The effect of authentic leadership and psychological capital on work engagement amongst employees in leadership positions at Standard Lesotho Bank

Organisations today are struggling with the challenges in their efforts to remain competitive. They need to enhance the talents and engagement of all their employees if they are to achieve peak performance, as engaged employees yield direct economic benefits to the organisation. The concept of work engagement plays an important role in this endeavor. The assumption of this study was that certain variables influence work engagement and it is therefore important to gain an understanding of these antecedents of work engagement. More specifically, the current study sought to answer the following question: does authentic leadership and psychological capital (self-efficacy, hope, optimism, resilience) have an effect on work engagement amongst employees in the banking sector in Lesotho? The primary aim of the study was to determine the effect of authentic leadership and psychological capital on work engagement amongst employees in the banking sector in Lesotho. The secondary aim was to determine whether differences exist in work engagement with regard to age amongst employees in the banking sector in Lesotho. A discussion of the relationship between the variables was discussed in the study. Both survey and statistical modeling methodologies were employed to guide the investigation. In order to conduct the survey research, questionnaires were used as the method of data gathering. In total, 299 questionnaires were returned by employees and consisted of four sections that had to be completed. The measuring instruments included the Utrecht Work Engagement Scale (UWES), the Authentic Leadership Questionnaire (ALQ) and the Psychological Capital Questionnaire (PsyCap) (self and other rater). The goodness-of-fit statistics associated with each of the four constructs was determined and the results indicated that all the constructs are valid and reliable measures for this study. The current study found that Relational Transparency (β = 0.736) was the strongest predictor of employees’ levels of engagement. Authentic leaders are able to enhance the engagement of employees by strengthening their identification with the leader and organisation. By actively involving and developing employees, authentic leaders increase employees work engagement and also by promoting more rapid and accurate transfer of information is most likely expected to facilitate more effective employee performance and engagement. A significant positive correlation existed between PsyCap (other rater) and work engagement (r = 0.718). One of the elements of the PCQOR is efficacy/confidence. In addition, efficacy/confidence of the leader was the second best predictor of employees’ levels of engagement (β = 0.248). Self-efficacious employees are able to meet their work goals, and to be persistent in the face of difficulties. As a result, engagement occurs through the facilitation of goal attainment. Manager’s self-efficacy may be related to employee engagement because as the manager’s employees become more engaged in their work, the manager gains confidence and belief in her/his abilities to create and build an engaged team or group successfully. A team led by an efficacious manager, results in desired unit/organisational outcomes. Employees’ levels of hope were the third best predictor of their levels of work engagement (β = 0.099). A significant positive correlation also existed between PCQSR and work engagement (r = 0.520). Employees high in hope are said to be more engaged in their work since they have more goal orientated strategies and are more motivated to goal achievement. In turn, these employees perform well in service delivery and complaint-handling processes. The fourth and final predictor of employees’ levels of work engagement was their managers’ levels of optimism. (β = 0.139). A significant positive correlation was also found between PCQOR and work engagement (r = 0.718). Optimistic managers always strive for positive outcomes and are likely to believe in their potential and that of their subordinates regardless of previous failures. These qualities help them to be energetic, maintain their perseverance in the face of demands, and most importantly enable engagement. Managers who possess high levels of optimism maintain a positive perspective and do not make disasters out of setbacks. In addition, employees from the age group 55 years and older scored higher on engagement than the younger employees (younger than 35 years). The 55 years and older we found to be more engaged than the other three groups. Older employees are more content with their employer and particular working conditions which makes them to be more engaged. They have a clear vision of their place within the organisation and possible resultant career paths and they are characterised by the highest overall engagement levels which assumes not only a high contribution rate but also high attraction to their job and employer. In conclusion, further work is needed on differentiating authentic leadership from existing theories of leadership such as transformational, charismatic, inspirational and servant leadership. Further research also needs to be explored on how some other leadership theories might be connected to authentic leadership. Future research should also try to compare multiple measures of psychological capital to determine appropriate psychometric validity. Further theory development may also be gained by analysing psychological capital as an antecedent to authentic leadership rather than just an outcome or mediator. Interventions of work engagement should try to focus on both individuals and the organisation at large. Furthermore, it is worth focusing on the mechanisms through which work engagement leads to favorable outcomes by getting insight in the processes that it initiates or is involved in. this can help not only to achieve better performance but also to increase chances for better career development.