Boundaryless LMX: Examining LMX's Impact on External Career Outcomes and Alumni Goodwill

Abstract

Research has convincingly shown that leader–member exchange (LMX) is associated with a range of beneficial outcomes for employees within organizations. As employees increasingly pursue boundaryless careers that straddle multiple organizations, it is important to ask: Do advantages from LMX extend beyond the current organization and persist even after employees have left it? We propose that employees in higher quality LMX relationships with their managers benefit from stronger professional development, which can pay off in the form of better career outcomes on the external job market. Further, after leaving, whether or not ex‐employees (i.e., alumni) harbor goodwill toward their former organizations is likely to depend on their LMX quality prior to leaving. Alumni goodwill matters because organizations can potentially reap important strategic benefits from their alumni. Using time separated data including alumni interviews conducted by third‐party consultants, we find that, among employees who quit, pre‐turnover LMX is positively related to higher salaries and greater responsibility in their next jobs and is also positively related to alumni goodwill. Moreover, the strength of the LMX–alumni goodwill relationship depends on whether managers made robust retention efforts after employees communicated their decisions to quit.