AN EMPIRICAL INVESTIGATION OF THE RELATIONSHIP BETWEEN QUALITY OF LEADER-MEMBER EXCHANGE AND SUBORDINATE PERFORMANCE AND SATISFACTION

This study reviews the literature on Leader-Member Exchange and identifies two important issues that are unresolved in that literature. The first is the hypothesized positive relationship between LMX and subordinate productivity. The second was the proposition that LMX is a multi-dimensional construct. A research design which addresses several problems in the existing literature on these issues was developed; specifically, a laboratory simulation where well controlled measurement of performance was possible. By hypothesizing a specific structure of correlations between the three dimensional model of LMX developed by Dienesch and Liden (1986) and three organizational performance measures it was possible to test dimensionality with the same simulation procedure.;The simulation was conducted using undergraduate students as followers and graduate students as leaders. No relationship between LMX and subordinate task performance emerged, but significant relationships between LMX quality and turnover and subordinate satisfaction were discovered. The hypothesized correlational structure between the Dienesch and Liden dimensions and the three measures of subordinate performance was not found, but a pattern of correlations which suggests some type of multidimensionality in the LMX relationship did emerge. The significance for LMX theory of these findings was discussed, particularly the possibility that LMX may be more closely related to long term performance factors that to short term task performance.