Role of leader and followers' well-being, engagement and the moderating role of psychological capital

PurposeThe present study had two objectives, first objective was to examine the impact of authentic leadership on followers' well-being and work engagement. The second objective was to examine the moderating role of authentic leadership and followers' outcomes. Despite an immense amount of research on authentic leadership, how and when authentic leadership is more or less effective in promoting the well-being and work engagement of followers is little known. Drawing from the conservation of resource theory, the authors draw upon the interactionist perspective and suggest psychological capital is a dispositional boundary condition that influences the effectiveness of authentic leadership in promoting well-being and work engagement of followers.Design/methodology/approachUsing cross-sectional research design data were collected from 547 team members nested under 118 team leaders from the financial sector in India. The study used structural equation modelling and hierarchical regression analysis to examine the hypothesised relationships.FindingsThe findings from the study revealed that authentic leadership predicts followers' psychological well-being and work engagement. Also as proposed, the study found psychological capital moderates the relationship between authentic leadership and the well-being of followers. However, the study found psychological capital does not moderate the relationship between authentic leadership and followers' work engagement.Research limitations/implicationsThe study has helped expand the nomological network of authentic leadership by examining the authentic leadership model with followers' psychological well-being and work engagement. Further, the findings suggest that psychological capital being a dispositional boundary condition, it plays a contingent role in explaining the role of authentic leadership in promoting the well-being of followers.Practical implicationsThe results offer strong practical implications that can be considered as the basis for actionable strategies by the human resource management system of the organisation to enhance authentic leadership and psychological capital.Originality/valueThe study is unique in its scope and contribution, as it tries to develop an understanding of how and when authentic leadership promotes psychological well-being and work engagement by considering an interactionist approach in the Indian context.