Employee Empowerment, Employee Attitudes, and Performance: Testing a Causal Model


  • Sergio Fernandez is associate professor in the School of Public and Environmental Affairs at Indiana University Bloomington. His research focuses on privatization and government outsourcing, organizational change, leadership, and employee empowerment. E-mail: sefernan@indiana.edu

  • Tima Moldogaziev is assistant professor of public fi nance and public management at the University of South Carolina. His research focuses on organizational behavior as it relates to empowerment, innovation, and performance in the public sector, contracting, and resource management. He also publishes on matters of subnational debt management, fi nancial intermediation and regulation, and municipal securities pricing and liquidity. E-mail: tima.tm@sc.edu


The last three decades have witnessed the spread of employee empowerment practices throughout the public and private sectors. A growing body of evidence suggests that employee empowerment can be used to improve job satisfaction, organizational commitment, innovativeness, and performance. Nearly all previous empirical studies have analyzed the direct effects of employee empowerment on these outcome variables without taking into account the mediating role of employee attitudes. This article contributes to the growing literature on employee empowerment by proposing and testing a causal model that estimates the direct effect of employee empowerment on performance as well as its indirect effects as mediated by job satisfaction and innovativeness. The empirical analysis relies on three years of data from the Federal Human Capital Survey/Federal Employee Viewpoint Survey and a structural equation modeling approach, including the use of lagged variables. The results support the hypothesized causal structure. Employee empowerment seems to have a direct effect on performance and indirect effects through its influence on job satisfaction and innovativeness, two key causal pathways by which empowerment practices influence behavioral outcomes.