Modeling time-lagged reciprocal psychological empowerment-performance relationships

Employee psychological empowerment is widely accepted as a means for organizations to compete in increasingly dynamic environments. Previous empirical research and meta-analyses have demonstrated that employee psychological empowerment is positively related to several attitudinal and behavioral outcomes including job performance. While this research positions psychological empowerment as an antecedent influencing such outcomes, a close examination of the literature reveals that this relationship is primarily based on cross-sectional research. Notably, evidence supporting the presumed benefits of empowerment has failed to account for potential reciprocal relationships and endogeneity effects. Accordingly, using a multiwave, time-lagged design, we model reciprocal relationships between psychological empowerment and job performance using a sample of 441 nurses from 5 hospitals. Incorporating temporal effects in a staggered research design and using structural equation modeling techniques, our findings provide support for the conventional positive correlation between empowerment and subsequent performance. Moreover, accounting for the temporal stability of variables over time, we found support for empowerment levels as positive influences on subsequent changes in performance. Finally, we also found support for the reciprocal relationship, as performance levels were shown to relate positively to changes in empowerment over time. Theoretical and practical implications of the reciprocal psychological empowerment-performance relationships are discussed.