Psychological empowerment and its relationship to trust in immediate managers

Journal of Business Research 60 (2007) 41 – 49

Psychological empowerment and its relationship to trust in immediate managers Azize Ergeneli a,⁎, Güler Sagˇlam Arı b,1 , Selin Metin a,2 a

Hacettepe University, Faculty of Economics and Administrative Science, Department of Business Administration, 06532 Ankara, Turkey b Gazi University, Faculty of Commerce & Tourism Education, Department of Business Administration, Golbasi/Ankara, Turkey Received 1 March 2006; received in revised form 1 June 2006; accepted 1 September 2006

Abstract This paper examines the relationships between overall psychological empowerment, as well as its four aspects (meaning, impact, selfdetermination, and competence) as Spreitzer identifies, and bank managers' cognition and affect-based trust in their immediate managers. Certain demographic factors are taken into consideration as control variables to determine their effect on the relationship between psychological empowerment and trust. 220 bank managers in Ankara, Turkey participated in this study. The results show a significant relationship between cognition-based trust in immediate managers and overall psychological empowerment. Although cognition-based trust relates to meaning and competence aspects, affect-based trust is related to impact only. This study shows no relationship between any type of trust in immediate manager and self-determination. With demographic as control variables, only position has an impact on psychological empowerment. © 2006 Elsevier Inc. All rights reserved. Keywords: Psychological empowerment; Trust; Managers; Subordinates; Bank

1. Introduction A review of the literature shows that empowerment receives wide recognition as an important subject in management practices for several reasons. First, personnel empowerment is one of the fundamental elements of managerial and organizational effectiveness and that effectiveness increases when power and control are shared (Keller and Dansereau, 1995). Another reason is that some literature reports empowerment to be a facilitating factor in responding to environmental changes at the right time, such as meeting customer demands on time and increasing their satisfaction. Bowen and Lawler (1992: 33–34) stress that empowered employees become a great source of

⁎ Corresponding author. Ergeneli is to be contacted at Tel.: +90 312 297 8712; fax: +90 312 426 2241. E-mail addresses: [email protected] (A. Ergeneli), [email protected] (G.S. Arı), [email protected] (S. Metin). 1 Tel.: +90 312 485 1460. 2 Tel.: +90 312 297 87 01/117. 0148-2963/$ - see front matter © 2006 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2006.09.012

service ideas. Empowered employees not only respond to customer needs directly during service delivery but also deal with dissatisfied customers during service recovery. Bowen and Lawler consider employees' increased job satisfaction, warmer and more enthusiastic interaction with customers and customer retention through word-of-mouth advertisement as the major benefits of personnel empowerment. The third reason why interest in the concept of empowerment has grown is the “beneficial results” of personnel empowerment, which in some studies have shown increases in sales and profit, cost reduction, higher customer satisfaction, fewer customer complaints, increased loyalty to the organization, increased effectiveness, higher numbers of customers, effective problem solving (as well as problem prevention) and increased coordination between functions (e.g., Spreitzer, 1995; Fulford and Enz, 1995; Klagge, 1998; D'anunzio and McAndrew, 1999; Siegal and Gardner, 2000; Sigler and Pearson, 2000; Niehoff et al., 2001; Alan and Sashkin, 2002). What factors influence empowerment? Some researchers argue the importance of trust among employees as one of the conditions for the success of empowerment practices (e.g., Mishra and Spreitzer, 1998; Andrews, 1994; Mayer et al., 1995;

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Owen, 1996; Harari, 1999). A manager's trust in an employee, in particular, may be a prerequisite for the success of empowerment since trust is an attempt to enhance the efficacy of the employee. However, the literature rarely deals with the issue of an employee's trust in a manager and this approach reflects the traditional paradigm, which views trust from the perspective of the manager rather than that of the employee. This study examines the relationships between the individuals' perceptions of psychological empowerment and their cognition and affectbased trust in their immediate managers. 2. Theoretical background 2.1. The concept of empowerment Many studies of the concept of empowerment and just as many definitions of the term exist in the literature. No consensus occurs in defining the concept. Although empowering practices are very common in work environments, academic research on the meaning and results of this concept has not kept pace. An investigation of the literature on empowerment reveals one point that could facilitate an acceptable definition of this concept. Most studies recognize that theory and practice utilize two different approaches to treat empowerment. The first approach named relational approach stresses environmental elements and defines empowerment as a set of managerial activities and practices that give employees power, control and authority (Bennis, 1984; Bennis and Nanus, 1985; Conger and Kanungo, 1988; Conger, 1989). Studies building on this approach perceive empowerment as a form of participation and define empowerment as the transmission of power in organizations to those who are less powerful. Those who adopt relational approach define empowerment as the managerial activities and practices that give employees the right to use and control the resources of the organization (Niehoff et al., 2001). Proponents of this perspective express the concept of empowerment as efforts to increase employees' participation level in the decision making process, which means encouraging employees to participate more actively in the whole organization. Chebat and Kollias (2000) compare empowering practices to Old Italian comedies. The common characteristic of these plays is that there is no written text, only a general idea related to characters, plan and scene. Some writers on empowerment think that for managerial behavior to empower employees managers should provide a positive emotional atmosphere, reward and encourage in visible and personal ways, express confidence, foster initiative and responsibility, and build on success (Conger, 1989). In the relational approach, the advantages of empowerment include increasing the problem solving capacity at the employee level, helping employees to realize their full potential (Klagge, 1998), sharing ideas regarding the organization's performance, presenting information that will affect organizational performance and direction, and giving employees the power to make decisions (Bowen and Lawler, 1992). The second approach builds from employees' perceptions. In this approach, the concept of psychological empowerment is

