empowerment dimensions as shown in Table 2. The beta weights for were significant for impact and self-determination as the mediators but not for meaning or competence. However, none of the beta weights for were significant for the empowerment dimensions as mediators. The zero-order correlations between and and the four empowerment dimensions were all significant, but both variables were dominated by job characteristics in the regression analysis. Thus, partial support was provided for Hypothesis 2, and no support was found for Hypothesis 3. Next, we regressed the dependent variables on the independent variables (Table 3). Satisfying the second requirement of mediation, the beta weights for job characteristics and were significant for work satisfaction and organizational commitment, but the beta weight for job performance as the dependent variable was not significant, The beta weights for were significant for all three dependent variables. To test the third step of mediation, we regressed the dependent variables on the mediating variables, with the independent variables included in the equations (Table 4). With job characteristics,, and in the equations, the beta weights for meaning were significant for work satisfaction and organizational commitment. The beta weights for competence were significant with work satisfaction and job performance as the dependent variables. Impact and self-determination were not significant for any of the Table 3 Dependent Variables Regressed on Independent Variables Variable F df A~ustedR 2 /3 Dep. var.: work satisfaction Dep. var.: organizational commitment Dep. var.: job performance 43.87** 3, ** 3, ** 3, **.13".10*.38**.19"*.17"* "* Note. Dep. var. = dependent variable; = leader-member exchange; = team-member exchange. *p <.05. **p<.01.

7 EMPOWERMENT AND WORK OUTCOMES 413 Table 4 Dependent Variables Regressed on Mediators (With Independent Variables Included) Variable F df A~usted R 2 Dep. var.: work satisfaction Meaning Impact Competence Self-determination Dep. var.: organizational commitment Meaning Impact Competence Self-determination Dep. var.: job performance Meaning Impact Competence Self-determination 39.42** 7, "* 7, ** 7, "* ** " "*.14"*.40**.10? "* "*.02 Note. Dep. vat. = dependent variable; = leader-member exchange; = team-member exchange.?p<.062. *p<.05. **p<.01. dependent variables, thus not passing this requirement for mediation. Thus, partial support was found for Hypotheses 4, 5, and 6. Next, we examined all cases in which the first three conditions of mediation had been met to ascertain whether complete or partial mediation was present. As shown in Table 4, four out of nine beta weights (job characteristics with work satisfaction,, and with organizational commitment, and with job performance) for independent variables were significant, ruling out complete mediation in these cases. Support for complete mediation was present for job characteristics ~ meaning ~ organizational commitment. Evidence of partial mediation was present for job characteristics ~ meaning ~ work satisfaction and for job characteristics ~ competence ~ work satisfaction. Despite the relative lack of mediation effects, both and showed significant direct effects for organizational commitment, even when included in the regression equation with job characteristics and the empowerment dimensions. Similarly, demonstrated a significant direct effect for job performance when tested with job characteristics,, and the empowerment dimensions. Thus, both empowerment and social exchanges in the form of and made significant contributions in explaining variation in organizational commitment and job performance. 2 Discussion A number of theoretical implications may be derived from the results. One of the more important implications follows from the direct (unmediated) relationships between and and the dependent variables (satisfaction, commitment, and performance). A more complete understanding of attitudes and behaviors in organizations requires recognition of both task and interpersonal domains. Focusing only on degree of empowerment provides an incomplete picture of attitudes and behaviors, just as focusing on 2 Because these data were gathered from extant work groups, it is possible that the observed relationships reflect group-level rather than individual-level covariation. We conducted a with-and-between analysis (WABA; Dansereau, Alutto, & Yammarino, 1984) to verify that our results reflected relationships occurring at the individual level of analysis. We first assessed whether the observed variation in our measures was at the individual rather than the group level of analysis using WABA I (Dansereau et al., 1986). All of the variables displayed larger within-eta correlations than between-eta correlations. The practical significance of the difference between within-eta and between-eta correlations was evaluated using the angle test. With the exception of performance, the test of practical significance supported the inference that variation in the measures occurred at the individual level of analysis. With respect to performance, the between-eta and within-eta correlations were not significantly different, suggesting that variation in performance was occurring at both individual and group levels of analysis. It is also possible that the observed relationships among variables occurred at the group rather than the individual level of analysis. We thus evaluated whether the observed bivariate relationships specified in our hypotheses were consistent with interpretation at the individual level of analysis using WABA 1I (Dansereau et al., 1986). The results indicated that all of the relationships, with one exception, were equivocal. Equivocal, in WABA, means that both within-eta and between-eta correlations were greater than zero but not significantly different from each other. The exception was the relationship between and performance, in which the between-eta correlations were significantly greater (by the angle test of practical significance) than the within-eta correlations, indicating group-level effects. Thus, with very few exceptions, the WABA results confirmed that our variables and the relationships among them can be interpreted at the individual level of analysis.

