Heliyon 7 (2021) e06992

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Heliyon
journal homepage: www.cell.com/heliyon

Research article

Investigating the effect of authentic leadership and employees'

psychological capital on work engagement: evidence from Indonesia
Risma Niswaty a, *, Hillman Wirawan b, c, Haedar Akib a, M. Said Saggaf d, Dahyar Daraba e
a
The Department of Administrative Sciences, Faculty of Social Sciences, Universitas Negeri Makassar, Makassar, Sulawesi Selatan, Indonesia
b
The Department of Psychology, Faculty of Medicine, Universitas Hasanuddin, Makassar, Sulawesi Selatan, Indonesia
c
School of Psychology, Faculty of Health, Deakin University, Geelong, Victoria, Australia
d
The Department of Public Administration, Universitas Islam Makassar, Makassar, Indonesia
e
The Economic Development and Community Empowerment Study Program, Faculty of Government Politics, Institut Pemerintahan Dalam Negeri (IPDN), Jatinangor,
Indonesia

A R T I C L E I N F O A B S T R A C T

Keywords: This study aims at investigating the positive effect of Authentic Leadership on Work Engagement and the
Authentic leadership mediating role of Psychological Capital (PsyCap). This study employed the Jobs Demands Resource (JD-R) model
PsyCap theory to explain the contribution of Authentic Leadership and PsyCap on Work Engagement. Also, the direct
Work engagement
effect of Authentic Leadership on employees' PsyCap was examined. This study randomly selected participants
Human resources
from 1,120 employees in one of the largest public service offices in Indonesia. 192 employees (male ¼ 120 or
62.5%) fully participated in a three-wave data collection. By using a Structural Equation Modeling (SEM) tech-
nique, this study confirmed that the proposed theoretical model (χ2/df ¼ 2, p < .05, RMSEA ¼ .07, SRMR ¼ .07,
CFI ¼ .95) showed a better fit than the alternative model (χ 2/df ¼ 3, p < .05, RMSEA ¼ .09, SRMR ¼ .09, CFI ¼
.85). The results also confirmed that Authentic Leadership and PsyCap directly predicted Work Engagement.
Furthermore, the indirect effect of Authentic Leadership on Work Engagement was positively mediated by em-
ployees' PsyCap. Authentic Leadership in Indonesian public organizations may provide a tremendous impact on
employees' PsyCap and Work Engagement. This study has provided new insight into the application of the JD-R
model in Indonesian public organizations. Discussion, implications, limitations, and future research directions are
included.

1. Introduction The concept emerged from the positive organizational behavior and
eventually became one of the most influential psychological states in
Organizations must manage their workforce and pay serious attention organizations (Bakker and Demerouti, 2008). Employees with high Work
to their behaviors, attitudes, and psychological states. Organizations are Engagement potentially perform at their optimum level as they experi-
expected to hire only competent candidates with positive work attitudes. ence a meaningful connection with their tasks. Engaged employees are
It is expected that organizations consistently develop productive work characterized by Vigor, Dedication, and Absorption in their daily
behaviors and eliminate any counter-productive behaviors (Brown, work-life (Bakker, 2011; Bakker et al., 2008). They may interpret chal-
2004; Sanyal and Sett, 2011; Soni, 2004; Ulrich et al., 1995). Some lenging work conditions as an engaging situation and a chance to utilize
previous findings found essential variables such as commitment (Meyer their resources. Hence, throughout the development of work engage-
et al., 2002), satisfaction (Leider et al., 2016), engagement (Bakker et al., ment, the organizations benefit from their employees' full effort and
2008), Psychological Capital (Luthans et al., 2015), and Leadership subsequently impact business performance (Bakker, 2011).
(Avolio et al., 2009). These variables are positive for employee's mental Some studies have also found evidence of the positive effect of Work
states as well as bringing productive performance to the organizations. Engagement on employee's performance. For instances, researchers
As mentioned earlier, Work Engagement has been found as one of the found a consistent positive effect of Work Engagement on employee's
most desirable employee outcomes in organizations (Bakker et al., 2008). performance (Bakker and Bal, 2010; Bakker et al., 2008; Breevaart et al.,

* Corresponding author.
E-mail address: [email protected] (R. Niswaty).

https://doi.org/10.1016/j.heliyon.2021.e06992
Received 8 October 2020; Received in revised form 5 January 2021; Accepted 28 April 2021
2405-8440/© 2021 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-
nc-nd/4.0/).
R. Niswaty et al. Heliyon 7 (2021) e06992

