Treffer: Linking empowering leadership and work environment with employee performance: The mediating role of job stress.
Original Publication: Reading, MA : Andover Medical Publishers, c1990-
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BackgroundUnderstanding the influence of empowering leadership and a supportive work environment on job stress and employee performance can help organizations adopt effective management strategies. This, in turn, can lead to higher productivity, better quality of work, and increased organizational success.ObjectiveThis study aims to investigate relationship between empowering leadership, work environment, and employee performance by emphasizing the mediating role of job stress.MethodsThe sample population comprised 100 employees working in the culinary industry in Central Java, Indonesia, who were selected using the purposive sampling method. The data obtained were analyzed using SmartPLS 3.2.9 version to understand relationship between these variables.ResultsThe results showed that empowering leadership had no direct impact on employee performance and job stress. However, work environment was positively associated with employee performance and negatively related to job stress. The results also showed that job stress had a negative effect, and it partially mediated relationship between work environment and employee performance.ConclusionThis study significantly advanced the understanding of organizational behavior by emphasizing the essential role of work environment in shaping employee performance. In addition, the results showed that a positive work environment was strongly associated with higher employee performance and reduced job stress.
Declaration of conflicting interestsThe authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
AN0185232265;3rc01may.25;2025May20.03:05;v2.2.500
Linking empowering leadership and work environment with employee performance: The mediating role of job stress
Background: Understanding the influence of empowering leadership and a supportive work environment on job stress and employee performance can help organizations adopt effective management strategies. This, in turn, can lead to higher productivity, better quality of work, and increased organizational success. Objective: This study aims to investigate relationship between empowering leadership, work environment, and employee performance by emphasizing the mediating role of job stress. Methods: The sample population comprised 100 employees working in the culinary industry in Central Java, Indonesia, who were selected using the purposive sampling method. The data obtained were analyzed using SmartPLS 3.2.9 version to understand relationship between these variables. Results: The results showed that empowering leadership had no direct impact on employee performance and job stress. However, work environment was positively associated with employee performance and negatively related to job stress. The results also showed that job stress had a negative effect, and it partially mediated relationship between work environment and employee performance. Conclusion: This study significantly advanced the understanding of organizational behavior by emphasizing the essential role of work environment in shaping employee performance. In addition, the results showed that a positive work environment was strongly associated with higher employee performance and reduced job stress.
Keywords: empowering leadership; work environment; job stress; employee performance; structural equation modeling; partial least square
Introduction
The shift towards remote and hybrid work models has become a defining feature of modern organizations. In response, several organizations are making significant investments in digital technologies, such as artificial intelligence (AI), big data analytics, and cloud computing, to enhance efficiency and innovation.[1][2]–[3] Along with this technological shift, there is an increasing focus on empowering leadership,[4],[5] which plays a role in enabling rapid adaptation to disruptions and changes in the external environment. By fostering a culture of empowerment, leaders can help their employees become more agile and responsive to market changes. Therefore, empowering leadership is crucial as it builds a positive and agile culture, fosters innovation,[6] and improves overall organizational performance.
Several studies have shown that empowering leadership helps develop essential skills among employees. It also encourages initiative and creative thinking, which often leads to innovative solutions.[6],[7] Empowering leadership has been reported to have a positive association with various employees outcomes, including motivation, attitudes, and performance.[8],[9],[10]
Although empowering leadership is generally considered a positive approach, several studies have also shown that it can also lead to increased job-induced tension and potentially diminish employee performance.[11][12]–[13] Consequently, its effectiveness has been questioned, with several studies suggesting a curvilinear relationship between empowering leadership and job performance mediated by stress.[14] Employees who are happy and satisfied tend to be more productive and contribute more effectively to organizational goals. Workplace happiness often increases the level of motivation and commitment, leading to higher productivity and better contributions. This indicates that creating a positive work environment that promotes support and respect improves morale as well as increases outcomes and productivity. Therefore, this study aims to determine relationship between empowering leadership and work environment with employee performance by exploring the mediation role of job stress. Organizations can reduce job stress and enhance overall performance by fostering empowering leadership and creating a positive work environment, leading to sustainable success.
