1. Introduction
The changing retail sector's environment is necessary for the success of all organizations, and leadership influences employee motivation. Leadership styles tend to shape employees' motivation, which, consequently, affects the quality and satisfaction of their jobs. The connection between job autonomy and employee mental health can be transformed through psychological empowerment, a feeling of control, proficiency, and influence at work (Ambad et al., 2021).
The retail market is recognized for its fierce competition, gatekeepers, rapidly changing customer behavior, and high job turnover among staff. Effective leadership is one of the most critical factors in overcoming these challenges and enhancing staff engagement and productivity. Even though the precise association between these leadership styles and motivation in the retail setting is relatively obscure, psychological empowerment can indeed be considered a significant motivational factor and performance enabler, which includes, among other things, employees realizing that they control their work and that they can do their job well. The ability of psychological empowerment to mediate between leadership and motivation can be a vital insight for managers that will help them with employee engagement and retention.
Several kinds of research have centered around the relationship between leadership styles and employee outcomes through the intermediation of psychological empowerment. For instance, Ambad et al. (2021) noted that psychological empowerment is a mediating factor in the relationship between leadership styles and academic staff task performance. Similarly, Saira et al. (2021) showed that employee outcomes mediate between transformational leadership and psychological empowerment. In addition, Liu and Ren (2022) explored the mediating role of psychological empowerment between perceived leader trust and employee work performance, with confidence in leadership being highlighted as essential. Also, Rafique et al. (2021) examined how leaders' motivational language influenced innovative work behavior and how psychological empowerment mediated this relationship.
Another factor that significantly influences employee performance is psychological empowerment. Based on the article by Safari et al. (2020), psychological empowerment positively affects organizational commitment, productivity, and job burnout, which is reflected in the organization's competitive advantage. This explains the role of psychological empowerment in managing interconnectedness between leadership and motivation in retail organizations.
While much research on psychological empowerment and its mediating impact has been done, there is still a need for further studies regarding its particular function in the relationship between leadership styles and staff motivation in retail stores. This study aims to bridge the knowledge gap by investigating psychological empowerment as a mediator between leadership styles and motivation among retail store workers. Identifying this intermediary role is imperative for retail managers and leaders because it gives information on utilizing compelling motivation in the retail sector.
By determining the leadership style that enhances psychological empowerment and motivation, managers can build strategies that will help improve staff engagement and performance. Lastly, this study aims to fill the existing gap in the existing literature by investigating the mediating effect of psychological empowerment between leadership and motivation for workers at retail stores. The study aims to extend the previous research to determine the preferences of the researchers and practitioners in leadership and employee motivation in retail through a systematic approach.
Figure 1: Research Model
2. Literature Review
The Several studies have been conducted on the relationships between leadership styles, psychological empowerment, and motivation in organizational environments. This section examines the prominent scholars writing on this subject to thoroughly realize the mediating role of psychological empowerment in mediating the relationship between leadership and store workers' motivation.
2.1. Transformational Leadership and Psychological Empowerment
The primary research focus is the impact of transformational leadership through the psychological empowerment of employees. This part of the essay is built on literature as the foundation for discussing the link between transformational leadership and psychological empowerment. Transformational leaders can allow followers to break through limitations, attain their goals, and go beyond better achievements. By applying this leadership style, the psychological empowerment of employees is greatly enhanced (Schermuly & Meyer, 2020). According to Ambad et al. (2021), educational institutions with transformational leaders can improve the sense of work significance and direction for the staff and cement psychological empowerment.
Also, Saira et al. (2021) revealed that transformational leadership and psychological empowerment correlate positively. Visionary leaders are consciously observing indicators of a germinating work environment, such as employee decisions stimulating the psychological empowerment of the employees. In addition, Rafique et al. (2021) illustrated that a leader's motivational language heightens innovative work behaviors in the service sector among Chinese employees. With this, leaders can improve performance at work as their staff become convinced of their abilities and their confidence increases, which boosts psychological empowerment.
Moreover, Liu and Ren (2022) assessed psychological empowerment as a mediating factor between perceived leader trust and employee work performance. This research revealed that trust between transformational leaders and their employees could build the psychological empowerment of the workers and, thus, their performance.