2014). Recent studies also documented the positive effect of Work Authentic Leadership in the business sector (Wirawan et al., 2020). In
Engagement on organizational commitment (Simons and Buitendach, contrast, evidence supported that leadership in public sector still signif-
2013) and job crafting (Bakker, 2017). The findings suggested that Work icantly influenced Work Engagement (Alarcon et al., 2010).
Engagement had a tremendous impact on many vital outcomes in orga- Since a recent study in Indonesia has confirmed that Authentic
nizations. It is crucial to encourage HR practitioners and scientists to Leadership was less influential than PsyCap in predicting Work Engage-
investigate Work Engagement antecedents as it brings many benefits to ment (Wirawan et al., 2020), and Authentic Leadership could influence
both employees and organizations. Understanding the antecedents would Work Engagement via PsyCap (Daraba et al., 2021), this current study
favor HR practitioners to design a systematic approach to foster will focus on testing the theory in an Indonesian public service organi-
Employee Work Engagement. zation. Hypothetically, both Authentic Leadership and PsyCap poten-
It is well established from several studies that Work Engagement can tially improve employee's Work Engagement regardless of the
be predicted by the employee's psychological resources (Bradbury-Jones, organization types. Testing the effect of Authentic Leadership and Psy-
2015; Joo et al., 2016; Kang and Busser, 2018). Psychological Capital Cap in Indonesia's public organization will grant new insight into how
(PsyCap) is a form of employee's psychological resources (Luthans et al., employees exert different resources in different organizations.
2015). To illustrate, PsyCap predicted engagement among front-line staff
in the hospitality business (Paek et al., 2015), employees in various large 2. Literature review and hypotheses
for-profit companies (Chaurasia and Shukla, 2014; Joo et al., 2016;
Wirawan et al., 2020), and public services (Saleh et al., 2020). Never- Drawing from the Jobs Demands Resource (JD-R) model developed
theless, Kang & Busser (2018) and Parrott et al. (2019) postulated that by Bakker and Demerouti (2008), Thompson et al. (2015), and Bakker
PsyCap and leadership should be employed to predict Work Engagement (2011), this study tested the two resources of employee's Work Engage-
in different job types (e.g., technician vs. hospitality) and levels (e.g., ment. Firstly, the job resources contain all fundamental aspects of a job,
staff vs. manager). including the physical environment, social supports, psychological as-
Evidence has also supported that Authentic Leadership positively pects, and the organization. All these factors play an essential role in
impacted employee's engagement (Alok and Israel, 2012; Bamford et al., reducing workload, assisting task achievement, and facilitating the
2013; Joo et al., 2016; Wang and Hsieh, 2013). Considering these pre- workplace (Schaufeli and Bakker, 2004). Secondly, personal resources
vious findings, it is plausible that both Authentic Leadership and PsyCap also contribute to an essential role in determining one's Work Engage-
contribute a significant positive impact on Work Engagement. However, ment. Personal resources are positive self-evaluations that help in-
evidence from an Indonesia for-profit organization suggested contrasting dividuals strive in challenging situations (Bakker and Demerouti, 2008).
findings because when Authentic Leadership was combined with PsyCap, According to the JD-R model (Bakker, 2011), job resources and personal
the effect of Authentic Leadership on Work Engagement was not signif- resources are essential for employees.
icant (Wirawan et al., 2020). On the contrary, another study found that Leadership determines the magnitude of job resources, and it be-
only PsyCap positively correlated with employee's Work Engagement, comes one of the vital resources for employee's work-engagement (Bak-
while a positive leadership style had a non-significant effect (Pugar and ker and Demerouti, 2008). In this case, leaders may act as a primary
Parahyanti, 2018). Some studies also found that when combined with employee's resource to maintain their engagement or strive in everyday
other engaging leadership and organizational culture, the positive lead- work-life. It has been well established that leadership determines
