When is higher LMX comparison not always effective? The role of team-level LMX disparity and neuroticism

Abstract

ABSTRACT Treating relative leader-member exchange (i.e., RLMX) as the objective and leader-member exchange social comparison (i.e., LMXSC) as the subjective operation of LMX comparison (i.e., LMXC) within a team, we integrate the RLMX and LMXSC literature and examine when higher LMXC is not always effective in employees’ workplace outcomes (namely, self-efficacy, task performance, and creativity). Revisiting social comparison theory, we propose that LMXC has positive relationships with team members’ task performance and creativity via the role of self-efficacy. Furthermore, team-level LMX disparity and team members’ neuroticism affect the above direct and indirect relationships. Specifically, we hypothesize that amid low LMX disparity, members are more likely to perform assimilation rather than comparison that weakens the positive impacts of LMXC. Team members with high neuroticism are prone to make upward rather than downward social comparisons, which also mitigates the positive impacts of LMXC. We test our hypotheses in a field (using RLMX as the objective LMXC measure; n = 559, N = 71) and an experimental study (using LMXSC as the subjective LMXC measure; n = 176). Generally, we find support for our hypotheses. Our study thus deepens the understanding of the effectiveness of LMXC within team contexts.