The Positive Relationship Between Authentic Leadership, Leader-Member Exchange, And Employees’ Psychological Capital

Authentic Leadership and its Attributes

Dsicuss about the Authentic Leadership In Foster Workplace Inclusion.

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Authentic leaders or positive leaders are highly capable of establishing collaborative and positive relationship with the employees. Positive leader member exchange relationship results in moral integrity and honesty within the employees (Leroy et al. 2015). Therefore, such employees can build strong emotional bonding with the goals and objectives of their organizations. In this way, such honest employees turn into highly committed employees towards meeting their organizational goals in most effective way. This study will highlight the positive association and relationship between authentic leadership, Leader-Member Exchange (LMX) and employees’ Psychological Capital. Furthermore, the literature review will also highlight the significance of Psychological Capital for enhancing the performance level of the employees. Apart from that, the study will review the literature critically for demonstrating the ways in which the leaders can build positive psychological capital among different employees such as professionals versus administrative employees, emotional labor, blue collar versus white collar employees, different generational cohort, and/or different ethnicities. On the other hand, the importance of emotion on the performance of employees will also be discussed in this literature review.

Authentic leadership is considered to be the most positive, genuine and ethical form of leadership. Authentic leaders are thought to be highly sensitive and moral to the employees through their behavior and thought process. Gill and Caza (2018) pointed out that authentic leaders constantly share important organizational information with the followers for engaging them in organizational decision making process. Moreover, the leaders always value the employees’ inputs through disclosing their motives, sentiments and personal values. In this way, the authentic leaders are mostly characterized for clarity behavior, openness and self-awareness. Furthermore, Hewlin, Dumas and Burnett (2017) opined that the attributes of the authentic leadership make it possible for the followers to assess the competence and morality of the authentic leaders accurately. In this way, such positive leaders maintain transparency and clarity in their actions and behaviors with their followers for building trusting relationship with them. Apart from that, high quality leader member relationship leads to effective intimacy and friendliness between the leaders and followers. Such friendly relationship and mutually beneficial relation between employees and leaders result in increased level of employee performance.

Authentic leaders are extremely capable of influencing and developing the followers through energizing their positive psychological state. It is highly beneficial for their enhanced performance level. As per Leroy et al. (2015), authentic leaders can effectively draw from their own psychological state and contribute in the psychological state of the employees for their increased performance. Psychological capital of the employees has been identified as the positive psychological resources that include the factors such as hope, resiliency, optimism and efficacy. On the other hand, Hirst et al. (2016) opined that authentic leaders consistently act and behave according to their actual value and endeavor to achieve openness and trustfulness in their relationship with followers. Moreover, such positive leaders always guide their followers through demonstrating transparency in organizational decision making and setting examples. They also guide the employees to be highly connected emotionally with their job role and cognitively vigilant in their job performance. Moreover, authentic leaders are highly concerned with generating moral standard among the employees, which keeps the employees honest with their organizations. They can maintain ethical standard, fairness and integrity in their job performance.

Psychological Capital and Employee Performance

Psychological capital is extremely important to moderate the performance level of the employees. Authentic leaders make positive association between the psychological capital and enhanced employee performance of an organization. Avey (2014) mentioned that authentic leaders remain rationally hopeful and trustworthy, which enhance the hopefulness of the employees through not only establishing willpower among them but also representing positive direction of pursuing a certain job. Hence, such leaders are highly capable of enhancing the sense of self-efficacy among the employees to perform certain job. Furthermore, Wang et al. (2014) opined that authentic leaders interpret exchange the core organizational information with the employees from positive perspective, which induce positive emotion among the employees. In this way, positive emotion turns into positive and optimistic perspective among the employees, which facilitates the employees to complete their jobs successfully. Precisely, the employees having high level of psychological capital remain highly hopeful, optimistic, resilient and confident in performing their jobs effectively. 

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Leader member exchange (LMX) represents the rational approach to establish the positive relation between the leaders and employees that actually enhance employee performance level. LMX has significant role to mediate the performance level of the employees. According to Little, Gooty and Williams (2016), leader member exchange relationship promotes the positive social exchange with the virtue of gaining respect from the employees and establishing credibility among them. The factors such as self-awareness, balanced processing, internalized moral standards and relational transparency form the core element of positive leader member exchange relationship. Authentic leaders always show respect to the employees through bringing out diverse opinions from them. In this way, such positive leaders can build trusting relationship with their followers. As per Day et al. (2014), authentic leaders always remain true to themselves as well as the employees and demonstrate moral integrity in their behaviors and actions. Such honesty and moral integrity of the leaders encourage the employees to cooperate with them towards enhancing their job performance.