emphasized. This approach reflects whether or not the employees perceive themselves as being empowered. (e.g., Thomas and Velthouse, 1990; Spreitzer, 1995). According to the theoreticians who approach empowerment from the employees' perspective, empowerment reflects the psychological situation of the employee. If employees do not behave as expected when power is transferred to them, then the employees are either not aware of the fact that they have power or else feel powerless. In this case, empowerment is a psychological variable involving employee's self-perceptions (Forrester, 2000). The current literature refers to this approach as the cognitive or motivational approach. The cognitive approach emphasizes open communication, emotional support to decrease stress and anxiety, inspired goals to increase loyalty and participation, rather than the transmission of power. The cognitive approach aims to increase the employee's feeling of self-efficacy (Hardy and Leiba O' Sullivan, 1998). Keller and Dansereau (1995) found that managers' acts increasing employees' feeling of selfefficacy also increased the latter's feelings of empowerment, justice and control. Conger and Kanungo (1988: 471–473) investigated the answers of questions such as “Are subordinates automatically empowered when authority and resources are shared?” and “Do empowerment techniques only consist of participation in and sharing of organizational resources?”. They shift the concept of empowerment from the managerial practices component to the subordinates' perception level. Supporting the cognitive approach, Argyris (1998) criticizes empowerment practices, claiming that managers like personnel empowerment in theory, but that in practice they find the order-command model the best method. Then, empowerment practices are nothing more than an illusion or the emperor's new clothes. The cognitive approach, on the other hand, does not consider empowerment to be a personality trait transferred from one situation to another, but this approach sees empowerment as a concept emanating from the work environment and reflecting an individual's personal perceptions of self. This approach regards psychological empowerment as a continuous variable, by which individuals perceive themselves as more or less empowered rather than empowered or not empowered (Spreitzer, 1995). Spreitzer (1995) defines this concept as the psychological state that employees must experience for managerial empowerment interventions to be successful. Building on these two approaches, empowerment comprises both environmental and individual elements. Robbins et al. (2002) state that the interaction between environmental elements and personal cognition, perceptions and attitudes, along with the way in which these elements affect employee's work behavior, constitutes empowerment. Spreitzer (1995) found a number of antecedents of empowerment, some of which were related to individual factors, while others were external to the individuals. To these, she added some variables at the work unit level (Spreitzer, 1996). Some of these are strong sociopolitical support from subordinates, work groups, peers, and superiors; access to information; a work climate focusing on participation; and work units with little role ambiguity. Corsun and Enz (1999) assert a relationship between an employee's feeling of psychological empowerment and the supportive work