ership style (i.e., Transformational Leadership) still contributed a posi- employee work engagement (Saks and Gruman, 2009). For instance, a
tive impact on Work Engagement (Arifin et al., 2014; Rahmadani and Transformational and Authentic Leadership style predicted employee
Schaufeli, 2020). Without considering the role of job resources such as engagement and performance (McColl-Kennedy and Anderson, 2002;
organizational support and positive leadership styles, PsyCap showed a Prochazka et al., 2017; Tonkin, 2013). Moreover, providing employees
positive impacted on Work Engagement (Percunda and Putri, 2020). with a transformational style and contingent reward potentially increases
Although Work Engagement tends to be consistent across different engagement (Breevaart et al., 2014; Tims et al., 2011). However, some
cultures and contexts (Klassen et al., 2012), the contribution of Authentic leader's behaviors, such as the management-by-exception style, bring a
Leadership and PsyCap as the antecedents of Work Engagement might non-significant effect on employee engagement (Breevaart et al., 2014).
not always be consistent. In Indonesia, positive leader behaviors could Authentic Leadership is a form of a leader's positive and supportive
have improved Work Engagement (Arifin et al., 2014; Rahmadani and behaviors. Authentic Leadership can be defined as a leader's authentic
Schaufeli, 2020; Wirawan et al., 2020). However, employees might also behaviors characterized by leaders' positive psychological capacity and
need different resources to deal with day-to-day work demands (Bakker ethical values to foster employees' self-development (Walumbwa et al.,
et al., 2008). Thus, fostering PsyCap as an alternative resource may 2010). Moreover, Walumbwa et al. (2008) stated that authentic leaders
further improve employee's engagement at work. Thus, to advance tend to display four core behaviors: self-awareness, relational trans-
knowledge in this area, the incremental value of PsyCap when predicting parency, balanced processing, and internalized moral perspective. Avolio
Work Engagement should be examined in line with Authentic and Gardner (2005) also argued that authentic leaders showed their true
Leadership. self and acted authentically. Authentic leaders are aware of their
Study about the effect of Authentic Leadership and PsyCap on Work strengths and weaknesses and focus on followers' self-development
Engagement in Indonesia organizations is still developing. There was a (Walumbwa et al., 2010).
possibility that public and private sector Work Engagement were Authentic Leadership emerges as one of the most influential leader-
different in terms of levels and antecedents (Vigoda-Gadot et al., 2013). ship styles, and it also shares many characteristics similar to Trans-
Little is known whether or not the type of organization could change how formational Leadership (Banks et al., 2016; Tonkin, 2013). Authentic
employees perceive support from their leaders and how they exert their leaders initiate the follower's positive changes by showing a positive role
resources (e.g., self-efficacy). The effect of Authentic Leadership on model (Avolio et al., 2009; Gardner et al., 2011). Authentic leaders
PsyCap has been documented by some researchers (Amunkete and display honesty and show followers their true selves. These leaders
Rothmann, 2015; Daraba et al., 2021). It is also possible that Authentic inspire others to engage in the workplace and to optimize their perfor-
Leadership influences Work Engagement by fostering employee's psy- mance. By exhibiting these authentic characteristics, leader can develop
chological resources. In Indonesia, organizations were still largely employee commitment (Rego et al., 2016), Work Engagement
influenced by high power distance and collectivism in which leadership (Walumbwa et al., 2010), and performance (Peterson et al., 2012).
significantly determined employee outcomes (Heuer et al., 1999; Ira- Leaders' authentic behaviors can reduce the imbalance between demand
wanto, 2009). In Indonesian private sectors, power distance appeared to and resources by providing transparent communication, the inspiration
be lower over time (Heuer et al., 1999) which could reduce the role of for self-development, and balanced processing (Walumbwa et al., 2010).