Literature review
Employee performance
Employee performance refers to how well employees carry out their duties and responsibilities. Understanding and managing this variable is essential[15],[16] for maximizing organizational efficiency and productivity. Organizations can create a positive environment that promotes continuous improvement and success by focusing on influential factors.[17],[18]
According to previous studies, organizations commonly use key performance indicators (KPIs) to align individual employee performance with organizational goals.[19] The dynamic model of ability, motivation, and opportunity (AMO) for human resources suggests that the variable is influenced by both organizational system-level (i.e., leadership, work environment, high-performance work system) and individual-level factors, which in turn affect satisfaction in workplace.[20] Moreover, leadership styles, including transformational, transactional, delegating, and empowering, have been found to have a substantial influence.[21][22][23][24]–[25]
Empowering leadership
Empowering leadership is a style that gives employees the autonomy, resources, and support needed to make decisions and take ownership of their work. This style emphasizes trust, collaboration, and the development of skills and confidence to grow professionally.[26],[27]
According to Arnold, Arad,[28] empowering leadership uses various approaches such as leading by example (i.e., leaders model the behaviors, attitudes, and work ethic they expect from their employees), participative decision-making (i.e., leaders involve employees in the decision-making process), coaching (i.e., leaders provide guidance, feedback, and support to help employees develop their skills and achieve their goals), informing (i.e., leaders ensures that employees are well-informed about relevant information, updates, and changes), and showing concern (i.e., leaders show care for employees' well-being and build strong interpersonal relationship).
Empowering leadership is also distinct from other styles because it fosters individual motivation by sharing power and granting autonomy to increased task complexity.[29] In addition, it involves power sharing, motivation, and development support to enhance experience of self-reliance and capability to work autonomously within the boundaries of organizational goals.[30] Empowering leadership has been reported to be associated with beneficial outcomes, such as creativity and innovation,[7] psychological empowerment, job satisfaction, organizational innovation behaviors,[26],[30] and job performance.[27] It is also associated with higher levels of employees trust, particularly when leaders perceive themselves as recipients of more organizational support.[26]
Empowering leadership behavior plays a vital role in employees thriving at work, which in turn influences their performance.[31] This style positively influences work behavior,[25] including performance and creativity at both individual and team levels.[32] In addition, it simultaneously decreases perceived stress at work.[33] Therefore,
Empowering leadership is positively associated with employee performance.
Empowering leadership is negatively associated with job stress.
Work environment
Work environment comprises the setting, conditions, and culture in which employee perform their duties. This includes workspace layout, ergonomics, lighting, temperature, noise levels, and overall cleanliness. A comfortable, well-organized physical space can significantly improve productivity and morale.[34],[35] In addition, work environment comprises the social and psychological aspects of workplace, including relationship with colleagues and supervisors, support systems, and overall culture. Positive interactions and a supportive atmosphere can enhance job satisfaction and reduce stress.[36] Therefore, organizations must consider the behavioral and situational factors that shape work environment. Managers need to intensively work on improving workplace for every employee.[37]
A healthy work environment includes open and clear communication, growth opportunities, healthy work relationship, equity, and a rewarding system.[34] The Healthy Work Environment (HWE) model emphasizes professional qualities and behaviors to foster a happy, healthy, and feasible environment.[38] Previous studies showed that workplace significantly impacts employees' morale, productivity, and performance.[34],[35] Factors such as noise, illumination, ventilation, and temperature positively impact productivity within the organization.[39] However, a toxic work environment has adverse effects on mental health, leading to serious psychological distress and an increased risk of depression.[40] Tox environment, including workplace ostracism, incivility, harassment, and bullying, negatively affect job productivity and lead to stress.[41],[42] Therefore,
Work environment is positively associated with employee performance.