A. Ergeneli et al. / Journal of Business Research 60 (2007) 41–49

climate in which care and trust prevail. Moreover, employees' relationships with each other tend to be people oriented and based on sharing. The feeling of empowerment increases as leader approachability, group effectiveness and group value increase (Koberg et al., 1999). Thomas and Velthouse (1990) regard empowerment as consisting of four psychological states: meaningfulness, competence, choice, and impact. The first component, meaningfulness, relates to the value of the task, involving intrinsic caring about a given task. The employees' perceptions of how meaningful their tasks are affect their feelings of empowerment (1990: 672). Competence, the second component, refers to the belief that individuals are able to perform the task activities skillfully when they try. Hanc̦er and George (2003: 4) assert that this component was the strongest control mechanism for empowerment, which only works when employees want to be competent. The third component, choice, is the degree to which employees feel a causal responsibility for choosing or regulating task actions. The last component, impact, is the degree to which employees perceive their behaviors as ‘making a difference’ in terms of accomplishing the task. In other words, the “employee feels that the work has impact beyond the immediate job” (Thomas and Velthouse, 1990: 672–3). Building from Thomas and Velthouse's (1990) model, Spreitzer (1995) creates a measure of empowerment, where she designates meaningfulness as “meaning” and defines it as “the value of a work goal or purpose, judged in relation to an individual's own ideals or standards” (p. 1443). She explains competence as “an individual's belief in his or her capacity to perform activities with skill”. She renames the “choice” component as self-determination and defines it as “autonomy in the initiation and continuation of work behavior or processes” and redefines the “impact” component as “the degree to which an individual can influence strategic, administrative or operating outcomes at work” (p. 1443). Siegal and Gardner (2000) focus on the relationships between certain organizational factors and psychological empowerment components. They report that communication with managers and general relations within a company were significantly related to the empowerment components of meaning, self-determination and impact, but not related to competence. Other studies attempt to investigate whether demographic factors are related to psychological empowerment as well as its components. One of those studies demonstrates no relationships between staff perception of empowerment and demographic factors such as years of experience or level of education (Miller et al., 2001). Others (e.g., Koberg et al., 1999; Hanc̦er and George, 2003) put forth a positive relationship between feelings of empowerment and tenure in the organization. In other words, more tenured employees are better adapted to the work atmosphere, and they learn through experience that effort and persistence can lead to feelings of competence and performance, so they are likely to feel more empowered (Schneider, 1987). Denmark (1993) finds that the higher the status, the greater the individual's (whether male or female) perception of

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empowerment. Partially supporting this result, Koberg et al. (1999) point out that perceived empowerment did not differ significantly between male and female. In contrast, Hanc̦er and George (2003) report a significant relationship between gender and psychological empowerment, stating that females felt less empowered than males in the meaning and impact components. Supporting the expectation that older employees might have concerns about age discrimination and reduced alternative employment (Mishra and Spreitzer, 1998), Hanc̦er and George (2003) find that older employees indicate higher scores in the meaning, competence and impact components of empowerment than younger ones. Kram (1983) asserts that better educated people would be more likely to experience feelings of empowerment as they were more career or profession oriented people. Contrary to these expectations, Hanc̦er and George (2003) find that employees with less education have higher scores, especially in the meaning component and the general feeling of empowerment. 2.2. Trust Trust is a lubricant element that facilitates activities in terms of organizational behavior. When one evaluates trust in terms of intra-organizational relations, this exhibits itself mostly as an employee's trust in a manager or a manager's trust in an employee. Apart from these dyadic trust relations, mutual trust in peers, teams and departments within the organization must also exist. Interpersonal trust is the expectancy held by an individual or group of people that they can rely on the word or promise of another party (Rotter, 1967, 1971, 1980). Mishra and Spreitzer (1998) assert that trust depends on the belief that the other party is competent, open, concerned and reliable. According to McAllister (1995), interpersonal trust, which is essential for organizational coordination and control, has cognition and affect-based components. Lewis and Weigert (1985) were the first to claim the existence of those components of trust. However, it was McAllister (1995) who first indicated with experimental evidence that trust had two components, namely cognition-based and affect-based trust in an organizational environment. The cognition-based component treats trust or distrust in the other party as a rational decision, based on experience and premises such as responsibility and competence. Performing tasks efficiently and completing tasks on time are some of the objective and measurable criteria when considered in the context of the work environment. McAllister (1995) explains that cognition-based trust relates to beliefs about an individual's reliability, dependability and competence; whereas affect-based trust requires deep emotional investment in a relationship. This type of trust does not exist in all relationships. Interest, support and care are of primary importance in these relationships (McAllister, 1995: 25–6; Costigan et al., 1998). McAllister (1995) also states that affect-based trust relates to the emotional bond created by the mutual caring and concern that exist in individuals. In high-

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trust relationships, managers engage in little control based monitoring behavior. This indicates that trust plays an important role in determining the quality of relationships between employees and managers. Studies discussing the reasons for failure and the conditions conducive to success in empowerment practices emphasize the importance of trust (Andrews, 1994; Owen, 1996; Harari, 1999). In a study by Laschinger (2004), staff nurses felt that when the environment empowers individuals, they respond by trusting their managers more. Another study discovered that empowered teachers in their work environment have higher levels of interpersonal trust in their principals (Moye et al., 2005). Other studies accept trust as a critical prerequisite before managers empower employees (Mishra and Spreitzer, 1998; Mayer et al., 1995, Robbins et al., 2002). However, a look at the literature reveals a lack of field research in this area. A study to determine the factors hindering or resulting in the spread of empowerment in a company where personnel empowerment efforts had failed noted that both employees and managers underlined the importance of trust (D'anunzio and McAndrew, 1999). Examining many firms, Andrews (1994) claims that the lack of trust within an organization is a key element of failure, forming a hidden and invisible barrier preventing personnel empowerment efforts from resulting in success. Empowerment is the fruit of trust. Andrews (1994) states that in relationships between employees and managers, mutual trust creates a distinctive atmosphere for personnel empowerment. 3. Purpose of this research Although the banking sector in Turkey consists of organizations which employ highly qualified people, after downsizing and involuntary restructuring due to the economic crises in 2000 and 2001, it is likely that the employees are distrustful of management. This study assumed that trust is one of the major factors in the individuals' perceptions of their working environment that can shape their feelings of empowerment. Considering the positive influence of personnel empowerment, especially in the banking sector, and the possible impact of trust on subordinates' cognition of empowerment, this research will measure the perception of psychological empowerment of bank managers and how psychological empowerment relates to their cognition and affect-based trust in their immediate managers. Since empowerment is a set of cognitions, the assessment of empowerment through perceptions is essential (Spreitzer, 1996). In this study, perceptions of both psychological empowerment and trust were the main concerns. The responses given to the questionnaire should show the importance of subordinates' trust in their immediate managers regarding psychological empowerment, as well as the components of psychological empowerment of subordinates, which seems to be less evident in the literature. The specific purposes and related hypotheses of this research are as below: The hypothesis to identify the relationship between bank managers' overall psychological empowerment perceptions and

