Leader–member exchange, shared values, and performance: Agreement and levels of analysis do matter

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Abstract

In this study, we first investigate the levels of analysis at which leader–member exchange (LMX) operates; second, we examine the nature of the LMX–performance relationship when a superior and a subordinate agree as compared to disagree concerning the quality of their exchange; third, we test the effect of superior–subordinate agreement about work values on the LMX–performance relationship; and fourth, we simultaneously consider the effects of LMX agreement–disagreement and values agreement–disagreement on the LMX–performance relationship. Our findings indicate that LMX operates primarily at the independent dyad level of analysis. We also found that LMX and performance are most strongly related and display the strongest dyadic-level effects when superior and subordinate assessments of LMX and values are in agreement.

Section snippets

Leader–member exchange theory

The earliest work on leader–member exchange (LMX) theory (see Graen & Uhl-Bien, 1995, for a review) contended that leaders develop differential relationships with their subordinates and categorize them as either cadres (in-group) or hired hands (out-group). The theoretical premise was that, in comparison to other leadership theories in which leaders treated all subordinates in the supervisory group in the same manner with an average leadership style (ALS), LMX was unique because it examined

Sample and subjects

The research setting for this study was a mid-sized media services provider located in a small metropolitan area in the Mid-Atlantic United States. Data were collected from 25 managers and their 110 subordinates. Subordinates were asked to participate in providing feedback about their relationship with their superior as part of a broader management development program. We emphasized that the subordinate feedback was critical to superiors' long-term comprehensive development within the

Descriptive statistics and raw correlations

Means, standard deviations, and coefficient alphas for each variable of interest are presented in Table 1. All measures were adequate for use in subsequent analyses. In Table 1 the raw score correlations, based on the total degrees of freedom in the sample, indicate a strong positive relationship (rtotal = .54) for perceived subordinate performance and leader–member exchange from the subordinate's perspective. From the superior's perspective, it was rtotal = .42. We also found a significant

LMX–performance relationship

Leader–member exchange relationships and the LMX–performance association can either be expressed as a within-groups model or a between-dyads model (see Dansereau, 1995, Graen and Uhl-Bien, 1995, Yammarino et al., 1997). As Schriesheim et al., 1998, Schriesheim et al., 1999 have indicated, tests of LMX under either of these conditions have been inadequate.

As a result, the purpose of this research was four-fold: first, to specify and empirically test the operational level(s) of analysis of LMX;

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