Work environment is negatively associated with job stress.
Mediating role of job stress
According to Grochowska, Gawron,[43] job stress can be defined as the harmful physical and emotional responses that occur when the requirements of job do not match employees' capabilities, resources, or needs. Job stress, also known as occupational stress, arises when the demands of job exceed employees' ability to cope.[44],[45] This can stem from various factors, including workload, role ambiguity, lack of control, and interpersonal conflicts.[46] Effective job stress management comprises organizational strategies, such as clear communication, supportive leadership, and reasonable workload distribution. Individual strategies, such as developing time management skills, seeking social support, and practicing relaxation techniques, are also crucial in mitigating job stress. Therefore, employers and employees must work together to create a healthier, more balanced work environment.[47]
The impact of job stress is wide-ranging, affecting both physical and mental health.[48] Physically, it can lead to issues such as headaches, fatigue, sleep disturbances, and gastrointestinal problems. Long-term exposure can increase the risk of chronic conditions, including cardiovascular disease.[49] Mentally, it can cause anxiety, depression, and burnout,[43],[50] leading to decreased job satisfaction and productivity.[51]
Job stress has also been reported to be associated with decreased productivity, reduced efficiency, and poor-quality output.[51] In addition, relationship between job stress and employee performance has been studied, with results suggesting that job stress has a negative association.[52],[53] This negative association was observed across industries, including medical care, automobile, and plastic spare parts.[54] Factors contributing to job stress, such as role ambiguity, poor working environment, and lack of support, have been identified to cause decreased employee performance.[55] Therefore,
Job stress is negatively associated with employee performance.
Job stress can be a significant mediator in relationship between various variables.[56] Empowering leadership often comes with increased expectations and responsibilities, which can lead to heightened stress levels.[33] When employees are given more autonomy and decision-making power, it can lead to pressure to meet higher standards and fear of failure consequences, thereby increasing job-related stress.[14] In addition, factors such as high workload, time pressures, and unclear expectations can induce significant stress in an ideal work environment. This stress can act as a barrier, preventing employees from fully leveraging the positive aspects of their work environment to enhance performance.[57] Therefore,
Job stress significantly mediates the effect of empowering leadership on employee performance.
Job stress significantly mediates the effect of work environment on employee performance.
Materials and methods
Sample
This study used a quantitative design to examine the relationship between variables.[58] Quantitative study was often used in business and management to examine association among factors and compare results across subpopulations based on demographic characteristics. Therefore, employees working in the culinary industry in Central Java, Indonesia, were selected using purposive sampling, 160 questionnaires were distributed online, and 100 responses were submitted for data analysis. According to Kono and Sato,[59] a sample size of 100 respondents was generally considered suitable for Partial Least Squares Structural Equation Modeling (PLS-SEM), specifically in exploratory study contexts where small sample sizes were common. Consequently, a sample size of 100 was deemed adequate for this study. A total of 23% of the respondents were male, and 77% were female. In addition, 24% were under 20 years old, 63% were between 21 to 30 years old, 9% were between 31 to 40 years old, and 4% were above 41 years old. Most employees (63%) were between 21 and 30 years old, showing that the culinary industry in Central Java was largely composed of young adults. Furthermore, the majority of employees (74%) had less than 2 years of experience, showing a largely new workforce, and only 10% had 5 to 6 years of experience, suggesting that a few employees remained in the industry for a longer duration.
