1. Employment uncertainty and the role
of authentic leadership and Positive
Psychological Capital
Olga Epitropaki,
Associate Professor, The “Stavros Costopoulos” Chair in
Human Resource Management & Development
ALBA Graduate Business School, Greece

2. © Olga Epitropaki, ALBA, 2014

3. Key question:
Which are some critical mechanisms (individual
and organizational) that buffer and/or accentuate
the impact of employment uncertainty on
employee outcomes such as stress and meaning
in life?
 Positive Psychological Capital
 Authentic Leadership
 Job embeddedness
© Olga Epitropaki, ALBA, 2014

4. Employment uncertainty and outcomes
Subjective experience - triggered by objective circumstances.
Broader concept than job insecurity that extends “...beyond
threats to current employment to include threats to the
possibility of future employment for people seeking jobs in
company, industry or nation that is experiencing economic
difficulty or high unemployment” (Mantler et al., 2005).
Transactional model of stress & coping (Lazarus & Folkman,
1984) => Various adverse mental and physical health
outcomes such as stress (e.g., Barling & Kelloway, 1996;
Cheng & Chan, 2008; Dekker & Schaufeli, 1995).
H1: Employment uncertainty will be positively related to
participants’ reported levels of stress.
© Olga Epitropaki, ALBA, 2014

5. Employment uncertainty and outcomes
We expand existing frameworks of employment uncertainty
outcomes to include an important indicator of ‘eudemonic’ well-
being (e.g., Ilies et al., 2005), i.e., meaning in life.
“...the sense made of, and significance felt, regarding the
nature of one’s being and existence” (Steger et al., 2006).
Key to positive human functioning (e.g., Crumbaugh &
Maholick, 1964; Davis et al., 2000) and authentic living
(Kenyon, 2000).
Work comprises a vital component of a person’s identity. A
perception of threat to this central domain will have negative
consequences for a person’s overall assessment of life
meaning.
H2: Employment uncertainty will be negatively related to
participants’ reported meaning in life.
© Olga Epitropaki, ALBA, 2014

6. PsyCap and Authentic leadership as buffering
mechanisms
PsyCap represents positive psychological states and is
defined as “one’s positive appraisal of circumstances and
probability for success based on motivated effort and
perseverance” (Luthans et al., 2007).
Four dimensions: Self-efficacy, Optimism, Hope and
Resilience.
Psychological resource theory (e.g., Avey et al., 2010):
People with high levels of PsyCap will most likely retain high
levels of confidence that they remain marketable and will be
able to bounce back even if the worst scenario materializes
and lose their job.
H3: PsyCap will mediate the relationship between employment
uncertainty and stress as well as meaning in life.
© Olga Epitropaki, ALBA, 2014

7. PsyCap and Authentic leadership as buffering
mechanisms
 Authentic leadership: “..a pattern of leader behavior hat
draws upon and promotes both positive psychological
capacities and a positive ethical climate, to foster greater
self-awareness, an internalized moral perspective,
balanced processing of information and relational
transparency…” (Walumbwa et al., 2008).
 Buffering hypothesis of social support (e.g., Cohen & McKay,
1984): Through positive social exchanges with their
followers authentic leaders inspire them to work with more
positive emotion, and negative emotions related to
employment uncertainty are likely to subdue.
H4: Authentic leadership will mediate the relationship between
employment uncertainty and stress as well as meaning in life.
© Olga Epitropaki, ALBA, 2014

8. The moderating role of job embeddedness
 The extent to which individuals are enmeshed in their current
jobs (e.g., Mitchell et al., 2001). Three organizational forces that
keep people in their jobs: Fit, Links and Sacrifice.
 Bright but also dark side of job embeddedness (such as
reduction in social and human capital). Highly embedded
employees will experience the negative consequences of
employment uncertainty in a more severe manner than low
embedded employees. They will also benefit the most from the
mediating effects of PsyCap and authentic leadership.
H5: The indirect effects of employment uncertainty on perceived stress and
meaning in life through PsyCap will be stronger for employees with high job
embeddedness.
H6: The indirect effects of employment uncertainty on perceived stress and
meaning in life through authentic leadership will be stronger for employees with
high job embeddedness.
© Olga Epitropaki, ALBA, 2014

9. Sample
• 216 employees of 24 companies in Greece (randomly selected to
represent five main industrial sectors of the Greek economy) – 45%
response rate.
• Data collected in 2010 amidst the Greek economic crisis.
• The HR manager of each company agreed to distribute 20
questionnaires to a random sample of company employees.
• 64% male respondents.
• Average age: 37.8 years.
• Mean organizational tenure: 10.6 years
• 64% services, 23% manufacturing, 7% telecomms, 5% tourism and
1% shipping.
© Olga Epitropaki, ALBA, 2014