8 414 LIDEN, WAYNE, AND SPARROWE interpersonal relationships to the exclusion of empowerment is inadequate. Empowerment, dominated by the meaning and competence dimensions, showed relations with all three outcome variables. Augmenting these significant effects for empowerment, and both explained unique variance in organizational commitment, and also showed an association with job performance. These results indicate that although attitudes about the work itself may be dominated by job characteristics perceptions (as they operate through empowerment), interpersonal relationships are salient with respect to organizational commitment and job performance. Important in determining levels of commitment to the organization are the support and guidance that one receives from relationships formed with the immediate superior and coworkers. Results of our study also demonstrate the positive effects that coworkers, as assessed by, may have on an individual's job performance. All participants in the research were involved in an organizationwide empowerment initiative. In an environment in which decision-making influence was being shifted from formal managers to work group members, coworker emotional support and guidance appeared to assist peers in attaining higher levels of performance. Interestingly, the support and guidance provided by the immediate superior were not related to job performance. Thus, although did not appear to be related to empowerment relative to job characteristics mad, it showed direct relations with both commitment and job performance. Future research that includes group as well as individual levels of analysis is needed to more fully understand the role of team-member interactions and group process on empowerment and outcomes. The mediating effects that we uncovered involved the meaning and competence dimensions of empowerment in the relations between job characteristics and work satisfaction and organizational commitment. These results suggest that the meaning and competence dimensions may play the role of the psychological states proposed in Hackman and Oldham's (1976) job characteristics model. Two previous studies have suggested that empowerment may be theoretically similar to psychological states in the mediating role that it plays with respect to intrinsic work motivation (Gagn6 et al., 1997) and commitment (Kraimer et al., 1999). However, neither of these investigations explicitly tested the indirect effects of job characteristics through empowerment as we did in our study. The mediation effects also have implications for the interpretation of the many job design studies that have tested direct effects between job characteristics and work outcomes while excluding mediators such as psychological states or empowerment (Renn & Vandenberg, 1995). Our results indicate that job characteristics not only have direct effects on satisfaction, as shown in previous research (Fried & Ferris, 1987; Loher, Noe, Moeller, & Fitzgerald, 1985), but also indirect effects that are mediated by the meaning and competence dimensions of empowerment. Similarly, studies that have examined the relation between job characteristics and organizational commitment have not tested mediating effects (Mathieu & Zajac, 1990). The results of the current investigation indicate that the meaning dimension of empowerment completely mediates the relationship between job characteristics and organizational commitment. The main strengths of this investigation are the size and diversity of the sample and independent source and method for the assessment of job performance. Another strength is the measurement of both job and interpersonal domains in the examination of empowerment. Few empirical investigations of empowerment have been conducted, and they have tended not to include measures of competing constructs such as job characteristics and interpersonal relationships. Also rare is the simultaneous examination of antecedents and outcomes of empowerment, especially studies that include data collected from multiple sources as in our study. Perhaps the main weakness of the study is that results pertaining to work satisfaction and organizational commitment may be susceptible to common method variance. Another weakness of our study was the cross-sectional design, which does not allow for an assessment of causality. Thus, we do not know if the common assumption that empowerment causes work satisfaction is valid. An alternative explanation is that people who are happy with their work may be more inclined to claim that they are empowered. Similarly, rather than the competence dimension of empowerment influencing job performance, it is plausible that individuals develop a sense of competence as a result of performing well. There are several practical implications for supervisors and organizations. First, empowerment may be more than a passing fad (Abrahamson, 1996). Empowering individuals may result in higher levels of work satisfaction, organizational commitment, and job performance. Furthermore, empowerment appears to complement relationships with the immediate supervisor and coworkers in the determination of commitment and performance. Because employees benefit from immediate supervisors as well as empowerment, organizations should exhibit caution before reducing or eliminating the managerial ranks (Manz & Sims, 1987). Also, the positive influence of on organizational commitment and job performance point to continued efforts designed to improve group process and interaction. To extend the findings of our study, we recommend three areas for future investigations. First, longitudinal research is needed to assess issues of causality. Second, it would be desirable for future studies combining interpersonal relationships and empowerment to include contextual variables of importance, such as organizational culture or top-level support for empowerment initiatives. Third, the integration of empowerment with interpersonal relationships may assist in understanding outcomes not included in the current investigation, such as turnover and organizational citizenship behaviors. References Abrahamson, E. (1996). Management fashion. Academy of Management Review, 21, Arad, S., & Drasgow, F. (1994, April). Empowered work groups: Conceptual framework and empirical assessment of empowerment processes and outcomes in organizations. Paper presented at the annual meeting of the Society of Industrial and Organizational Psychologists, Nashville, TN. Bandura, A. (1982). 