Examining the mediating role of psychological empowerment in the relationship between transformational leadership and employee performance of Sabah public sector / Aminah Ahmad

In this era of globalisation, rapid and ever-changing economic and political landscape,
employee performance is the highest priority of management, including the government
sector. Employee performance is crucial to the organisation’s success and a pressing
issue in the last few decades. Therefore, this study aims to examine the mediating role
of psychological empowerment between transformational leadership and employee
performance in the public service sector of Sabah. Four hypotheses were tested using a
newly developed model based on social exchange theory and transformational
leadership. This study employed a quantitative study method using the questionnaire
survey instrument. A non-probability sampling technique using the purposive sampling
method was applied. The questionnaire was distributed to 380 employees of Support
Group 1 & 2, ranging from Grade 19 to Grade 40; 286 questionnaires were successfully
collected. Data collected were analysed using SmartPLS Version 3.3.3 and analysed to
fulfill the research objectives. The results indicate that transformational leadership has
an indirect significant effect on employee performance mediated by psychological
empowerment. However, transformational leadership has no direct significant effect on
employee performance in Sabah public sector. The findings of this study suggest that
psychological empowerment has a significant does mediate the relationship with
transformational leadership and employee performance.