their cognition and affect-based trust in their immediate managers, is as follows: H1. The individuals' cognition and affect-based trust in their immediate managers affect their overall psychological empowerment perceptions. The hypotheses to identify the relationships between each of psychological empowerment aspects and cognition and affectbased trust of the bank managers are as follows: H2a. The individuals' cognition and affect-based trust in their immediate managers affect their meaning aspect of psychological empowerment. H2b. The individuals' cognition and affect-based trust in their immediate managers affect their competence aspect of psychological empowerment. H2c. The individuals' cognition and affect-based trust in their immediate managers affect their self-determination aspect of psychological empowerment. H2d. The individuals' cognition and affect-based trust in their immediate managers affect their impact aspect of psychological empowerment. 4. Method 4.1. Measures This study assesses the psychological empowerment perceptions of bank managers by using the Spreitzer's (1995, 1996) Psychological Empowerment Scale. The scale contains three items for each of the four components of psychological empowerment: meaning, competence, self-determination and impact. A Likert-type scale enables the respondents to evaluate each item by providing five alternatives, scoring from 1 (strongly disagree) to 5 (strongly agree). The higher scores indicate the perception of being more psychologically empowered. The study includes an application of McAllister's (1995) instrument to measure cognition and affect-based trust. The instrument contains six items to assess cognition-based trust and five items for affect-based trust. A five point Likert-type scale evaluates the responses ranging from 1 (strongly disagree) to 5 (strongly agree). Adding up the scores given to each item makes up the total scores of respondents for both instruments. The questionnaire included respondents' education level, tenure with current manager, gender, years of work experience, managerial position held in the bank and age as demographic variables. A group of experts established the face and content validity of the instruments. The Cronbach Alpha coefficients for the scales used in this study are as follows: • • • •

Psychological empowerment (α = 0.90), Meaning (α = 0.83), Competence (α = 0.84), Self-determination (α = 0.78),

A. Ergeneli et al. / Journal of Business Research 60 (2007) 41–49 Table 1 Demographic profile of the sample Demographic variables Education Level High School Under graduate Graduate Tenure with current manager Less than 1 year 1–3 years 4–6 years 7–10 years 11–14 years More than 15 years Gender Female Male Years of work experience Less than 1 year 1–3 years 4–6 years 7–10 years 11–14 years More than 15 years Managerial position Manager Assistant manager Supervisor Age 20–29 30–39 40–49 50 and over

Frequency (n)

Percentile (%)

38 155 27

17.3 70.4 12.3

74 120 12 8 4 2

33.6 54.6 5.5 3.6 1.8 0.9

98 122

44.5 55.5

3 17 32 33 32 103

1.5 7.7 14.5 15.0 14.5 46.8

67 71 82

30.4 32.3 37.3

26 94 88 12

11.8 42.7 40.0 5.5

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Table 3 Results of the hierarchical regression analysis for overall psychological empowerment

Education Tenure with current manager Gender Years of work experience Position Age Cognition-based trust Affective-based trust F df R2 ΔR2

Step 1

Step 2

−.064 −.086 .027 −.029 .253 ⁎ .056

− .080 − .086 .069 − .002 .237 ⁎ .016 .224 ⁎⁎ .135 5.96 ⁎ 8 .187 .112 ⁎⁎⁎

2.83 ⁎⁎ 6 .075

⁎ p b .001. ⁎⁎ p b .05. ⁎⁎⁎ p b .01.

manager and supervisor) in these banks constitute the data for this study. Most of the participants have undergraduate degrees, almost half of them are working with their current manager for up to three years at the time of the study, 55% of them are male and 45% of them are female. Almost half of the participants have been working for more than 15 years, 37% of them are supervisors, 32% are assistant managers and 30% of them are managers and most of them are between the ages of 30 and 49. Table 1 provides profile details. As the questionnaire included a scale to measure individuals' trust in their immediate managers, participants put their response sheet in a sealed envelope upon completion to keep the data confidential and accurate. Then, participants left their completed questionnaires to a collection point at each bank branch within a week.

