Abstract
Research has shown that leader-member exchange (LMX) differentiation leads to specific patterns of LMX quality within a team. These patterns are typically assessed through multiple properties that have different consequences for individuals and teams. Although a more comprehensive and nuanced understanding of the consequences of LMX differentiation can be achieved by incorporating these properties in a single framework, studies of this nature have been scarce. Drawing on the social comparison perspective and distributive justice principles, this study proposes a multilevel model to examine the motivational mechanisms through which two distinct properties that arise from the LMX differentiation process — LMX variation and LMX relative position — simultaneously affect individual and team performance. We also examine the cross-level moderating effect of LMX variation. Using a multilevel, multisource, and multiwave research design, we collected data from 1098 healthcare professionals nested in 95 teams in 27 emergency care units and from more than 3000 patients to explore the effects of LMX differentiation on individual and team performance outcomes. The results revealed that, at the individual level, LMX relative position was positively associated with individual performance via employees’ psychological empowerment. At the team level, however, LMX variation showed a negative indirect effect on team performance via collective efficacy. Theoretical and practical implications of our findings for teams and organizations are discussed.
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Data Availability
Supporting data is not available due to commercial issues.
Notes
The conceptual notion of differentiation underlying the leadership making model of Graen and Uhl-Bien (1995) is exclusively grounded in work-related factors. The authors postulate that the “development of LMX is based on the characteristics of the working relationship as opposed to a personal or friendship relationship” (p. 237). Thus, in this study, we assume that the process of differentiation occurs on the basis of members’ meaningful work-related contributions.
Each team has one appointed leader who did not participate in the survey.
Although our sample comprises medium-sized groups, we have some motives to believe that social comparison based on LMX cut across all members. First, we sampled groups of healthcare professionals, which are, by nature, highly interdependent among themselves. Thus, it is necessary for each team member to engage in frequent interactions with others. Therefore, in their daily routines, they are likely to be constantly confronted with information of every teammate, in which they are based on to generate an overall image of the quality of the average others’ LMX relationships. Second, we found substantial evidence for the frog-pond effect in academic/educational settings. This body of research has demonstrated the accuracy of students’ perceptions of their relative academic standing in their class, where the number of students usually exceeds 20 students. Finally, LMX variable shows a within- and between-group variability of .37 and .08, respectively, which from a construct validation perspective is appropriate for the operationalization as a frog-pond variable (Chen et al., 2005).
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Acknowledgements
The authors gratefully acknowledge financial support from the Carlos Chagas Filho Foundation for Research Support of the State of Rio de Janeiro – FAPERJ, Research number E-26/201.395/2022 (272944) and the Brazilian National Research Council - CNPq, Research Grant number 307383/2022-9.
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Furtado, L., Sobral, F. What Works for Me Does Not Work for Us: Exploring the Relationships Between LMX Differentiation and Individual and Team Performance. J Bus Psychol 38, 1307–1324 (2023). https://doi.org/10.1007/s10869-023-09889-5
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DOI: https://doi.org/10.1007/s10869-023-09889-5