Furthermore, the authors Aggarwal et al. (2020) explored the connections between leader-member exchange, job engagement, psychological disengagement behavior, and psychological empowerment, whereby the latter acted as a mediating factor. They found out that Transformational leaders with good relations with the workers show this by increasing the work engagement of the workers and reducing their work psychological withdrawal behaviors. The literature indicates that there is a connection between transformational leadership and the psychological empowerment of team members. Transformational leaders who are a source of motivation and inspiration can provide workers with an atmosphere in which they can assume full responsibility for their work and organize the work process in a way that contributes to achieving organizational goals. The interrelationship between transformational leadership and psychological empowerment in enriching motivation and performance levels in retail store workers is perfectly explained here.
2.2. Psychological Empowerment and Motivation
Psychological empowerment, a central tenet of organizational psychology, is when individuals feel that they have the power to control their work and can make a significant impact. This aspect reveals the function of psychological empowerment and motivation for retail employees, where the latter depends on the former. Safari et al. (2020) explored the connection between psychological empowerment, job burnout, and competitive advantage. The researchers realized that the more engaged, emotionally empowered employees are the most motivated and least prone to burnout, leading to a competitive advantage. Furthermore, Rania et al. (2021) studied the role of psychological empowerment in affecting workers' performance.
Consequently, staff productivity will increase due to the employees being well-motivated to discharge their functions. Furthermore, Khan et al. (2021) explored the impact of transformational leadership and emotional intelligence as crucial elements of innovation and psychological empowerment as a mediating agent. This study implies that employees who are empowered are engaged both psychologically and creatively, with a resultant increase in their motivation and performance level. Likewise, Aggarwal et al. (2020) looked at the leader-member exchange, work engagement, and psychological withdrawal behavior, wherein psychological empowerment was their intermediate variable.
The research demonstrated that empowered employees tend to exhibit lesser absenteeism and turnover rates and reported higher levels of job satisfaction. Soleimani et al. (2023) also investigated the relationship between internal branding, organizational financial performance, and brand loyalty, where psychological empowerment was a mediating factor in their research. It was uncovered that employee psychic empowerment improved organizational commitment and, thus, financial performance and customer loyalty. The study notes that psychological empowerment is the primary source of empowerment for retail workers. Those encouraged and self-driven employees could stand out from the crowd and contribute significantly to the company's revenue. This is exhibited in the link between psychological empowerment in the working environment and the involvement of employees' productivity in retail stores.
2.3. The Mediating Role of Psychological Empowerment
Psychological empowerment is an indispensable intervening variable that links leadership and motivation in the retail sector. The company's leadership style shapes whether the employees, especially those working in the retail stores, are motivated and dedicated. Thus, psychological empowerment may mediate the relationship between leadership and motivation. Besides, Nguyen et al. (2023) examined psychologically empowered entrepreneurial culture and innovative work behavior as mediators. The research showed that psychological empowerment was a significant mediator, meaning individuals who feel empowered will be more creative, mainly when the context is entrepreneurial.
Further, Kariuki et al. (2022) examined the mediation of psychological empowerment between transformational leadership and staff retention among microfinance organizations in Kenya. Psychologically empowered employees will stay with the company when their transformational leaders empower them.
Furthermore, Qiu et al. (2021) investigated the moderating effect of empowering customer psychology on stimulating customer citizenship behavior through service climate. Empowering customers through service climate studies was shown to moderate the relationship between service climate and customer citizenship behavior, elucidating the role of empowering customers to perform their behavior better. On the other hand, Pasha and Rehman (2020) study how transformational leadership and psychological empowerment contribute to individuals feeling meaningful, with organizational culture functioning as a mediating variable. They determined that psychological empowerment mediated transformational leadership and meaningful work, implying that a more empowered workforce perceived their job tasks as meaningful.
Finally, Rani et al. (2021) examined the relationship between high-performance work systems (HPWS), psychological empowerment (PE), and service employees' performance (SEP) in the automotive retail business. They reported that psychological empowerment was a partial mediator between HPWS and SEP; hence, the contribution of employee empowerment is noteworthy for better performance.