• Impact (α = 0.88), • Cognition-based trust (α = 0.87), • Affect-based trust (α = 0.88). 4.2. Participants and procedure

5. Findings This study includes attempting to reach all of the 148 bank branches in Ankara, Turkey. The study results follow from 94 responses (a return rate of 63%). The 54 out of 148 bank branches were not reachable as they had either moved or closed down, or just refused to participate. Questionnaires from 10 banks were faulty or incomplete, analyses include data from a total of 84 bank branches. Thus, 220 questionnaires from respondents holding managerial positions (manager, assistant

The analysis starts with designating the descriptive statistics for demographics in order to provide an overall picture of the sample. Table 1 includes descriptive statistics of the respondents. In the second step, intercorrelations among study variables take place. Table 2 illustrates the intercorrelations between overall psychological empowerment, empowerment aspects, and affect-based and cognition-based trust variables.

Table 2 Intercorrelations between psychological empowerment components and trust Variable

M

SD

1

2

3

4

5

6

7

1. Psychological Empowerment Scale (overall) 2. Meaning 3. Competence 4. Self-determination 5. Impact 6. Cognition-based trust in manager 7. Affect-based trust in manager

4.45 4.70 4.68 4.12 4.29 4.73 3.94

.56 .59 .61 .77 .82 .93 .98

1.00 0.76 ⁎ 0.80 ⁎ 0.85 ⁎ 0.78 ⁎ 0.40 ⁎ 0.30 ⁎

1.00 0.74 ⁎ 0.48 ⁎ 0.33 ⁎ 0.26 ⁎ 0.22 ⁎

1.00 0.53 ⁎ 0.41 ⁎ 0.32 ⁎ 0.23 ⁎

1.00 0.63 ⁎ 0.25 ⁎ 0.23 ⁎

1.00 0.26 ⁎ 0.26 ⁎

1.00 0.75 ⁎

1.00

⁎ p b 0.01.

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Table 4 Results of the moderated regression analysis of position for overall psychological empowerment Step 1 Cognition-based trust Affective-based trust Position Position × affect-based trust Position × cognition-based trust F df R2 ΔR2

.221⁎ .129 .226⁎⁎⁎ 14.43⁎⁎⁎ 3 .169⁎⁎⁎

Step 2 .090 .189 .346 .248 .116 8.65⁎⁎⁎ 5 .170 .001

⁎p b .05. ⁎⁎⁎p b .001.

Multiple regression analysis tests the first hypothesis identifying the role of trust variables in overall psychological empowerment. Hierarchical regression analysis helps to account for the simultaneous and overlapping effects of two trust variables and demographic variables by taking the overall psychological empowerment as the dependent variable, cognition and affect-based trust as the independent variables and demographic factors (education, tenure with current manager, gender, years of work experience, position and age) as control variables (Table 3). The results of the regression analysis reveal that managerial position accounts to a significant extent for the overall psychological empowerment variability in the first step. The result, [R2 = .075, F (6,210) = 2.83, p b .05], indicates that when managerial level increases from supervisor to manager, overall psychological empowerment also increases. The second step of the hierarchical regression analysis revealed that a direct positive effect of cognition-based trust accounted for overall psychological empowerment, after controlling for the effects of demographics, especially position [R2 change = .112, F (2,208) = 5.96, p b .001]. The beta coefficient for cognition-based trust was significant (β = .224, p b .05), indicating a direct and positive relationship between overall psychological empowerment and cognition-based trust. Table 5 Results of the hierarchical regression analysis for meaning aspect of psychological empowerment (DV = meaning)

Education Tenure with current manager Gender Years of work experience Position Age Cognition-based trust Affective-based trust F df R2 ΔR2 ⁎p b .05. ⁎⁎⁎p b .001.

Step 1

Step 2

− .088 .007 .078 .019 .098 .152

− .098 .002 .110 .001 .079 .018 .227⁎ .047 3.12⁎⁎⁎ 8 .120 .068⁎⁎⁎

1.63 6 .052

Table 6 Results of the hierarchical regression analysis for competence aspect of psychological empowerment (DV = competence)

Education Tenure with current manager Gender Years of work experience Position Age Cognition-based trust Affective-based trust F df R2 ΔR2

Step 1

Step 2

− .033 .042 − .072 .124 .196 ⁎ .042

− .043 .035 − .035 .104 .172 .004 .288 ⁎⁎ .142 3.53 ⁎⁎⁎ 8 .133 .087 ⁎⁎⁎

1.45 6 .046

⁎ p b .05. ⁎⁎ p b .01. ⁎⁎⁎ p b .001.

