Psychological Capital as a Bridge Between Engaging Leadership and Psychological Well-Being: A Study of Low-Income Workers in Malaysia

Mental health issues have seen a significant rise globally, with Malaysia exhibiting the highest percentage of mental disorders in Southeast Asia. Particularly in low-income areas, employees believe that skilled, capable, and committed leaders are their most important organizational resource for enhancing their psychological health. Therefore, this study aims to examine the effects of engaging leadership, psychological capital, and psychological well-being among low-income workers in Malaysia. A total of 229 sets of data were collected from the bottom 40% of households in Malaysia using judgmental sampling. The hypotheses were analyzed using Partial Least Squares-Structural Equation Modelling (PLS-SEM). The findings demonstrated that engaging leadership positively affects psychological capital, and psychological capital positively affects psychological well-being. Further, the role of psychological capital as a mediator in the relationship between engaging leadership and psychological well-being was confirmed. This study recommends that various stakeholders, organizations, and employees foster employee mental health by considering and leveraging the positive impacts associated with engaging leadership. The findings contribute to a better understanding of how to engage leadership in promoting psychological well-being, particularly among low-income workers in the Malaysian context.