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Self-efficacy: A theoretical analysis of its determinants and malleability. Academy of Management Review, 17, Graen, G. (1976). Role-making processes within complex organizations. In M. D. Dunnette (Ed.), Handbook of industrial and organizational psychology (pp ). Chicago: Rand McNally. Graen, G., & Cashman, J. F. (1975). A role making model in formal organizations: A developmental approach. In J. G. Hunt & L. L. Larson (Eds.), Leadership frontiers (pp ). Kent, OH: Kent State Press. Graen, G. B., & Uhl-Bien, M. (1995). Development of leader-member exchange () theory of leadership over 25 years: Applying a multilevel multi-domain perspective. Leadership Quarterly, 6, Greenberger, D. B., Strasser, S., Cummings, L. L., & Dunham, R. B. (1986). The impact of personal control on performance and satisfaction. Organizational Behavior and Human Decision Processes, 43, Griffin, R. W. (1987). Toward an integrated theory of task design. Research in Organizational Behavior, 9, Hackman, J. R., & Lawler, E. (1971). Employee reactions to job characteristics. Journal of Applied Psychology, 55, Hackman, J. R., & Oldham, G. R. (1975). Development of the job diagnostic survey. Journal of Applied Psychology, 60, Hackman, J. R., & Oldham, G. R. (1976). Motivation through the design of work: Test of a theory. Organizational Behavior and Human Performance, 16, Herzberg, F., Mausner, B., & Snyderman, B. B. (1959). The motivation to work (2rid ed.). New York: Wiley. HoUenbeck, J. R., Ilgen, D. R., Sego, D. J., Hedlund, J., Major, D. A., & Phillips, J. (1995). Multilevel theory of team decision making: Decision performance in teams incorporating distributed expertise. Journal of Applied Psychology, 80, Idaszak, J. R., & Drasgow, F. (1987). A revision of the Job Diagnostic Survey: Elimination of a measurement artifact. Journal of Applied Psychology, 72, Keller, T., & Danserean, F. (1995). Leadership and empowerment: A social exchange perspective. Human Relations, 48, Kraimer, M. L., Seibert, S. E., & Liden, R. C. (1999). Psychological empowerment as a multidimensional construct: A construct validity test. Educational and Psychological Measurement, 59, Kramer, M. W. (1995). A longitudinal study of superior-subordinate communication during job transfers. Human Communications Research, 22, Lewin, K. (1947). Frontiers in group dynamics: Concept, method and reality in social science, social equilibria and social change. Human Relations, 1, Liden, R. C., & Arad, S. (1996). A power perspective of empowerment and work groups: Implications for human resources management research. Research in Personnel and Human Resources Management, 14, Liden, R. C., & Graen, G. (1980). Generaiizability of the vertical dyad linkage model of leadership. Academy of Management Journal, 23, Liden, R. C., Sparrowe, R. T., & Wayne, S. J. (1997). Leader-member exchange theory: The past and potential for the future. Research in Personnel and Human Resources Management, 15., Liden, R. C., & Tewksbury, T. W. (1995). Empowerment and work teams. In G. R. Ferris, S. D. Rosen, & D. T. Barnum (Eds.), Handbook of human resources management (pp ). Oxford, England: Blackwell. Liden, R. C., Wayne, S. J., & Bradway, L. K. (1997). Task interdependence as a moderator of the relation between group control and performance. Human Relations, 50, Loher, B. T., Nee, R. A., Moeller, N. L., & Fitzgerald, M. P. (1985). A meta-analysis of the relation of job characteristics to job satisfaction. Journal of Applied Psychology, 70, Major, D. A., Kozlowski, S. W., Chao, G. T., & Gardner, P. D. (1995). A longitudinal investigation of newcomer expectations, early socialization outcomes, and the moderating effects of role development factors. Journal of Applied Psychology, 80, Manz, C. C., & Sims, H. P., Jr. (1987). Leading workers to lead themselves: The external leadership of self-managing work teams. Administrative Science Quarterly, 32, Martinko, M. J., & Gardner, W. L. (1982). Learned helplessness: An alternative explanation for performance deficits. Academy of Management Review, 7, Mathieu, J. E., & Zajac, D. M. (1990). A review and meta-analysis of the antecedents, correlates, and consequences of organizational commitment. Psychological Bulletin, 108, Meyer, J. P., & Allen, N. J. (1984). Testing the "side-bet theory" of organizational commitment: Some methodological considerations. Journal of Applied Psychology, 69, Renn, R. W., & Vandenberg, R. L (1995). The critical psychological states: An underrepresented component in job characteristics model research. Journal of Management, 21, Scandura, T. A., Graen, G. B., & Novak, M. A. (1986). When managers decide not to decide autocratically: An investigation of leader-member exchange and decision influence. Journal of Applied Psychology, 71, Schriesheim, C. A., Neider, L. L., Scandura, T. A., & Tepper, B. J. (1992). Development and preliminary validation of a new scale (-6) to measure leader--member exchange in organizations. Educational and Psychological Measurement, 52, Seers, A. (1989). Team-member exchange quality: A new construct for

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