2.4. Research Gap and Contribution
Studies have examined individual relationships between leadership styles, psychological empowerment, and motivation, but the research directly dedicated to the retail context is insufficient. This research aims to fill the gap in the knowledge of how various leadership styles affect psychological empowerment, leading to the motivation of workers in retail stores. Through empirical evidence on this connection, the research will add to existing literature sources and provide practical guidance to retail managers to boost employees' motivation and efficiency. The reviewed literature findings indicate that transformational leadership contributes to psychological empowerment, which, in turn, increases employees' motivation. The intermediary role of psychological empowerment in the relationship between leadership and motivation illuminates the significance of empowering employees for better motivation and performance in the retail industry.
Table 1: Summary of Theoretical Background
Table 2: Summary of Research Gap
3. Research Design
This research used a systematic approach to the mediation effect of psychological empowerment on the relationship between leadership and employee motivation in retail stores. To ensure completeness, systematization, and transparency, the preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) approach was applied (Mishra & Mishra, 2023; Kang, 2022).
The first part of the methodology was conducted by identifying relevant studies in a systematic search, which was performed in several academic databases such as PubMed, Scopus, and Google Scholar. For instance, the keywords "psychological empowerment" and "leadership" were intended for related studies. Searches were conducted from the beginning of every database until today. After the studies are identified, the screening excludes studies that do not meet the inclusion criteria (Mishra & Mishra, 2023; Guzak & Kang, 2018). The selection of the studies was based on the impact of leadership styles on the psychological empowerment and motivation of people working in stores. We did not consider papers that were not specifically devoted to these relationships or were not published in peer-reviewed journals.
Figure 2: Methodology of the Study
The second step was identifying crucial data from the selected articles, including the main findings, research methods, and description of samples. However, the insights that led to the conclusion were obtained through data synthesis, where standard lines with a mediating role of psychological empowerment were identified. Two reviewers screened and selected the articles to ensure reliable and accurate results (Peixoto et al., 2021; Woo & Kang, 2020). All the problems were discussed, and the decisions were made unanimously. Secondly, this research was determined by the set standards, such as the methodology and the robustness of the findings (Nantharath et al., 2016).
The research methodology ensures a transparent and reliable identification, selection, and synthesis of the current literature on psychological empowerment's intermediary role. Adherence to PRISMA marks the beginning of a systematic and comprehensive literature review, giving way to a firm foundation for further analysis and discussion in the next section (McGowan et al., 2020).
4. Findings
4.1. Mediating Role 1: Empowering Leadership Styles
Empowering leadership style (also known as transformational leadership) creates a basis for effective management of the psychological state of the employees and their motivation in the retail industry. The characteristics of a transformative leader are vision, belonging, and growth to inspire and motivate the members of an organization. As a result, the strength of their psychological empowerment is significantly higher (Schermuly & Meyer, 2020). Research has demonstrated that transformational leaders impact their followers by empowering them, incorporating them into decision-making processes, and giving them autonomy (Saira et al., 2021). Staff members encouraged through this approach tend to be more motivated to meet the company's objectives (Ambad et al., 2021). Moreover, transformational leaders create a caring and welcoming workplace where people feel confident and appreciated, enhancing their psychological empowerment (Rafique et al., 2021).
Besides, such leaders convey trust and motivation to their subordinates, resulting in psychological empowerment (Liu & Ren, 2022). Through constructive feedback and positive recognition when employees achieve, transformational leaders foster a positive self-concept and belief in their potential for success (Rafique et al., 2021). Empowering leadership styles, therefore, create a sense of meaning and purpose in workers' jobs, which is the primary source of motivation (Safari et al., 2020). Transformational leaders do this by expressing a clear vision of the organization and aligning individual goals with organizational objectives. Individuals feel more purposeful and motivated to give their best (Rania et al., 2021).
In summary, the empowering leadership styles, primarily transformational, profoundly impact typical retail store employees' psychological empowerment and motivation. Transformational leaders achieve this through inspirational motivation, individualized consideration, and intellectual stimulation; thus, employees feel valued, engaged, and motivated to pursue organizational goals (Ambad et al., 2021). These findings highlight the significance of empowering leadership styles for psychological empowerment and motivation of the store workers. The result is higher productivity and organizational performance.
4.2. Mediating Role 2: Organizational Culture and Psychological Empowerment
Organizational culture is vital to how psychologically empowered employees are, influencing their motivation levels in the retail sector. Organizational culture refers to the amalgamation of common values, the rules of conduct, and the established work principles the organization employs. Positive a The research findings suggest that psychological empowerment may mediate between leadership and employee motivation. These mediation roles can help us comprehend how these empowerment and motivation leadership styles are interconnected in the retail industry.
