Research has shown that leader–member exchange differentiation affects individual and group outcomes. However, it is not yet clear how such unequal treatment affects the team’s perception of their leader in terms of leader-related outcomes, such as perceived leader communication quality, satisfaction with the leader, and perceived leader effectiveness. We analyzed how leader–member exchange differentiation in teams affects leader-related outcomes, and how it is affected by transformational leadership at the team level. Multilevel analyses of data from 92 teams with 831 employees indicated that leader–member exchange differentiation within teams is negatively related to leader-related outcomes, whereas transformational leadership is negatively related to leader–member exchange differentiation. In addition, we found positive indirect effects from transformational leadership to the leader-related outcomes via leader–member exchange differentiation.

Abstract. Due to the relevance of innovations for organizational success, we investigated the impact of (relative) leader–member exchange (LMX) on individual- and team-level perceptions of the climate for innovation (PCI) as well as whether the presence of an individual with a high LMX relationship who plays a mediating role for individuals with lower LMX relationships during team meetings (i.e., a broker) moderates the effects of LMX differentiation. We conducted multilevel analyses of self-assessment and video data from 286 employees in 45 innovation teams. The results confirm the positive effect of (relative) LMX (RLMX) on PCI. The negative effect of LMX differentiation on PCI is not present in teams with a broker. Finally, individuals with high RLMX play a more central role in meetings than those with low RLMX.