Abstract:
The concept of employee engagement can be explained using the Job demand resource model
(JD-R model). However, the JD-R model does not explain the process behind the individuals'
response to those job resources provided by organizations and then fostered to create the
personal resources with various levels of employee engagement. So, employees' response
towards job resources based on Social Exchange Theory (SET) may also decide the level of
employees' engagement towards their job in the workplace. This study aims to address this
lacuna by explaining how and under which conditions the psychological capital will enhance
employee engagement through their response to those resources guided by norms of reciprocity
in SET. Accordingly, the research paper postulates the mediating role of transformational
leadership in the association between psychological capital and employee engagement. This
study was quantitative in nature; therefore, the data for this study was collected through the use
of previously structured questionnaires that had obtained good Cronbach's alpha values thus
confirming their reliability. Survey results were collected from a sample of 151 state bank
employees who were selecting random sampling technique. The statistical package of the SPSS
(version. 22.0) used to test the conceptual model and to arrive at these findings. The results also
show the positive significant relationship between psychological capital and employee
engagement. The findings also revealed that there is strong positive correlation among the
variables of psychological capital, transformational leadership and the employee engagement and
also employee engagement partial mediates the relationship between psychological capital and
employee engagement.