And encouraging organizational cultures help employees have mental empowerment; hence, they show high levels of motivation (Soleimani et al., 2023).
Research showed that the more employees felt supported by openness, transparency, and employee development, the more they felt encouraged to take the initiative and make decisions (Pasha & Rehman, 2020). This autonomy reinforces and encourages the workforce through organizational practices such as work flexibility and skill development. (Rani et al., 2021). The energized employees are more motivated, so there is a feeling of ownership and autonomy in one's work (Khan et al., 2021). Moreover, organizational culture is related to workers' sense of equity and justice, which are crucial elements of psychological empowerment. Employees feel more empowered and aspire for excellence in a culture that recognizes and encourages their work (Aggarwal et al., 2020). This empowerment is further intensified when organizational leaders display empowering behaviors and create an environment of faith and respect (Schermuly & Meyer, 2020).
Overall, organizational culture at work defines what employees find essential and meaningful, the significant drivers of motivation (Safari et al., 2020). Organizations that offer a strong sense of purpose and align employees with organizational goals are great motivators of the work environment. Workers believe in the organization's mission and values (Nguyen et al., 2023).
4.3. Mediating Role 3: Customer Psychological Empowerment
Customer Psychological Empowerment means that employees feel enabled to make choices and voice their needs, a factor closely related to employee motivation in the retail industry. When empowered, customers are more likely to interact positively and constructively with the staff. This could increase employee motivation (Qiu et al., 2021). Research reveals that staff members are more motivated to provide superior service and keep pace with clients' requirements if the clients are empowered to make their own decisions (Nguyen et al., 2023). This, in turn, would make employees feel as if these customers are more appreciative and understanding and more satisfied and motivated at work (Rania et al., 2021).
In addition, in the positive feedback loop of customer empowerment, customers empower employees through appreciation and recognition (Qiu et al., 2021). They will do that and, as a result, will also increase employees' independence and autonomy, increasing their motivation and job satisfaction (Nguyen et al., 2023). However, the psychological empowerment of a client would also impact the motivation of retail staff. Along with the equality in voice and communication, the staff can enjoy their work, yielding better performance and customer satisfaction.
4.4. Mediating Role 4: High-Performance Work Systems (HPWS) and Psychological Empowerment
Through the psychological empowerment of retail workers, HPWS may support their commitment in the long run. HPWS is a human resource strategic tool designed to enhance employees' skills, create a strong commitment, and motivate them toward better performance. This approach concerns performance management, training and development, and employee engagement (Rani et al., 2021). As empirical data asserts, organizations that embrace HPWS operate in a favorable culture where employees are respected and rewarded (Kariuki et al., 2022). Through HPWS, employees will have the opportunity for skill acquisition, autonomy, and accountability within the work environment, culminating in workers getting psychologically empowered.
In contrast, the high-performance work system (HPWS) creates a culture of high expectations and expectations of accountability, where employees are expected to work better (Appelbaum et al., 2000). Accomplishing targets aligned with the larger organizational objectives enables employees to be proud of their work and work harder (Kariuki et al., 2022).
High-performance workplace systems (HPWS) have an evident effect on employees and their performance. They can discover new skills, take up the lead role, and be suitably rewarded for this, strengthening efficiency and motivation.
Table 3: Results of the Research
Table 4: Final Selected Past Studies
5. Discussions
This study demonstrated the sophisticated interconnections of leadership style, organizational culture, consumer empowerment, HPWS, employee empowerment, and motivation in the retail workforce. Such evidence makes executives try to motivate employees and organizations to see it through success.
5.1. Empowering Leadership Styles
Transformational leadership styles are crucial for retail store personnel's psychological empowerment and motivation. Office shop managers will appreciate empowering leadership styles that are visionary, considerate, and intellectually stimulating. In this way, managers can foster a work environment where colleagues are appreciated, engaged, and motivated to accomplish the organizational objectives (Ambad et al., 2021; Kang & Hwang, 2023). Leadership skills are the main requirements of store managers for tomorrow. This can be done by implementing leadership development sessions and programs designed to hone communication, build a positive work environment, and foster the development of employees. In addition, they should create favorable and empowering surroundings for the workers to be self-dependent and to make decisions by themselves. By leading in such a way that employees are empowered, retail managers can develop an enthusiastic and dedicated workforce, which would result in the organization's success.