Among all the demographic variables, position was the only control variable to yield a significant effect on overall psychological empowerment. Interaction in terms of position and trust variables helps to determine whether position and trust would interact in their effects on overall psychological empowerment. Although this study does not propose a specific hypothesis regarding position as a moderator in the trust and psychological empowerment relationship, the study applies moderated regression as a supplementary analysis. This analysis regresses overall psychological empowerment on cognition and affect-based trust in Step 1 and the interaction terms in Step 2 in order to explore whether position acts as a moderator in the empowerment–trust relationship (Table 4) (Baron and Kenny, 1986). As a result, not only change in R2 but also the interaction terms were insignificant when interaction terms were included in the regression equation. In other words, position does not act as a moderator in the psychological empowerment–trust relationship, however the analysis revealed that position has a direct and positive effect on overall psychological empowerment (β = .226, p b .001). Table 7 Results of the hierarchical regression analysis for self-determination aspect of psychological empowerment (DV = self-determination)

Education Tenure with current manager Gender Years of work experience Position Age Cognition-based trust Affective-based trust F df R2 ΔR2 ⁎ p b .05. ⁎⁎ p b .01. ⁎⁎⁎ p b .001.

Step 1

Step 2

− .067 .100 .011 − .051 .217 ⁎ .078

− 0.77 − .098 .039 − .043 .207 ⁎⁎ .044 .140 .127 3.26 ⁎⁎⁎ 8 .133 .061 ⁎⁎

2.00 6 .046

A. Ergeneli et al. / Journal of Business Research 60 (2007) 41–49 Table 8 Results of the hierarchical regression analysis for impact aspect of psychological empowerment (DV = impact)

Education Tenure with current manager Gender Years of work experience Position Age Cognition-based trust Affective-based trust F df R2 ΔR2

Step 1

Step 2

− .035 .097 .070 − .038 .280⁎⁎⁎ − .036

− .047 .097 .098 .050 .274⁎⁎⁎ − .074 .101 .198⁎ 4.30⁎⁎⁎ 8 .158 .078⁎⁎⁎

2.57⁎ 6 .079

⁎p b .05. ⁎⁎⁎p b .001.

In order to analyze H2a, H2b, H2c and H2d, which attempt to identify the relationship between each of the psychological empowerment aspects (meaning, self-determination, competence and impact) and the cognition and affect-based trust of bank managers, the study conducted regression equations for each aspect of psychological empowerment, taking cognition and affect-based trust as the independent variables and demographic factors (education, tenure with current manager, gender, years of work experience, position and age) as control variables. Firstly, the study applies hierarchical regression for the meaning aspect of psychological empowerment as the dependent variable and affect-based and cognition-based trust as independent variables while controlling for demographic factors (Table 5). Hierarchical regression analysis indicated a direct positive relationship between cognition-based trust and the meaning aspect of psychological empowerment, after controlling for the effects of demographics [R2 change = .068, F (2,207) = 3.12, p b .001]. The beta coefficient for cognition-based trust was significant (β = .227, p b .05), indicating a direct and positive relationship between cognition-based trust and the meaning aspect of psychological empowerment. The study follows the same route for the competence aspect of psychological empowerment (Table 6). Hierarchical regression analysis revealed a direct positive relationship between cognition-based trust and the competence aspect of psychological empowerment, after controlling for the effects of demographics [R2 change = .087, F (2,207) = 3.53, p b .001]. As the beta coefficient for the cognition-based trust is significant (β = .288, p b .01), a direct and positive relationship exists between cognition-based trust and the competence aspect. Repeating the same analysis for the self-determination aspect of psychological empowerment (Table 7), the second step of the hierarchical regression analysis revealed a direct positive relationship between position and the self-determination aspect of psychological empowerment, after controlling for the effects of demographics [R2 change = .061, F(2,207) = 3.26, p b .001]. The beta coefficient for position was significant (β = .207,

