Leader–Member Exchange and Employee Performance in Nonprofit Organizations

Abstract

Nonprofit organizations are increasingly becoming more business-like in their approaches to leadership and management across the board. This has a number of effects, but perhaps one of the most important is that it has made business theories more applicable to the nonprofit sector. This is an opportunity to both expand on important business theory and provide insight into how nonprofits can improve leadership and management. Accordingly, the business leadership theory of leader–member exchange (LMX) was applied to the nonprofit context, specifically to human services nonprofits that serve people with disabilities. Through qualitative interviews and document collection, this study examined how LMX could be perceived to affect employee performance and how it could be perceived to affect leader–follower relationships. Three themes emerged for each of these questions: of loyalty, respect, and communication for the first and mutual respect and understanding, positive interactions, and communication for the second. These themes and their implications are discussed.