EMPOWERING LEADERSHIP AND EMPLOYEE PERFORMANCE: A MODERATED MEDIATION MODEL OF LEADER–MEMBER EXCHANGE, PSYCHOLOGICAL EMPOWERMENT, AND EMPOWERMENT CLIMATE

This study examines how empowering leadership influences employee performance through the sequential mediating roles of leader–member exchange (LMX) and psychological empowerment, while also investigating the moderating role of an empowerment climate. Drawing on social exchange theory and motivational perspectives, this study proposes a moderated sequential mediation model to explain both the underlying mechanisms and the contextual boundary conditions of leadership effectiveness. A quantitative research design was employed, with data collected from 295 employees working in logistics firms in Hai Phong, Vietnam. Partial least squares structural equation modelling (PLS-SEM) was used to test the measurement and structural models, as well as the mediation and moderation effects. The results reveal that empowering leadership does not significantly affect employee performance. Instead, its influence operates entirely through a sequential mediation mechanism involving leader–member exchange and psychological empowerment, indicating a full mediation effect. In addition, an empowerment climate has a significant but negative moderating effect, weakening the relationship between psychological empowerment and employee performance. This study contributes to the literature by demonstrating that empowering leadership affects performance only indirectly through integrated relational and psychological processes, thereby advancing the understanding of the “black box” between leadership and performance. The findings also highlight the importance of contextual factors and provide practical implications for organizations in emerging logistics contexts seeking to enhance employee performance.