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p b .01), while no significant relationship exists between trust variables (both cognition and affect-based) and self-determination aspect of psychological empowerment. Finally, the study applies hierarchical regression for the last aspect of psychological empowerment. Impact is the dependent variable, trust variables (cognition and affect-based trust) are the independent variables and demographic factors are the control variables (Table 8). The results of the regression analysis revealed that managerial position accounted to a significant extent for the impact aspect of the empowerment variability in the first step. The result [R2 = .079, F (6,209) = 2.57, p b .05] indicates that when managerial level increases from supervisor to manager, the impact aspect of psychological empowerment also increases. The second step of the hierarchical regression analysis revealed a direct positive relationship between only affect-based trust and impact but no relationship between cognition-based trust and impact, after controlling for the effects of demographics, especially for position [R2 change = .078, F (2,207) = 4.30, p b .001]. The beta coefficient for the affect-based trust is significant (β = .198, p b .05), indicating a direct and positive relationship between affect-based trust and the impact aspect of psychological empowerment. 6. Results and discussion The results provide previously unavailable information regarding bank managers' perceptions of empowerment. One of the major findings of this study is that a significant relationship exists between the overall psychological empowerment perceptions of individuals and their cognition-based trust in their immediate managers. This result supports the studies that emphasize the importance of trust as one of the factors influencing empowerment practices. (e.g., Andrews, 1994; Harari, 1999; Mayer et al., 1995; Mishra and Spreitzer, 1998; Laschinger, 2004; Owen, 1996). As Koberg et al. (1999) stated trust tends to enhance communication, provide opportunities for effective problem solving and encourage individual discretion; thus, trust enables individuals to feel empowered. The current study results indicate that individuals' cognitionbased trust in their immediate managers provides a positive psychological empowerment. When belief in the immediate manager's reliability, dependability and competence increases, overall psychological empowerment increases as well. This result might mean that as individuals become aware of the fact that their personal goals can only be reachable with the cooperation of others (especially the immediate managers) and when the employees believe that their immediate managers are competent, reliable, responsible and dependable, they will probably view their managers as willing to help them to complete their tasks without error and on time, which increases the perception of psychological empowerment. Moye et al. (2005) state that trust contributes to a positive working environment characterized by supportive relationships. Since trust is a salient component of well functioning organizations (Lane, 1998 — cf Moye et al., 2005), this finding can provide bank managers with a useful framework for analyzing the

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concept of trust as a contribution to individuals' perceptions of empowerment. This is one of the fundamental factors of managerial and organizational effectiveness. Including demographic factors in the analysis as control variables reveals that the position held by the respondents at the bank relates to overall psychological empowerment and its selfdetermination and impact aspects, but does not relate to the relationship between psychological empowerment and trust. In other words, although position does not act as a moderator on the relationship between psychological empowerment and trust, position has a direct and positive effect on overall psychological empowerment. This result is similar to Denmark's (1993) finding: the higher the status, the more empowered individuals perceive themselves. Thus, respondents in higher managerial bank positions, who traditionally hold the most power, feel more empowered. Managerial positions in banks are important in terms of the ability to use and control resources and organizational opportunities, and most important of all, in terms of the feeling of having power in the work place. Although a higher position does not necessarily provide more power or awareness of power, for bank managers, in particular, this is position-strengthening. This result seems to be more meaningful if one considers Hofstede's power distance component of cultural variability, which refers to the extent to which the less powerful members of organizations within a country expect and accept that power distribution is unequal (Hofstede, 1980). In high power distance cultures, individuals are more accustomed to centralized authority while individuals from low power distance cultures are accustomed to being treated as equals, being consulted, working in decentralized organizations, and having authority delegated to them (Hofstede, 1993). According to Hofstede's results, the United States, Great Britain, Finland and Germany are examples of low power distance nations, whereas Mexico, India, Japan and France are examples of countries that have high scores on the power distance index. In this index, Turkey is relatively on the high power distance side. One may assert that in high power distance countries, the higher the position in the organization, the more empowered the person who holds that position is likely to feel. Thus, the first suggestion for further studies would be to investigate differences in individuals' empowerment perceptions based on their cultural background. In order to identify the relationships between each of the psychological empowerment aspects (meaning, self-determination, competence and impact) and cognition and affect-based trust of bank managers, the study applies regression analysis for each aspect of psychological empowerment, taking affect and cognition-based trust as the independent variables and demographic factors (education, tenure with current manager, gender, years of work experience, position and age) as control variables. In this study, trust in immediate manager relates significantly to only three aspects of psychological empowerment. Further analysis revealed that cognition-based trust is positively related to the meaning and competence aspects of psychological empowerment, while affect-based trust is a significant predictor of the impact aspect. The meaning aspect of empowerment refers to the degree to which the employees value their work in

