PSYCHOLOGICAL EMPOWERMENT AND COMMITMENT ORGANIZATIONAL COMMITMENTS: THEIR ON PERFORMANCE OF THE VILLAGE CREDIT INSTITUTION (LPD) IN BADUNG DISTRICT

This study examines the psychological empowerment and organizational commitment of Village Credit Institution officials and their effect on LPD performance. Psychological empowerment is seen from four cognitions, namely meaning, competence, self determination and impact, while organizational commitment includes affective, normative and continuous commitment. This study also examines the role of organizational commitment in mediating the influence of management psychological empowerment on LPD performance. The study was conducted at the LPD in the Badung regency, with a sample of 45 units and the respondents in each LPD were administrators consisting of a chairman, secretary and treasurer. Data analysis techniques used path analysis.

The results showed that psychological empowerment had a positive and significant effect on organizational commitment. Organizational commitment also has a positive and significant effect on LPD performance. Psychological empowerment has no significant effect on LPD performance, but on models that do not involve organizational commitment variables, psychological empowerment has a positive and significant effect on LPD performance. Organizational commitment is proven as a full mediated variable (full mediated) in the relationship of Psychological Empowerment and LPD Performance. These results indicate that the better psychological empowerment possessed by LPD management can strengthen their commitment to the organization (LPD), which in turn is able to encourage LPD performance to be better.

LPD as a business institution belonging to the Customary Village is important to be supported by a board that has high psychological empowerment, because it will strengthen its commitment to the organization, thus delivering LPD to achieve ever-increasing performance.