The Role of Employee Engagement in the Effect of Leader-member Ex-change on Organizational Commitment: a Study From Indonesia

Abstract

Purpose – This paper aims to explore the effect of leader-member ex-change (LMX) on organizational commitment with employee engagement as a mediator in companies in Indonesia. Design/methodology/approach – This study used a sample of 170 employ-ees in Indonesia and analyzed the data using partial least square-structural equation modelling (PLS-SEM). Findings – The findings showed that LMX has a positive and significant direct effect on organizational commitment and employee engagement. Employee engagement also has a positive and significant direct effect on organizational commitment. Furthermore, employee engagement partially mediates the effect of LMX on organizational commitment. Limitations - First, the sample size is small, and the sample characteristics are skewed to one of the subcategories. Second, this study only employs quantitative methods to describe how LMX influences organizational com-mitment via employee engagement. Third, this study considers one of the elements that can influence the effect of LMX on organizational commit-ment, namely employee engagement. Practical implications – Leaders play a crucial role in shaping employee engagement and commitment to the organization. Therefore, leaders should value employees’ contributions to the organization and provide their employees with a supportive environment and mentoring. Moreover, this study will help organizations in designing their employee experience pro-gram. Originality/value – This study contributes to the body of knowledge by exploring how LMX, organizational commitment, and employee engage-ment are related in the Indonesian context and examining the mediating role of employee engagement on the effect of LMX on organizational com-mitment.