relation to their own ideals and standards as well as the degree to which the requirements of work fit the employees' own beliefs, values and behavior. For that reason, when employees' cognition-based trust in their immediate managers increases, they find their work more meaningful in relation to their own standards. Cognition-based trust in immediate manager is also a predictor of the competence aspect of psychological empowerment. Some authors conceptualize competence as selfefficacy and define it as the cognitively perceived capability of the self (e.g., Conger and Kanungo, 1988). Bandura (1977: 79) explained self-efficacy as “the conviction that one can successfully execute the behavior required to produce the outcomes”. As self-efficacy is mainly the cognitive judgment of one's capability and competence, cognition-based trust in immediate manager can also be seen as a process of enhancing feelings of self-efficacy. When employees consider their managers' performance as excellent and reliable they are more likely to feel that they will get advisory support whenever they need it. Another important finding is that affect-based trust is a significant predictor of the impact aspect of psychological empowerment. Affect-based trust builds from emotional ties, interpersonal interests and support between individuals (Costigan et al., 1998), and the impact aspect of empowerment relates to the perception of being able to “make a difference” at work (Thomas and Velthouse, 1990). This finding shows that when interests and positive emotional ties between subordinates and their managers increase, the subordinates' belief in their own influence on certain strategic and administrative outcomes in their work unit increases as well. The findings show no relationship between any kind of trust and the self-determination aspect of psychological empowerment. Self-determination is an individual's sense of having a choice in initiating and regulating actions (Spreitzer, 1995). Subordinates with high self-determination often feel that they have the autonomy to determine how to perform their jobs. Thus, one may consider that the self-determination aspect of psychological empowerment relates to some internal factors like personality characteristics rather than trust in the manager, which seems to be an external factor. Hence, another suggestion for further research would be to investigate the relationship between certain personality factors and the self-determination aspect of psychological empowerment. The sample in this study consists of managers in the banking sector, who may feel autonomous when performing their jobs. This situation could be one of the limitations of this study. Thus, the other studies may compare these results with similar research based on non-managers. Compared to other research results which tried to identify the antecedents of feelings of empowerment (e.g., Spreitzer, 1996), the R2 values of this study, which express the total variation that accounts for by the current regression models, may not be impressive although trust variables are statistically significant. This result indicates that some other factors, aside from trust variables, might have an effect on psychological empowerment. Most empowerment research includes only a few independent

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variables in isolation from the others. However, Koberg et al. (1999) indicates that many factors influence empowerment and classifies these factors as individual (e.g., tenure, age, gender, self-concept, locus of control, self-efficacy, self-esteem), group (e.g., leader approachability, group effectiveness, worth of group, mutual influence, trust) and organizational (e.g., position in the hierarchy, organizational climate) characteristics. Thus, further studies can investigate the effects of other factors together with trust as classified by Koberg et al. (1999). In order to understand the impact of trust reciprocity on the feeling of empowerment, further studies may include not only the trust of employees in their managers, but the managers' trust in their subordinates. Moreover, since trust is an extremely complex and dynamic phenomenon, future studies may undertake the determination of trust among managerial levels and its impact on the feeling of psychological empowerment of subordinates. Additionally, future research seems to be necessary to establish the external validity of our model. Research on psychological empowerment–trust relationships could also include a broader range of sectors and other populations in order to make generalizations. References Alan R, Sashkin WM. Can organizational empowerment work in multinational settings? Acad Manage Exec 2002;16(1):102–16. Andrews GM. Mistrust, the hidden obstacle to empowerment. HR Mag 1994;39:66–70. Argyris C. Empowerment: the emperor's new clothes. Harvard Bus Rev 1998;76:98-106. Bandura A. Self-efficacy: toward a unifying theory of behavioral change. Psychol Rev 1977;84:191–215. Baron RM, Kenny DA. The moderator–mediator variable distinction in social psychological research: conceptual, strategic and statistical considerations. J Pers Soc Psychol 1986;51:1173–82. Bennis W. The competencies of leadership. Train Dev J 1984;38(8):15–9. Bennis WG, Nanus B. Leaders. New York: Harper & Row; 1985. Bowen DA, Lawler III EF. The empowerment of service workers: what, why, how, and when. Sloan Manage Rev 1992:31–9 [Spring]. Chebat JC, Kollias P. The impact of empowerment on customer contact employees' roles in service organizations. J Serv Res 2000;3(1):66–81. Conger JA. Leadership: the art of empowering others. Acad Manage Exec 1989;1(1):17–25. Conger JA, Kanungo RN. The empowerment process: integrating theory and practice. Acad Manage Rev 1988;13(3):471–82. Corsun DL, Enz CA. Predicting psychological empowerment among service workers: the effect of support-based relationships. Human Relat 1999;52 (2):205–24. Costigan RDS, Ilter S, Berman JJ. A multi-componential study of trust in organizations. J Manag Issue 1998;10(3):303–18. D'anunzio NG, McAndrew J. Re-empowering the empowered — the ultimate challenge. Pers Rev 1999;28(3):258–79. Denmark FL. Women, leadership and empowerment. Psychol Women Q 1993;17:343–56. Forrester R. Empowerment: rejuvenating a potent idea. Acad Manage Exec 2000;14(3):67–81. Fulford MD, Enz CA. The impact of empowerment on service employees. J Manag Issue 1995;7:161–75. Hanc̦er M, George RT. Psychological empowerment of non-supervisory employees working in full-service restaurants. Int J Hosp Manag 2003;22 (1):3-16.

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