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R. Niswaty et al. Heliyon 7 (2021) e06992

Authentic Leadership provides employees resources to subsequently

engage in the organization (Alok and Israel, 2012; Walumbwa et al., PsyCap
2010; Wang and Hsieh, 2013). Therefore, Authentic Leadership may
predict employees Work Engagement. Thus, the first hypothesis will be:
Hypothesis 1. Authentic Leadership will positively predict Work
Engagement Authentic Work-
Leadership Engagement
On the other hand, Luthans et al. (2015) identified four positive
psychological states that positively affected employees' mental states,
Figure 1. Theoretical model.
attitudes, and performance. These four constructs (i.e., Hope, Optimism,
Self-Efficacy, and Resiliency) were combined and called Psychological
Capital (PsyCap). PsyCap is defined as positive individual developmental 3. Method
states characterized by high self-efficacy, optimism, hope, and resilience
(Luthans et al., 2015; Newman et al., 2014; Youssef-Morgan and Luthans, 3.1. Participants and procedure
2015).
According to the JD-R model, personal resources were also found to Participants were recruited during an Annual Employee Engagement
be the essential antecedent of employee's Work Engagement (Bakker, survey in a public service office in Makassar, Indonesia. This organization
2011; Bakker and Demerouti, 2008). PsyCap has been introduced as an was selected because it was the largest public service office in eastern
employee's resource (Thompson et al., 2015). PsyCap may act as positive Indonesia. In order to eliminate common method bias, the data were
characteristics to overcome strains and favor individual achievement in collected in three waves. Participants were randomly selected from 1,120
organizations (Luthans et al., 2015). Following the JD-R model, all pos- personnel with a sample size of 293 (Cochran, 1977). All participants
itive mental states in PsyCap can be exerted by an individual when could drop the study at any point without telling their reasons. De-
dealing with exhausted job demands. Employees will be more likely to mographic variables (e.g., gender and age) and Authentic Leadership
engage in their work if they have enough personal resources to cope with were administered in the first wave, PsyCap in the second wave, and
demanding work. In line with a number of studies, PsyCap is one of the Work Engagement in the last wave. In the first wave, there were 220 out
most sought after resources for employee's Work Engagement (De Waal of 293 participants completed the survey. However, in the next two
and Pienaar, 2013; Simons and Buitendach, 2013; Thompson et al., weeks, only 211 participants returned the survey. In the final wave of the
2015). The next hypothesis will be: data collection (two weeks after the second wave), 192 participants
completed the survey. Using the G*power Calculation, this sample size
Hypothesis 2. PsyCap will positively predict Work Engagement had enough power to eliminate type II error (Erdfelder et al., 2009; Faul
Having less resources than needed would give employees less et al., 2007). Participants who failed to return the survey in the previous
control over the demanding work in which later reduces their wave were excluded from the next data collection.
engagement (Karasek, 1979). Also, the imbalance between effort and There were 192 employees who fully participated in the three-wave
reward can lead to work strain (Siegrist, 1996) and consequently data collection or 65.5% of the targeted sample size. The survey was
reduce well-being (de Jonge et al., 2000). Together, Authentic Lead- administered with a paper-and-pencil method, and the participants were
ership and PsyCap can act as resources for employees. Authentic given the whole workday (from 08.00 am to 04.00 pm) to complete the
Leadership is a means of providing supervisory supports in this regard survey. All participants were identified using a unique participant's code,
may act as the job resource. Similarly, PsyCap with four positive and no other personal information could be used to identify each
psychological states (e.g., hope, resiliency, efficacy, and optimism) act participant. This study complied all regulations and research ethic stan-
as personal resources. Some previous studies have shown that dard in Indonesia, and informed consent was obtained from each
Authentic Leadership and Psychological Capital positively influenced participant. The study protocol has been approved by the Research Ethic
employee's attitudes, psychological states, and performance (Adil and Committee at Universitas Negeri Makassar (Project ID: 2368.UN36.11/
Kamal, 2016; Clapp-Smith et al., 2009; Rego et al., 2012). In brief, LP2M/2020).
both Authentic Leadership and PsyCap contribute a positive impact on
Work Engagement. 3.2. Measures
As suggested by the JD-R model, engagement occurs when employees
perceive enough resources to deal with job demand (Bakker and 3.2.1. Authentic Leadership
Demerouti, 2008). Although Authentic Leadership and PsyCap are two The 16-item Authentic Leadership Questionnaire (ALQ) from Avolio
distinct resources that help employees cope with job demand, some lines et al. (2004) was used to measure employees' perception of his/her im-
of evidence have supported that Authentic Leadership directly impacted mediate supervisor's Authentic Leadership behaviors. The ALQ was
employee's PsyCap (Adil and Kamal, 2016; Rego et al., 2012, 2016; Wang constructed using four dimensions; self-awareness (e.g., My leader seeks
et al., 2014; Woolley et al., 2011; Zubair and Kamal, 2015). Leaders with feedback to improve interactions with others), balanced processing (e.g.,
authentic characteristics could provide supervisory supports for em- My leader solicits views that challenge his or her deeply held positions),
ployee's self-development. Authentic Leaders are able to focus on fol- internalized moral perspective (e.g., My leader demonstrates beliefs that
lowers' self-development (Walumbwa et al., 2010). The next hypothesis are consistent with actions) and relational transparency (e.g., My leader
is as follows: says exactly what he or she means). Since the scale was originally
developed in English, a scale adaptation process was conducted from
Hypothesis 3. Authentic Leadership will positively predict PsyCap
English to Bahasa Indonesia. The ALQ used a five-point Liker scale with
As the authentic leaders foster employee's self-development, they also response options ranged from 1 (strongly disagree) to 5 (strongly agree).
develop employee's PsyCap. Employees with enough psychological re- Considering discussions and debates about model fit indices (Hu and
sources will have enough resources to deal with demanding tasks at Bentler, 1999; Marsh and Balla, 1994; Schreiber, 2006; Weston and Gore,
work. Therefore, Authentic Leadership will improve Work-Engagement 2006), an acceptable model fit shows a combination of χ2/df < 3, p > .05,
by developing employee's PsyCap. This leads to the last hypothesis: SRMR and RMSEA< .09, GFI and CFI close to .95 and Average Variance
Extracted (AVE) higher than .50 for each dimension. Confirmatory Factor
Hypothesis 4. PsyCap will mediate the effect of Authentic Leadership
Analysis (CFA) confirmed the model was good fit (χ2/df ¼ 2.4, RMSEA ¼
on Work Engagement (see Figure 1)
.06, CFI ¼ .95) with AVE was .58, .62, .52 and .61 for self-awareness,