Authentic leadership is positively connected with leader member exchange relationship, which is extremely important for leading high level of employee performance. Lyubovnikova et al. (2017) pointed out that low quality leader exchange relationship results in normal to standard task performance because of contractual exchange of relationship. Hence, the employees, who are having low level of psychological capital, are less driven through leader member exchange relationship. On the other hand, Michel and Tews (2016) stated that high quality leader exchange relationship always results in superior work performance on the part of the employees. Such high quality exchange relationship of between the leaders and followers moves from economic factor to social exchange relationship. The LMX relationship is exemplified through mutual trust, respect and obligation that foster the willpower among the employees to enhance their performance. Hence, authentic leaders are highly responsible for leading high quality LMX relation and enhancing employee productivity.

Leader-Member Exchange Relationship and Employee Performance

Leader member exchange leadership mediates the relationship between the leaders and employees. Such exchange relationship becomes the instrument to support and motivate the employees towards higher level of job performance. Litano et al. (2016) opined that the employees can gain several tangible and intangible benefits from LMX relations, which foster positive relation between LMX relationship and increased employee performance. The employees are more likely to receive positive feedback from the leaders and assistance to defend them from any form of negative impact through high quality leader member exchange relationship. Furthermore, Laschinger and Fida (2014) mentioned that the employees can get favorable assignments, encourage themselves to perform challenging jobs and protect themselves from any form of unfair activity having high level of exchange relationship with the leaders.  Hence, high level of LMX relationship leads to positive working condition in the workplace of an organization. The employees receive cooperation, support and motivation from the leaders through establishing positive LMX relationship. Hence, they become highly willing to enhance their performance level.

Psychological capital demonstrates the most important positive psychological resources, which foster motivational propensity within the employees towards accomplishing their jobs successfully. Buch et al. (2014) stated that psychological capital encourages the employees to be emotionally allied with their own job roles and their organizations. In this way, the employees get positive enthusiasm to achieve their specific job role effectively. Apart from that, Hinojosa et al. (2014) pointed out that positive psychological resources build trusts within the employees for their organizations and their leaders. Hence, the employees try to keep up positive outlook within them regarding organizational success. Furthermore, the employees having high level of positive psychological capital remain honest and ethical towards their organizations and job roles for leading organizational standards through their job performance. The employees are also encouraged to perform well for establishing positive leader member relationship. Furthermore, Gu, Tang and Jiang (2015) pointed out that positive psychological capital keeps the employees highly optimistic regarding their job performance to achieve high level of organizational success. In this way, such employees are best directed towards achieving organizational success.

LMX relationship and authentic leaders positively establish psychological capital among different types of employees. Professional employees mostly perform specialized jobs that require specific experience and skills rather than specialized intellectual instruction. Such employees require adequate level of freedom to carry out specific jobs and proper control over their jobs. He et al. (2017) pointed out that the authentic leaders must delegate some level of authority to the professional employees to develop psychological capital within them. Positive relation and delegation of authority from the leaders put up confidence within the professional employees. Hence, they can perform their jobs quite efficiently.

Authentic Leadership and Leader-Member Exchange Relationship

Administrative employees mostly deal with general business and management operation. Such employees frequently exercise independent judgment about the performance of intellectual jobs. Therefore, the leaders must be open and adaptive to the innovative ideas of executive employees, which will build trust and resilience within them to complete their job efficiently. Emotional labors always need to regulate their emotion all through their interaction with the customers, co-workers and superiors. Therefore, such types of employees require effective demonstration of role model and positive support that can help them to be optimistic to control their emotion in their interaction.