Measures
It was important to understand how these variables were measured to analyze empowering leadership, work environment, job stress, and employee performance. Empowering leadership measurement used the Managerial Practices Survey (MPS) developed by Yukl, Gordon,[60] which focused on consultation and delegation. The MPS in this study comprised 6 items scored on a 5-point Likert-type scale (1 = strongly disagree to 5 = strongly agree). The samples of 6 items were "
The Psychosocial Work Environment (PWE)[61] was used to measure work environment. The PWE in this study consisted of 4 items scored on a 5-point Likert-type scale (1 = strongly disagree to 5 = strongly agree). A sample of 4 items was "
A total of 6 single-item job stressors[62] were used to measure job stress. A sample of 6 items was "
The Individual Work Performance Questionnaire (IWPQ), as proposed by Koopmans and Bernaards,[63] was adapted to assess individual employee performance. The IWPQ in this study included 5 items scored on a 5-point Likert-type scale (1 = strongly disagree to 5 = strongly agree) such as "
Data analyses
PLS-SEM was used to analyze the proposed model, while the SmartPLS 3.2.9 version was used to analyze relationship between latent variables measured by sets of observed variables to achieve faster processing speed for data estimation.[64],[65] In addition, SmartPLS provided values for predefined indicators, internal consistency reliability, convergent validity, and discriminant validity according to Heterotrait-Monotrait (HTMT) criterion.[66]
Results
Based on the analysis results from SmartPLS 3.2.9, Table 1 presented the construct reliability and validity measures for empowering leadership, work environment, job stress, and employee performance. The item loadings of these variables ranged from 0.682 to 0.832, showing a strong relationship between the items and the constructs. The Cronbach's Alpha values of 0.877, 0.785, 0.878, and 0.835, respectively, suggested high internal consistency reliability. Compared with the original sources, the present study's result suggested slightly higher reliability. This showed that these responses showed inconsiderably less measurement error, and the items worked together more effectively to measure the intended concept. Furthermore, the composite reliability of 0.889, 0.861, 0.908, and 0.884, respectively, exceeded the recommended threshold of 0.7,[67] showing good reliability. The average variance extracted (AVE) of these variables ranged from 0.572 to 0.621, showing that the variance in the observed variables was due to the constructs. 'The results showed that the constructs had good reliability and validity, and this was indicated by high item loadings, composite reliability, Cronbach's Alpha values, and AVE.
Table 1. Construct reliability and validity.
Graph
Table 2 showed the results of the Fornell-Larcker and HTMT criteria for assessing discriminant validity among constructs. The diagonal values in the Fornell-Larcker criterion represented each construct's square root of the AVE. These values were exppected to be higher than the correlations between the constructs to show discriminant validity. In addition, all diagonal values (in bold) were higher than the off-diagonal values, showing that each construct shared more variance with its respective indicators compared to others. This suggested that the constructs had discriminant validity based on the Fornell-Larcker criterion. The HTMT values must be less than 0.85 to confirm discriminant validity,[68] with values close to 1 showing potential issues. All HTMT values were also below 0.85, further supporting the discriminant validity of the constructs. Consequently, the results from the Fornell-Larcker and HTMT criteria suggested that employee performance, empowering leadership, job stress, and work environment, exhibited discriminant validity. This showed that the measures used to assess these constructs were distinct from each other and captured unique variance, supporting the validity of the measurement model in the study.
Table 2. Discriminant validity.
Graph
Table 3. Model fit.
Graph
The model fit indices for the saturated and estimated models are presented in Table 3. The fit indices included Standardized Root Mean Square Residual (SRMR), d_ULS, d_G, Chi-Square, and Normed Fit Index (NFI). The table also showed that the saturated and estimated models exhibited the same values for SRMR, d_ULS, d_G, Chi-Square, and NFI. This showed that the estimated model fitted the data and the saturated model. Furthermore, the fit indices suggested that the estimated model accurately suited the data. The SRMR value of 0.083 showed a good fit, with lower values generally showing a better fit. The d_ULS and d_G values of 1.594 and 0.764, respectively, were within acceptable ranges. The Chi-Square value of 381.214 was a measure of the discrepancy between the observed data and the model, with a non-significant Chi-Square showing a good fit. The NFI value of 0.690 also suggested a reasonable fit, with approximately 1 value showing a better fit.
