The impact of employee empowerment on organizational performance: a mediating role of employee engagement and organisational citizenship behaviour

Abstract

Purpose: This study assesses the mediating role of employee engagement and organisational citizenship behaviour in the relationship between employee empowerment (structural, psychological) and organisational performance in non-commercial banks in Ghana. Design/methodology: A structural equation modelling (SEM) was used to test the proposed hypothesis based on 304 employees selected from eight non-commercial banks in the Bono Region, Ghana. Findings: Neither structural nor psychological empowerment are a direct contributor to organisational performance but they positively influence organisational citizenship behaviour and employee engagement. Employee engagement and organisational citizenship behaviour show no effect on organisational performance. Organisational citizenship behaviour was also found to be a significant mediator in the relationship between employee empowerment (structural and psychological) and organisational performance but employee engagement is not a significant mediator. Practical implications: The study offers managers information to help deal with absenteeism, increase employee psychological health, promote better home life, improve employee retention and increase job satisfaction. Practitioners are offered insights to help involve their employees in decision-making and offer them the freedom to act on their own. Finally, practically, the results reveal the need to retain employees who have organisational citizenship behaviour to improve performance. Originality/value: The study serves two purposes: as a confirmatory and as a hypothesised model. The confirmatory model entails goodness of fit and chi-square test. The hypothesised model relies on examining the interactions among structural and psychological empowerment, organisational citizenship behaviour, employee engagement and organisational performance in a developing economy.