5.2. Organizational Culture
An organization's culture is the critical factor that makes or breaks employee psychological empowerment and motivation in the retail industry. Cultivating a culture of openness and transparency and developing the workforce are among the tasks of store managers in the retail sector. Managers can, therefore, through leadership, create a supportive work environment where employees feel empowered to take the initiative and make decisions that develop their motivation and, ultimately, improve organizational performance (Soleimani et al., 2023; Kang, 2021).
In the future, the managers of retail stores need to create and promote a positive and innovative culture within the organization. This can be achieved by developing policies and practices that consider employee opinions, recognize and reward employees' contributions, and create a feeling of belonging and helpfulness. By emphasizing the organizational culture, store managers can develop a working environment where the employees are self-motivated, engaged, and dedicated to achieving the organizational goals.
5.3. Customer Psychological Empowerment
Customer psychological empowerment is a fundamental factor that impacts employee motivation in the retail industry. Retail store managers can significantly contribute toward customer empowerment by giving them choices and creating opportunities to demand what they want. Empowered customers are more likely to interact with employees more positively, thus spurring employee motivation and improving customer satisfaction (Qiu et al., 2021).
Indeed, in the future, store managers should continue giving the customers more power by providing individual services and making the shopping environment customer-friendly and inclusive. Employees empowered by customers are the ones who generate positive outcomes in the form of customer appreciation and recognition. This, in turn, can boost employees' feeling of competence and self-autonomy, hence high motivation levels and job satisfaction (Nguyen et al., 2023; Kang & Hwang, 2017). Retail store managers can also create empowering programs for customers, such as customer feedback programs and loyalty programs, to augment customer empowerment and increase the motivation of employees.
5.4. High-Performance Work Systems (HPWS)
Applying a High-Performance Work System (HPWS) allows employees to be psychologically empowered and motivated in the retail business. HPWS integrates performance management systems, employee training and development, and engaging practices. This creates a positive and empowering environment at the workplace, in which employees are appreciated and motivated to perform better.
The HPWS should be involved in fundraising and store management activities to ensure the employees are always keen on their work. Enough and appropriate development and training of employees are among the critical factors of high self-confidence and job satisfaction. Besides, managers should allow employees to make decisions and trust them with complex tasks and projects. Besides, the line managers can create an environment where the employees are confident enough to meet the organization's goals (Kariuki et al., 2022).
This indicates that HPWS is a powerful tool that store managers can use to motivate and lead their employees, bringing about good organizational outcomes. The employees are provided with a platform on which they are motivated and inspired to attain the peak of their performance.
6. Conclusion
This study has demonstrated that psychological empowerment is the factor that intercalates leadership style with employee workplace motivation in retail stores. The data shows how leadership empowerment, organizational culture, customer psychological empowerment, and HPWS high performance motivate employees through psychological empowerment. The study explores empowered leadership, which is one of the factors that enhances the psychological empowerment and motivation of retail store employees. These leadership styles enable a workplace environment that is friendly and involved as the workers feel acknowledged and encouraged to align with the company objectives. Supervisors in the retail business should apply leadership tactics and create a motivated staff.
Moreover, there is another aspect of organizational culture that influences the motivation of employees through psychological empowerment. A positive and proactive organizational culture includes the employees in the decision-making process, thus improving employee motivation. Retail store managers must build a culture that celebrates employee input and everyone being aware and frank with everything. Another significant determinant of employee motivation in retail is customer psychological empowerment. Situated customers are more prone to assist employees positively, which increases employees' motivation and job satisfaction. Hence, Store managers should empower customers by offering options and creating a user-friendly atmosphere. The study indicates that HPWS increases store workers' psychological empowerment and motivation.
These networks produce a culture of quality and responsibility, urging workers to achieve better effectiveness. Retail store managers can use HPWS tools like performance management and employee development to build employee strength and motivation. The research results indicate that psychological empowerment is essential for employee motivation in the retail sector. Through this knowledge, retail store managers can implement strategies designed to empower employees and create a motivated workforce, bolstering organizational effectiveness.
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