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R. Niswaty et al. Heliyon 7 (2021) e06992

balanced processing, internalized moral perspective, and relational As seen in Table 1, most of the participants were male (62.5%) and
transparency respectively. The Composite Reliability (CR) was also 37.5% female. Next, the data were collected mostly from junior staff and
acceptable with all coefficients higher than .75 for each dimension. The only 16 senior staff. In terms of education, 50% had a high school
inter-item correlation with Alpha Cronbach yielded .86 for the full diploma because most of the employees were recruited after completing
measure. The results suggested that the measure had a valid construct high school and then enrolled in training and education for four years.
and reliable for research purposes. There were some (10.9%) who continued their education and held
postgraduate degrees.
3.2.2. Psychological Capital Table 2 illustrates the participants' age and tenure. Most participants
Psychological Capital Questionnaire (short version) or PCQ (Luthans were in their late 20s and had worked for nearly six years. A small
et al., 2015) was used to measure Participants' level of PsyCap in four number of participants had worked for more than two decades with age
different dimensions (i.e., Hope, Optimism, Resilience, and Efficacy). The older than 50. These results indicated that the participants represented
scale has 12 items with three items for each dimension. In the previous various age and tenure groups.
validation studies, the PCQ satisfied validity and reliability standard for
research purposes (Antunes et al., 2017; G€orgens-Ekermans and Herbert, 4.1.2. Descriptive statistics and correlations
2013). The scale response options ranged from 1 (strongly disagree) to 5 In the first step of the analysis, descriptive statistics and bivariate
(strongly agree). The initial Bahasa Indonesia version of the PCQ was correlations were performed. The following Table 3 shows mean scores,
retrieved from the scale publisher (Mind Garden). Using the same cutoff standard deviations, and correlations between variables. As seen in
criteria, this study found that the Confirmatory Factor Analysis (CFA) Table 3, all variables in this study were positively and significantly (p <
confirmed the model was close fit (χ2/df ¼ 2.6, RMSEA ¼ .07, CFI ¼ .90) .05 to p < .01) correlated with Authentic Leadership.
with AVE of .59, .67, 65, and .60 for Hope, Optimism, Resilience, and Authentic Leadership was positively associated with PsyCap (r ¼ .37,
Efficacy, respectively. All CRs were also acceptable (i.e., higher than .70) p < .01) and with Work Engagement (r ¼ .39, p < .01). Similarly, PsyCap
for each dimension. The alpha coefficient was .81 for the full-scale was positively associated with Work Engagement (r ¼ .39, p < .01).
inter-item correlations. The findings indicated that the Indonesia Authentic Leadership and Work Engagement were positively associated
version of PCQ had an acceptable construct validity and was deemed with all PsyCap dimensions, except self-efficacy, while Authentic Lead-
reliable for research purposes. ership was positively associated with all Work Engagement dimensions.
In addition, this study did not observe any significant correlations be-
3.2.3. Work engagement tween participants demographic variables with Authentic Leadership,
Work Engagement Scale (Schaufeli and Bakker, 2004) was used to PsyCap, and Work Engagement.
measure employees' Work Engagement. Like the other two measures, the
scale went through a translate-back-translate procedure from English to 4.1.3. Hypothesis testing using Structural Equation Modeling (SEM)
Bahasa Indonesia. Based on the above cutoff criteria, the CFA results To test the hypotheses, a Structural Equation Modeling (SEM) was
showed a good-fit model (χ2/df ¼ 2.8, RMSEA ¼ .07, CFI ¼ .95) with an employed using an IBM SPSS and AMOS statistical package (Byrne, 2001;
acceptable Alpha Cronbach (.82) for the full-scale inter-item correlations. Weston and Gore, 2006). This study proposed a model in which
Each dimension's discriminant validity was also acceptable with AVE .65, Authentic Leadership directly predicted Work Engagement and indirectly
.63, and .61 for Vigor, Dedication, and Absorption, respectively. The CR via the role of employees' PsyCap.
was also acceptable with a coefficient higher than .72 for each dimen- The proposed theoretical model was compared with another
sion. The validation study supported that the data confirmed a alternative model. The proposed model consisted of Authentic Lead-
three-factor structure with Vigor (six items), Dedication (five items), and ership and PsyCap as predictors of Work Engagement where PsyCap
Absorption (six items). The items included “Time flies when I am mediated the relationship between Authentic Leadership and Work
working” and “I am enthusiastic about my job.” Similarly, this scale also Engagement. The alternative model was employed to test if Authentic
used a five-point Likert scale with response options from 1 (strongly Leadership and PsyCap could improve the model if they were in the
disagree) to 5 (strongly agree). Given the results, the Work Engagement same factor. The model has a good fit if it has a combination of χ2/df
Scale was valid and reliable for research purposes. < 3, p > .05, RMSEA< .09 and SRMR< .09, and GFI and CFI close to
.95 (Byrne, 2001; Hu and Bentler, 1999; Marsh and Balla, 1994;
4. Results and discussion Weston and Gore, 2006). Based on those criteria, the proposed theo-
retical model yielded a better fit (χ2/df ¼ 2, p < .05, RMSEA ¼ .07,
4.1. Results SRMR ¼ .07, CFI ¼ .95) than the alternative model (χ2/df ¼ 3,
p < .05, RMSEA ¼ .09, SRMR ¼ .09, CFI ¼ .85). The results confirmed
4.1.1. Participants' profile that Authentic Leadership directly contributed to Work Engagement or
The following Table 1 described participants' gender, job levels, and indirectly via PsyCap. Please refer to the following Figure 2 for this
education: study's empirical model.