10. Measures
• Employment uncertainty (Crossley et al., 2007; Steel & Griffeth, 1989 ).
3-item Job Alternatives Index. α = .92
• PsyCap (Luthans et al., 2007). PCQ-24, α = .90.
• Authentic leadership (Walumbwa et al., 2008), 16-item scale, α = .96.
• Job embeddedness (Mitchell et al., 2001), 10-item scale, α = .88.
• Perceived Stress (Cohen & Williamson, 1988), 10-item short form of
perceived stress scale, α = .72.
• Meaning in Life (Steger et al., 2006), 10-item MLQ-P, α = .82.
• Control variables: Industry, company, gender, age, education, number of
past promotions and frequency of manager-employee contact
© Olga Epitropaki, ALBA, 2014

11. Results for the hypothesized (fully mediated) model
Employment
Uncertainty
Authentic
Leadership
Positive
Psychological
Capital
Meaning in
Life
Perceived
Stress
Self
Awareness
Relational
Transparency
Internalized
Moral
Perspective
Balanced
Processing
Efficacy Hope Resilience Optimism
0.89***
0.88***
0.92***
0.93***
0.73***
0.88*** 0.71*** 0.63***
-0.25**
-0.17*
0.25*
-0.53***
0.51***
-0.05
*p <0.05; * *p <0.01; *** p<0.001; For ease of readability, the control variables (industry, company, gender, age, education,
number of past promotions, frequency of manager-employee contact) are not shown in this figure.
0.21**

12. Standardized indirect effects of employment uncertainty on perceived stress and meaning
in life (through authentic leadership and positive psychological capital)
Perceived Stress Meaning in life
Bootstrapping BC
95% CI
Bootstrapping BC
95% CI
Mediator
Point
estimate
S.E. Lower Higher Point
estimate
S.E. Lower Higher
Authentic leadership 0.05 0.01 -0.03 0.06 -0.02* 0.03 -0.13 0.03
Positive Psychological Capital 0.10* 0.05 0.00 0.26† -0.10* 0.04 -0.23 -0.01†
Total indirect effect 0.10* 0.05 0.01 0.26† -0.12** 0.05 -0.28 -0.01†
Note. BC = bias-corrected; CI = confidence interval;. †95% CI that does not include zero. . *p< .05; **p< .01
© Olga Epitropaki, ALBA, 2014

13. Perceived Stress Meaning in Life
Estimate S.E. Estimate S.E.
Industry -0.05 0.08 0.03 0.07
Company -0.01 0.01 0.01 0.01
Gender 0.07 0.07 0.00 0.08
Age 0.04 0.06 -0.07 0.10
Education 0.00 0.07 -0.06 0.08
Number of past promotions 0.00 0.07 -0.08 0.08
Manager-employee contact 0.13 0.08 0.01 0.09
Employment Uncertainty 0.06 0.07 -0.03 0.08
Authentic leadership -0.06 0.10 0.25** 0.10
Positive Psychological Capital -0.52*** 0.12 0.54*** 0.14
Job Embeddedness -0.00 0.08 -0.01 0.08
Job Embeddedness x Authentic leadership -0.20** 0.09 0.26** 0.09
Job Embeddedness x Positive Psychological
Capital
0.12 0.10 0.25** 0.10
R2
0.26*** 0.21***
*p< .05; **p< .01; ***p< .001
Moderation results

14. Moderation results
1
1.5
2
2.5
3
3.5
4
4.5
5
Low Authentic Leadership High Authentic Leadership
PerceivedStress
Low Job embeddedness
High Job embeddedness

15. Moderation results
1
1.5
2
2.5
3
3.5
4
4.5
5
Low Authentic Leadership High Authentic Leadership
MeaninginLife
Low Job embeddedness
High Job embeddedness

16. Moderation results
1
1.5
2
2.5
3
3.5
4
4.5
5
Low Positive Psychological
Capital
High Positive
Psychological Capital
MeaninginLife
Low Job embeddedness
High Job embeddedness
BUT, no support for moderated-mediation.

17. Conclusions
 The study confirmed the important role of PsyCap (strong support) and
authentic leadership (moderate support) as buffering mechanisms of the
relationship between employment uncertainty and stress as well as meaning
in life.
 It also confirmed that the beneficial effects of PhyCap and authentic
leadership on outcomes are stronger for highly embedded employees.
 The results do not, however, support the moderated-mediation hypotheses
suggesting that the mediating effects of PsyCap and authentic leadership in
the relationship between employment uncertainty and outcomes hold
equally for both high and low embedded employees.
 Important practical implications in terms of PsyCap and authentic leadership
training.
© Olga Epitropaki, ALBA, 2014

18. Conclusions
Limitations of the study:
 Self-report, cross-sectional data => just a snapshot of the specific
relationships.
 No consideration of other positive psychological resources such as
wisdom and moral courage (e.g., Hannah et al., 2011) as well as other
organizational variables of potential interest such as ethical climate (e.g.,
Mulki et al., 2008).
© Olga Epitropaki, ALBA, 2014

19. Invest in your PsyCap!
© Olga Epitropaki, ALBA, 2014

20. Thank you!
oepitrop@alba.edu.gr