Blue collar employees typically perform labor jobs and generally work on manual job roles. Such employees are generally low skilled or even unskilled, who perform the jobs like maintenance, assembly line work and maintenance. According to Boekhorst (2015), the leaders must exchange core organizational information and provide positive support for fostering psychological capital among the blue collar employees. Exchange of information will enhance the engagement level of blue collar employees with the organization goals. In this way, they can enhance their willpower to achieve the organizational goals. Apart from that, positive support from the leaders enhances the optimism level of the employees to complete their jobs successfully. On the other hand, Avey (2014) mentioned that white collar employees are generally officially trained and highly skilled and they perform their job tasks within the office premises. Such types of employees usually require applying their intelligence level to perform their job roles properly. The leaders must delegate power and authority these types of employees for building trusting relationship with them. The trusting relationship will build self-efficacy within the white collar employees that will mobilize their cognitive resources to perform specific jobs.

The employees from different generational cohort usually hold different behaviors and characteristics. Such employees generally have different perspectives and attitudes on their job roles. Therefore, it is extremely challenging for the leaders to manage such different employees and maintain collaboration among them. According to Leroy et al. (2015), leaders must follow positive and authentic leadership behavior, where the leaders will respect and open to all the employees regardless of the generational background. The leaders should evenly value the innovative ideas and inputs from all the employees regardless of generational cohort. Moreover, the leaders must highly value the level of experience of the old generation employees to make organizational decision. It will enhance the self-efficacy and confidence level of the old employees to perform their job roles in effective manner. On the other hand, the leaders must also equally value the technical skills and advanced job skills of the young generation employees. Such openness and value can lead to resilience among the young employees, which will encourage them to foster organizational innovation. Such employees also require positive support from the leaders to build their confidence level in performing certain jobs efficiently.

Psychological Capital and Different Types of Employees

The employees having different ethnicities have different perspectives towards same types of jobs. Such employees can have different types of job attitudes for the same jobs in same organizational settings. Such employees are more likely to create cultural clashes with each other for their different job perspectives. In such extent, it is quite challenging for the organizational leaders make collaboration in the opinions of the employees having different ethnicities. The leaders must be adaptive and open to the new perspectives and opinions of the employees from different ethnicities. The equal value provided to these employees will lead to a feel of fair treat among the employees from different ethnicities. Apart from that, the leaders should also effectively exchange core organizational information will all the employees equally regardless of their ethnic backgrounds. It will build resilience and optimism among the employees having different ethnicities to perform their job roles in effective manner.

Emotion is highly significant among the managers, leaders and employees to improve the performance level of the employees significantly. Laschinger and Fida (2014) pointed out that strong emotional intelligence within the leaders facilitates them towards recognizing core strength and weakness of the employees. Therefore, the leaders can properly concentrate on utilizing the strong abilities of the employees and improving the weak abilities towards employee development. Strong emotional intelligence also builds high level of emotional bonding between the leaders and employees. In this way, they can better encourage the employees towards high level of performance. Furthermore, Gill and Caza (2018) mentioned that adequate emotional intelligence assists the managers to understand and involve with the employees properly to better directing them towards organizational success. Hence, the emotional managers are extremely efficient in enhancing the performance level of the employees. On the other hand, Little, Gooty and Williams (2016) stated that strong emotion inside the employees encourage them to build strong emotional bonding with the goals and objectives of their organizations. In this way, the employees can effectively align their efforts with the goals and objectives of their organizations to achieve them properly.

While concluding the study, it can be said that authentic leaders can build positive and highly genuine relationship with their followers. Such leaders are also effective in establishing high level of leader member exchange relationship with the employees. Authentic leaders are more likely to build positive leader member exchange relationship for fostering positive psychological capital inside the employees. The psychological capital namely hope, resiliency, optimism and self-efficacy/confidence are highly significant to enhance the employee performance level. Authentic leaders often exchange the core organizational information with their followers openly, which leads to optimism and hope among them to meet organizational goals and objectives.

Leader member exchange relationship promotes positive social exchange with the virtue of gaining respect from the employees and building credibility within them. It builds self-awareness and moral standard within the employees to achieve the goals and objectives of the organizations. Strong psychological capital makes the employees confident, efficient and honest towards their job roles. The leaders must be supportive and open enough to the blue collar employees to build confidence among them in performing their job roles effectively. On the other hand, the while collar employees should be provided with adequate level of authority to enhance their self-efficacy level for performing their job roles efficiently. Apart from that, the leaders should be concerned about providing equal values to the different ideas of the employees having different ethnicity and generational cohort.

Reference List

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