Table 4 and Figure 1 provided path coefficients, standard deviations, t statistics, and p values for relationships between empowering leadership, work environment, job stress, and employee performance. The results suggested that empowering leadership did not show a significant direct impact on either employee performance (t-value = 0.482, p-value = 0.630) or job stress (t-value = 0.892, p-value = 0.373) in this analysis. These results rejected hypotheses H1 and H2. Moreover, the results showed that work environment was positively associated with employee performance (β = 0.489, t-value = 6.253, p-value = 0.000) and negatively related to job stress (β = −0.432, t-value = 4.746, p-value = 0.000). These provided support for H3 and H4. In addition, job stress had a negative direct effect on employee performance (β = −0.336, t-value = 4.893, p-value = 0.000), which confirmed H5, showing that higher job stress was associated with lower employee performance. For path analysis of mediation effects, the indirect effect of empowering leadership on employee performance through job stress was insignificant (t-value = 0.855, p-value = 0.393), which rejected H6. However, the indirect effect of work environment on employee performance through job stress was significant (β = 0.145, t-value = 3.342, p-value = 0.001), which confirmed H7, showing that the impact of work environment on employee performance was partially mediated by job stress.
Graph: Figure 1. Standardized path coefficients.
Table 4. Path coefficients.
Graph
Discussion
The results showed that empowering leadership did not have a significant direct impact on either employee performance or job stress. Consequently, while empowering leadership could create a supportive environment, it could not solely dictate performance outcomes. Empowering leadership emphasized autonomy, which could be beneficial. However, without adequate guidance and clear expectations, employees could struggle to align their efforts with organizational goals, hence not achieving optimal performance.[11],[69] In this study, relationship between empowering leadership and job stress was complex. While autonomy could reduce stress by giving employees more control over their work, it could also increase stress due to heightened responsibility and decision-making pressure.[70] Not all employees thrive under increased autonomy, some prefer a more structured environment with clear directives. This individual variability showed that empowering leadership could have differential impacts on job stress, with some employees experiencing increased stress due to uncertainty and others benefiting from the increased autonomy.
Work environment played a significant role in shaping employee performance and managing job stress, with substantial evidence supporting its positive association with performance and its negative relationship with job stress. A positive work environment could improve employee performance through several mechanisms, such as a well-structured, supportive, and engaging work environment, which provided employees with the necessary resources, clear expectations, and constructive feedback. This setting fostered a sense of belonging, motivating employees to perform better.[71] Elements such as ergonomic workspaces, adequate lighting, and access to necessary tools and technology enabled employees to work efficiently and comfortably, reducing barriers to productivity. Moreover, a collaborative atmosphere where teamwork and open communication were encouraged could lead to innovation,[72] further driving employee performance.[73] Furthermore, a positive work environment significantly reduced job stress. Factors such as peer support and recognition of achievements created a sense of security and value. Stress levels of employees decreased when appreciated and supported.[40] In addition, work environment that promoted flexibility at work through flexible schedules, remote work options, and wellness programs helped employees manage personal and professional demands, hence reducing overall stress.
In this study, job stress exerted a negative direct effect on employee performance. High levels of job stress could trigger physiological responses such as increased heart rate and blood pressure, which impaired cognitive functions essential for task execution.[74] This physiological stress response diminished concentration, decision-making abilities, and problem-solving skills, directly reducing the quality and efficiency of work performed. In addition, job stress fostered negative workplace behaviors such as increased conflict with colleagues and withdrawal from teamwork.[55] Under high stress, employees were more likely to make mistakes, which could be costly and time-consuming. This impacted individual performance and had a ripple effect on team and organizational outcomes.
The results also showed that work environment played an important role in shaping employee performance, and this relationship was significantly mediated by job stress. A positive work environment characterized by supportive management, collaborative colleagues, and well-defined roles could mitigate job stress, enhancing employee performance. When employees feel valued, their stress levels decrease, giving room for more efficacy in their tasks.[74] This conducive atmosphere fostered motivation and satisfaction, which were critical to high performance. Meanwhile, a toxic work environment exacerbated job stress, directly impairing performance.[41],[42] Factors such as poor management, lack of resources, unclear expectations, and interpersonal conflicts created a high-stress environment. Elevated stress levels triggered physiological and psychological responses like anxiety, burnout, and cognitive overload. These responses diminished the ability to concentrate, make decisions, and maintain productivity.
