Employee empowerment programs have been widely adopted in the public sector as well as private sectors as a way to improve employee performance. Empowered employees improve performance largely by finding innovative ways of correcting errors in production and service delivery and redesigning work processes. This study explores how psychological empowerment influences employee’s performance in small and medium scale enterprises. The objectives of the study is to present the correlation and impacts or influence of dimensions of psychological empowerment on employee performance. The study is descriptive type of research which is basically employed survey method. For the purpose of this study both qualitative and quantitative research approach were used. The respondents were stratified based on the activities they are engaged, then Simple random sampling design was used to collect data that were used to assess the four dimensions of psychological empowerment variables. Using a sample of 125 employed individuals of which 102 collected, a 12 item 5point likert scale of psychological empowerment measurement was developed with subscale reliabilities as follows: meaning (0.861), competence (0.754), self-determination (0.868) and impact (0.885). Similarly an 11 item 5 point likert scale with reliability test of Cronbatch Alpha 0.911 was used to measure performance. Primary data is the main source of data and the data were obtained by using questionnaire. To analyze the data inferential statistics were applied to gain an insight about the correlation between the variables and the influences that each variable have on dependent variable with the help of statistical package for social science (SPSS) version 20 software. The outcome from the study indicates that employee empowerment is essential in this era of globalization to enable the organization to respond quickly to any changes in the environment and take the advantage of employee performance. Respect and helping employees in their personal problems, nurturing their competency, letting them to select choices for meeting their needs, giving training, informing and involving them in decision making and rewarding fairly helps to empower as well as increase their performance. Keywords: Psychological empowerment, Meaningful work, Competence, self-determination, Impact and employee Performance.
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