MODELING THE INFLUENCE OF PSYCHOLOGICAL EMPOWERMENT AND PSYCHOLOGICAL CAPITAL ON EMPLOYEE ENGAGEMENT IN AUTOMOTIVE SECTOR USING SMART PLS

Abstract

This study investigates the impact of psychological empowerment and psychological capital on employee engagement within India’s automotive manufacturing sector. A cross-sectional survey design was adopted, and data were collected from 432 employees working in various managerial positions across Mysuru and Bengaluru. Using Exploratory Factor Analysis (EFA) and Structural Equation Modeling (SEM) through SmartPLS, the study assessed the relationships among psychological constructs. The measurement model exhibited satisfactory validity and reliability with composite reliability values above 0.8 and average variance extracted (AVE) exceeding 0.5. Model fitness indices indicated an acceptable fit (SRMR = 0.0731, NFI = 0.915). The results confirmed that both psychological capital and psychological empowerment significantly and positively influence employee engagement (p < 0.05). These findings underscore the importance of fostering optimism, resilience, autonomy, and meaning at the workplace to enhance employee involvement and organizational effectiveness. The study provides actionable insights for practitioners to design development interventions that strengthen employees’ psychological resources and engagement levels.