Table 1. Participants' gender, job levels, and education.

Variable Category Frequency Percentage

Gender Male 120 62.5
Female 72 37.5
Level Staff 176 91.7
Management 16 8.3
Education Postgraduate 21 10.9
Bachelor 70 36.5
Diploma 5 2.6
High School 96 50.0

Note: N ¼ 192.

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R. Niswaty et al. Heliyon 7 (2021) e06992

Table 2. Participants' age and tenure in year. PsyCap

R2=.16
Minimum Maximum Mean Std. Deviation
Age 21 60 29.38 8.94
Tenure 1 25 5.69 5.31 Authentic Leadership Work-Engagement
R2=.25
Note: N ¼ 192.

Figure 2. Empirical model.

Table 4 showed path coefficients of direct and indirect effects of
Authentic Leadership on Work Engagement. All path coefficients were regulation (Walumbwa et al., 2010). This characteristic ensures em-
found to be positive and significant indicating that all proposed hy- ployees that they are working under a reliable boss. This study
potheses in this study were supported. Therefore, Authentic Leadership strengthened some previous findings where Authentic Leadership's role
positively predicted Work Engagement (Hypothesis 1) and PsyCap (Hy- was essential in predicting employees' Work Engagement (Alok and
pothesis 3), PsyCap positively predicted Work Engagement (Hypothesis Israel, 2012; Walumbwa et al., 2010; Wang and Hsieh, 2013).
2), and PsyCap mediated the relationship between Authentic Leadership On the other hand, this study found that Authentic Leadership also
and Work Engagement (Hypothesis 4). The following Table 4 listed the predicted employees' PsyCap. This particular finding was in line with
path coefficients for each effect: some previous studies where Authentic Leadership contributed to em-
ployees' PsyCap (Adil and Kamal, 2016; Rego et al., 2012, 2016; Wang
4.2. Discussion et al., 2014; Woolley et al., 2011; Zubair and Kamal, 2015). Authentic
Leaders provide supervisory support for employees' self-development,
This study examined the effect of Authentic Leadership and PsyCap and they focus on employees' self-development (Walumbwa et al.,
on employees' Work Engagement in the public sector. The indirect effect 2010). Authentic Leadership potentially creates a tremendous impact on
of Authentic Leadership on Work Engagement was also investigated by employees' mental health, attitudes, and behaviors in the Indonesian
examining the mediating role of PsyCap. In general, this study confirmed public sectors. Leaders' positive characteristics may direct employees'
the proposed theoretical model where Authentic Leadership directly self-development, improve their PsyCap, and restore potential resource
predicted Work Engagement or indirectly via PsyCap. The application of loss, which is relevant to maintaining Work Engagement in Indonesian
the JD-R model was confirmed as both type of resources (i.e., Authentic public organizations.
Leadership and PsyCap) positively influenced employees' Work Engage- Furthermore, this study also confirmed that Authentic Leadership
ment. The JD-R model (Bakker, 2011; Bakker and Demerouti, 2008) and and PsyCap predicted Work Engagement. Like some recent studies in
the effort-reward balance principle (Siegrist, 1996) emphasized that Indonesia (Daraba et al., 2021; Wirawan et al., 2020), Authentic
reward-effort interaction should be balanced to give employees more Leadership and PsyCap were significant predictors for employees' atti-
control over demanding work. Job and personal resources together tudes and performance. However, some jobs (e.g., military, nurses)
provide employees with confidence control over exhausting job demand require a particular type of resource (e.g., positive supervisory behav-
(Bakker and Demerouti, 2007; Karasek, 1979; Xanthopoulou et al., iors) over the others. For example, employees in the public sector might
2009). experience greater supervisory support than their positive psychologi-
Firstly, this study confirmed that Authentic Leadership positively cal states.
predicted Work Engagement. Authentic leader characteristics allow a Although leadership and psychological states had some positive ef-
leader to better interact with their subordinates by exhibiting their fects on Work Engagement, in this study Authentic Leadership out-
authentic behaviors. For example, leaders may reveal that they have performed the effect of PsyCap. In contrast, Wirawan et al. (2020) found
specific weaknesses, and they need support from others to achieve the that in some business organizations, the effect of PsyCap was stronger
organization goals. Perceiving a leader's trustworthiness potentially en- than Authentic Leadership, and the effects were mediated by employees'
courages employees to engage at work as they receive support in job satisfaction, while in this current study Authentic Leadership and
completing tasks. Authentic Leadership is also characterized by high self- PsyCap directly predicted employees' Work Engagement and PsyCap

Table 3. Descriptive statistics and correlations.

