Impact of Perceived Overqualification on Work Alienation through Psychological Contract: Moderating Role of Empowering Leadership

Abstract

The study's objective was to examine the nature of the relationship between work alienation and perceived overqualification. Specifically, it examined two dimensions of psychological contracts, i.e., relational and transactional, as potential mediators between perceived overqualification and work alienation. Additionally, the moderating impact of empowered leadership on the two mediating effects mentioned above was also examined in this study. Employees of government-run projects were given a self-administered questionnaire as part of a survey (N=232). To determine the validity of the measurement scales, Cronbach's alpha was used. Regression analysis was performed using two models: model 8 of the Process macro for moderated mediation and, linear regression without any moderators or mediators. The analyses produced mixed findings, suggesting that the relational psychological contract mediates the association between work alienation and perceived overqualification to some extent; while no mediation was found for the transactional psychological contract. Positive results were reported for the direct correlation between perceived overqualification and work alienation. Empowering leadership moderated this relationship such that when leaders empower the overqualified employees, work alienation mitigates. Moderated mediation was found for one indirect path via relational psychological contract and non-existent for the transactional psychological contract. These findings highlight the significance of recruiting empowered leaders in order to minimize the undesirable effects of overqualification among employees and imply that the negative effects of perceived overqualification on work alienation are avoidable by promoting long-term commitments. In order to keep a skilled workforce, managers and organizations should enable the workers to develop a stronger attachment to their profession. Potential tactics include (i) leaders empowering their subordinates, (ii) developing high-quality relationships, viii and (iii) providing peace of mind by fostering relational psychological contracts, e.g., by offering them long-term contracts.