I am happy and I am engaged! A mediation model work motivation in a state-owned construction enterprise

Abstract

This study examines the relationships among transformational leadership, employee happiness, work motivation, and employee engagement in Indonesian state-owned construction enterprises. Drawing on Job Demands–Resources (JD-R) theory, Self-Determination Theory (SDT), and Positive Psychology, the study seeks to explain how psychological resources contribute to employee engagement in project-based and high-pressure organizational environments. Data were collected from 406 employees working in five Indonesian state-owned construction enterprises and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal that transformational leadership has no significant direct effect on either work motivation or employee engagement. In contrast, employee happiness demonstrates a strong positive effect on both work motivation and employee engagement. Work motivation significantly predicts employee engagement and mediates the relationship between employee happiness and employee engagement. However, work motivation does not mediate the relationship between transformational leadership and employee engagement. These findings provide theoretical and empirical contributions by challenging the dominant leadership-centered perspective in employee engagement research. The results suggest that internal psychological resources may play a more important role than leadership behaviors in bureaucratic and project-oriented organizational contexts. Furthermore, the study establishes employee happiness as an antecedent of work motivation, which subsequently enhances employee engagement, thereby extending the integration of Positive Psychology, JD-R theory, and SDT in explaining employee engagement. Practically, the findings suggest that organizations should prioritize employee well-being and happiness initiatives as strategic mechanisms for strengthening motivation and sustaining employee engagement.