No. Variable M SD 1 2 3 4 5 6 7 8 9 10 11 12 13
1 AL-Total 59.13 8.86 -
2 AL-SA 13.87 2.55 .83** -
3 AL-IMP 15.01 2.24 .85** .62** -
4 AL-BP 15.39 2.13 .82** .49** .65* -
5 AL-RT 15.52 2.34 .82** .53** .57** .63** -
6 PsyCap-Total 48.62 7.66 .37** .25** .26** .30** .36** -
7 PsyCap-Efficacy 12.95 2.34 .11 .02 .10 .12 .17* .74** -
8 PsyCap-Hope 15.92 2.31 .28** .27** .20** .23** .24** .79** .36** -
9 PsyCap-Resilience 12.06 1.85 .33** .21** .27** .27** .31** .72** .29** .48** -
10 PsyCap-Optimism 8.51 1.54 .32** .24** .21** .32** .35** .76** .49** .47** .47** -
11 WE-Total 62.77 11.66 .39** .41** .20* .21** .24** .39** .12 .22* .35** .16* -
12 WE-Vigor 22.73 3.37 .36** .45** .22** .26** .26** .18* .05 .20** .25** .09 .87** -
13 WE-Dedication 19.82 2.93 .33** .31** .22** .21** .31** .25** .18* .14 .28** .18* .82** .71** -
14 WE-Absorption 21.78 4.25 .16* .26** .10 .08 .06 -.10 -.17* -.03 .04 -.12 .83** .52** .44**

Note: N ¼ 192, *p < 0.05, **p < 0.01, M ¼ Mean, SD ¼ Standard Deviation.
AL ¼ Authentic Leadership, SE ¼ Self Authentic, IMP ¼ Internalized Moral Perspective, BP ¼ Balanced Processing, RT ¼ Relational Transparency.
PsyCap ¼ Psychological Capital, WE ¼ Work Engagement.

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R. Niswaty et al. Heliyon 7 (2021) e06992

Table 4. Path coefficients of direct and indirect effects.

Effect Path Estimate

Direct Authentic Leadership → Work Engagement .32**
PsyCap → Work Engagement .29**
Authentic Leadership → PsyCap .40**
Indirect Authentic Leadership → PsyCap → Work Engagement .12**

N ¼ 192, **p < 0.01.