Conclusion
In conclusion, based on the results, empowering leadership could not directly influence employee performance or job stress. A positive work environment was crucial in improving performance and reducing employees stress levels. This study revealed the significant negative impact of job stress on employee performance and the partially mediated effect of work environment on performance through job stress. Therefore, organizations aiming to improve employee performance and reduce job stress must focus on creating a supportive and positive work environment that fostered employees well-being and productivity.
The rise of hybrid work had led to new challenges and opportunities in maintaining a positive work environment. Remote work could reduce certain stressors but could also introduce others, such as feelings of isolation or difficulty balancing home and work responsibilities. The emphasis of this study on the importance of a supportive work environment was consistent with the need for organizations to adapt to these changing work conditions, ensuring that both in-office and remote employees feel connected, supported, and empowered.
Organizations must cultivate a positive work environment that fostered well-being and productivity. This included factors such as clear communication, supportive relationship, recognition of achievements, and opportunities for growth and development,[75] which could help reduce job stress and improve overall performance. Furthermore, recognizing the impact of job stress on employee performance must implement strategies to mitigate stressors in workplace. This included providing resources for stress management, promoting flexibility at work, offering training on resilience and coping mechanisms, and creating a culture that values mental health and well-being. Organizations could help employees thrive and perform at their best by proactively addressing job stress.
Limitations and future study direction
The study's results offered valuable insights into the culinary industry in Central Java, Indonesia, but the specific context and small sample size of 100 employees limited the broader applicability of the results to other industries or regions. Different organizational settings or cultural backgrounds could yield varying results. Moreover, using a cross-sectional design in this study limited the ability to establish causality between empowering leadership, work environment, job stress, and employee performance. Conducting longitudinal studies to explore the long-term effects of empowering leadership and work environment on employee performance and job stress provided a deeper understanding of this relationship over time. In addition, investigating the impact of empowering leadership and work environment at different organizational levels (individual, team, organizational) could offer insights into how these factors influence performance and stress across several levels.
Practical implications
The unique contribution of this study was in its focus on the culinary industry in Central Java, Indonesia. This context provided fresh insights into how work environment factors and job stress influence employees outcomes in a region with distinct cultural values and work practices. The study offered a deeper understanding of organizational dynamics in a non-Western, emerging market context, contributing to the global body of knowledge by showing how cultural and industry-specific elements could shape relationship between work environment, job stress, and employee performance. This localized focus improved the originality of the study, offering practical implications for organizations in similar cultural and economic environment.
This study significantly advanced the understanding of organizational behavior and human resource management by emphasizing the significant role of work environment in shaping employee outcomes. It showed that a positive work environment was strongly linked to higher employee performance and reduced job stress, highlighting the importance of environmental factors in promoting employees well-being and productivity. In addition, this study identified job stress as a partial mediator, showing that the positive effects of work environment on performance were partly through its influence on stress levels. This insight enhanced behavioral science by elucidating the indirect pathways connecting environmental conditions to performance, showing that effective strategies for enhancing workforce performance must integrate both environmental improvement and stress management.
Acknowledgments
The authors would like to express heartfelt gratitude to Ika Nurul Qamary, a Full Professor at Universitas Muhammadiyah Yogyakarta – Indonesia, for her invaluable insights and constructive comments on this article. Her expertise and thoughtful feedback significantly enhanced the quality and clarity of this work.
Statements and declarations
1 Udin Udin https://orcid.org/0000-0002-5491-9085
2 The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This study was supported and funded by the Research and Innovation Center of Universitas Muhammadiyah Yogyakarta – Indonesia.
3 The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
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By Udin Udin; Khoirunnisa Fitriani and Radyan Dananjoyo
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