How Subordinates Evaluate and Respond to the Legitimacy of Leader-Member Exchange Differentiation

Abstract

Drawing on legitimacy framework and equity theory, this paper examines subordinates’ evaluating process of leader-member exchange differentiation (LMXD) legitimacy and their subsequent responses. Specifically, we use LMXD deservingness (i.e., subordinates’ perception that those who develop high-quality relationships with leaders make high contributions to their group) to capture subordinates’ legitimacy judgments of LMXD. And we propose that LMXD deservingness will mediate the relationships of LMXD with subordinates’ in-role performance and interpersonal helping. Furthermore, we expect that the cross-level effects of LMXD will be moderated by the characteristic of team context, that is, perceived team competition. Using surveys from 207 leaders and 1163 subordinates, we found support that LMXD deservingness mediated the effect of LMXD on subordinates’ in-role performance but not on subordinates’ interpersonal helping. In addition, LMXD’s direct impact on LMXD deservingness and indirect impact on subordinates’ in-role performance via LMXD deservingness were more negative when perceived team competition is high rather than low. Theoretical implications and future research directions are discussed.