“THE RELATIONSHIP BETWEEN PSYCHOLOGICAL EMPOWERMENT AND MONETARY COMPENSATION AND MEDIATING ROLE OF INTRINSIC MOTIVATION: AN EMPIRICAL STUDY CONCERNING THE IT SECTOR EMPLOYEES”

Abstract

This empirical study was carried out study to assess the relationship between psychological empowerment, intrinsic motivation and monetary compensation. Further, the authors studied intrinsic motivation as a pathway nexus between on psychological empowerment and monetary compensation. This empirical research also modelled intrinsic motivation and psychological empowerment as higher order constructs to test the relationships. The data were gathered using a questionnaire to measure eight reflective constructs: psychological empowerment with 4 sub-dimensions – meaning, competence, self-determination and impact, intrinsic motivation with sub-dimensions – effort, perceived competence and interest, the last construct is monetary compensation with 5 items. The data from the 500 subjects were analyzed for exploratory, confirmatory factor analysis, and SEM analysis using IBM SPSS AMOS. The model fit was excellent for both the lower order constructs and higher-order constructs as revealed by modification indices. All the constructs are positive and statistically significant (p<0.05; p<0.001) influencing the monetary compensation. The intrinsic motivation partially mediating the relationship between psychological empowerment and monetary compensation. The study suggested that employees be psychologically empowered with appropriate monetary compensation to motivate them and enhance their performance.