Leader–member exchange social comparisons and follower outcomes: The roles of felt obligation and psychological entitlement

Abstract

In the current study, we aimed to extend the understanding of how and when leader–member exchange social comparison (LMXSC) influences followers’ work behaviour. Based on social exchange theory, we argue that felt obligation to one's leader is a mediator of the relationship between LMXSC and follower outcomes. Further, we posit that the relationship between LMXSC and felt obligation will occur over and above overall LMX quality. We also investigate whether the effect of LMXSC is not consistent across employees but influenced by their level of psychological entitlement (PE). We found evidence that LMXSC was associated with followers’ organizational commitment in Study 1 (using data collected in two phases from 188 employees) and both organizational commitment and job performance in Study 2 (based on data collected in two phases from 300 employees and their 34 supervisors) via felt obligation towards the leader. In both studies, we found this relationship was significant while controlling for LMX quality, suggesting that perceptions of relative LMX standing are more influential than overall LMX quality. Moreover, high levels of PE reduced employees’ feelings of obligation to reciprocate positive treatment and the extent to which they exhibit higher levels of organizational commitment and job performance. Our findings show that individual differences play a significant role in determining the outcomes of exchange relationships. Practitioner points Followers do not evaluate their Leader–member exchange (LMX) relationship in isolation from their co‐workers, and social comparisons in this context have powerful effects on followers. If leaders want to motivate their followers, treating each follower in the same way and avoiding differentiation may be ineffective. Followers appear to be more willing to reciprocate when they perceive a better LMX relationship with the leader than their co‐workers’ LMX relationship with the leader. Managers should be cognizant that followers with varying levels of psychological entitlement may respond differently to LMX relationships. As such, managers could decide to invest more heavily in building strong relationships with followers low in psychological entitlement, as these followers are likely to respond more positively to favourable treatment by the leader. Managers should be aware that the norm of reciprocity might not apply to the same extent when employees are high in psychological entitlement; and thus, other influence tactics may be required to get the most out of these employees. Managers should set clear guidelines and expectations on followers early in the employment relationship. When entitled employees are made fully aware of the relationship expectations, they may be more prepared to meet them.

A Literature Review of Social and Economic Leader–Member Exchange

“…This indicates that narcissism is a particular type of trait making it likely to respond differently to economic LMX relationships than the normal pattern that is often observed. In a related vein, Lee et al (2019) found that, depending on followers' level of psychological entitlement, he or she would value reciprocity of social exchanges differently (Lee et al, 2019). Arguably, such findings indicate that depending on an individual's level of narcissism or other dark traits may make them respond differently or even positively to an economic LMX relationship as it may serve their expectations and worldview.…”

Cost of Serving Others: A Moderated Mediation Model of OCB, Ego Depletion, and Service Sabotage

“…We followed the recent studies (e.g., see Eissa and Lester, 2017 ; Hongbo et al, 2019 ; Lee et al, 2019 ) to conduct data analysis through SPSS PROCESS macro developed by Preacher et al (2007) . Our study developed formal mediation and moderated mediation (two-way interaction) hypotheses, so we performed a series of analyses described by Preacher et al (2007) .…”

The Role of Change in the Relationships Between Leader-Member Exchange/Coworker Exchange and Newcomer Performance: A Latent Growth Modeling Approach

“…Social exchange theory emphasizes that individual exchanges do not produce invariant reciprocity because individuals can vary in valuing the rule of reciprocity (Cropanzano and Mitchell, 2005;Love and Forret, 2008;Lee et al, 2019a). Whether or not a high-quality LMX promotes newcomer performance depends on the newcomers' perspective on this relationship and the value they place on the rule of reciprocity.…”

“…Scholars have increasingly adopted a SET ( Blau, 1964 ) lens to understand how interpersonal exchange relationships in work settings influence workplace behavior (e.g., Lee et al, 2019a ). SET is built on the principle of reciprocity ( Gouldner, 1960 ) and posits that individuals will feel compelled to reciprocate a positive exchange from another individual.…”

“…With increasing LMX quality, newcomers may feel increased trust and support from leaders, which should generate increased feelings of obligation to reciprocate. Such obligation could encourage them to put more effort into work and thus translate to high job performance levels ( Lee et al, 2019a ). In contrast, if LMX quality decreases, it will be accompanied by decreased performance levels over time.…”