could also mediate the effect of Authentic Leadership on Work Engage- 4.3. Implications
ment. Authentic Leadership had a stronger effect on Work Engagement
than PsyCap, and it also directly influenced employees' PsyCap. Em- In terms of theoretical contribution, this study shed light on the
ployees could view their leaders' positive attitudes as a great source of importance of Authentic Leadership on employees' psychological states
support more than their personal resources. Authentic Leadership stim- and engagement in public organizations. In addition, this study also
ulated subordinates' confidence and made them believe that they were supported that PsyCap also contributed significant variances to em-
supported. ployees' Work Engagement. However, it is believed that Authentic
Unlike other previous findings in business contexts (Wirawan et al., Leadership plays more vital roles than employees' personal resources in
2020) and public sectors (Daraba et al., 2021; Saleh et al., 2020; Tamar Indonesia's public organizations. Authentic Leadership can directly in-
et al., 2020), this study focused on the direct effect of both leaders' fluence Work Engagement while fostering employees' PsyCap, which
positive characteristics and employees' psychological states on Work eventually also increases Work Engagement.
Engagement in public organisations. The results confirmed the dominant From a practical point of view, human resources practitioners should
effect of leadership over employees' positive psychological states. In further understand how to develop employee engagement by considering
different contexts, such as in business, education, or hospitality, the effect various resources. Work Engagement emerges as the results of exerting
of leaders' positive behaviours and positive psychological states could resources to cope with high job demands. In this sense, the lack of re-
also change and it might depend on how subordinates value different sources will adversely impact employee engagement. Public organiza-
resources. Also, in a time of crisis employees potentially expect more tions in Indonesia are still influenced by high power distance, and
support from leaders than from their personal resources (Dirani et al., consequently, the dominant roles of authority figures are largely toler-
2020). ated. Followers rely on authority and the leader's decision. Employees are
The significant positive impact of Authentic Leadership on PsyCap prone to perceive leaders as their preferable resource because their roles
and Work Engagement is shaped by how subordinates perceive their determine employees' psychological states, engagement and perfor-
leaders (Bies et al., 2016). The magnitude of resources might be mance. Thus, Authentic Leadership in public sectors has a double impact
determined by how subordinates perceive support from supervisor, on employees' outcomes. First, it helps foster employees' positive psy-
organization, and their own psychological states. Cultural dimensions chological states, and second, it ensures employees to have enough re-
(e.g., power distance) can accentuate some resources over others and sources to face challenging work demand.
finally influences many aspects of employees' work-life. This notion Human Resources practitioners should take the above discussion into
appeared to be the case in Indonesia's public organizations. Some account to design engagement programs in public organizations. They
public organizations were dominated by high power distance and must start at identifying values and approaches in managing human re-
collectivism in which leadership significantly determines employee sources. The most influential resources should be understood to nurture
outcomes (Heuer et al., 1999; Irawanto, 2009). While the role of its effect on engagement effectively. Besides, some organizations may
power distance showed a downward trend in Indonesia's private benefit from exerting their employees' psychological resources, while
sectors (Heuer et al., 1999) and consequently weakened the others depend on job resources (e.g., leadership role). For example, or-
Authentic Leadership's effect in business sectors (Wirawan et al., ganizations with a semi-military approach (e.g., department of law and
2020), the role of Authentic Leadership could be more potent in human rights, department of immigration) influence their employees'
Indonesia's public sectors. engagement throughout leadership roles. Practitioners can focus on
Supportive leaders' behaviors, such as Authentic Leadership, are developing Authentic Leadership in these public organizations in order to
essential for helping employees coping with excessive stress and improve Work Engagement effectively. Hence, PsyCap should also be
improving their well-being, performance, and turnover (Harms et al., viewed as an integral part of designing employees' engagement programs
2014). Although many tasks exposed employees, they would have in public organizations. Although PsyCap was primarily influenced by
enough resources to deal with job demands, which later increased their Authentic Leadership, it directly determines employees' Work
engagement. A reliable and credible leader provides employees with Engagement.
psychological (e.g., efficacy) and job resources (e.g., leadership support)
that help employees strive in their daily work routine. 4.4. Limitations and future research directions
Beyond the leadership role, many studies have suggested that PsyCap
provided personal resources for employees and improved employees' Firstly, the data were collected from a main public service office in the
engagement (Chen, 2015; Paek et al., 2015; Simons and Buitendach, eastern part of Indonesia. Although the data seemed sufficient to
2013; Thompson et al., 2015). PsyCap serves as employees' psychological generate conclusions regarding the effect of leadership and psychological
resources. Regardless of the type of organization, PsyCap consistently resources, generalization should be made with caution. The sample could
provides support for employees across different organizational contexts. be insufficient to generalize the results across different countries or
As previously mentioned, Authentic Leadership might influence the cultures. Therefore, future studies should include a bigger sample size
emergence of positive psychological states and consequently contributes across different organizational types. Secondly, it is beyond this study's
to many desirable employees' outcomes, including Work Engagement. scope to investigate the role of moderating variables in the relationships.
Therefore, although the effect was slightly lower than Authentic Lead- This study focused on the effect of Authentic Leadership on Work
ership, PsyCap should still be considered a significant predictor for em- Engagement via the role of PsyCap. Future studies should consider some
ployees' Work Engagement. moderating variables to fully understand the effect of job and personal

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Cochran, W.G., 1977. Sampling Techniques, third ed. John Wiley & Sons, Inc.
Daraba, D., Wirawan, H., Salam, R., Faisal, M., 2021. Working from home during the
This research did not receive any specific grant from funding agencies corona pandemic : investigating the role of authentic leadership , psychological
in the public, commercial, or not-for-profit sectors. capital , and gender on employee performance Working from home during the corona
pandemic : investigating the role of authentic leadership , psyc. Cogent Bus. Manag. 8
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Data availability statement de Jonge, J., Bosma, H., Peter, R., Siegrist, J., 2000. Job strain, effort-reward imbalance
and employee well-being: a large-scale cross-sectional study. Soc. Sci. Med. 50 (9),
1317–1327.
The authors do not have permission to share data. De Waal, J.J., Pienaar, J., 2013. Towards understanding causality between work
engagement and psychological capital. SA J. Ind. Psychol. 39 (2).
Dirani, K.M., Abadi, M., Alizadeh, A., Barhate, B., Garza, R.C., Gunasekara, N.,
Declaration of interests statement Ibrahim, G., Majzun, Z., 2020. Leadership competencies and the essential role of
human resource development in times of crisis: a response to Covid-19 pandemic.
The authors declare no conflict of interest. Hum. Resour. Dev. Int. 23 (4), 1–15.
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G*Power 3.1: tests for correlation and regression analyses. Behav. Res. Methods 41
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Faul, F., Erdfelder, E., Lang, A.G., Buchner, A., 2007. G*Power 3: a flexible statistical
power analysis program for the social, behavioral, and biomedical sciences. Behav.
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Gardner, W.L., Cogliser, C.C., Davis, K.M., Dickens, M.P., 2011. Authentic leadership: a
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