Improving Engagement: The Moderating Effect of Leadership Style on the Relationship Between Psychological Capital and Employee Engagement

The purpose of this study is to investigate the moderating effect that different leadership styles (Transformational, Transactional, and Passive-Avoidant) can have on the relationship between Psychological Capital and Employee Engagement. Additionally, it explores the direct positive relationship that Psychological Capital and Transformational Leadership have on Employee Engagement. This study examines 238 adults that work at least 20 hours a week. The results show that Psychological Capital and Transformational Leadership have strong, positive effects on Employee Engagement and Transformational Leadership positively moderates the direct relationship between Psychological Capital and Employee Engagement. The importance of Psychological Capital in its relationship to Employee Engagement depends on the level of Transformational Leadership present in the relationship. Discussion and future study recommendations are included