Leader-Member Exchange (LMX):
Level of Negotiating Latitude and Job Satisfaction
Abstract
The first studies of Leader-member exchange (LMX) were done using a unidimensional approach. Some thirty years later, the approach has evolved. We now view these relationships with a multidimensional approach. The results of this research identify which of four domains of LMX have higher relations with what is measured. In this case, we measure the satisfaction of employees in their job. By using this approach, the author gathered data from 68 bank tellers and identified which domains have a higher correlation with job satisfaction.
The Leader-member exchange (LMX) theory conceptualizes leadership as a process that is centered in the interaction between leaders and followers. According to Yukl (1998), LMX describes how a leader and an individual subordinate develop a relationship as they influence each other and negotiate the subordinate’s role in the organization. As the relationship develops, the latitude given to the subordinate by the supervisor can increase. This latitude, which makes the exchange greater is linked to empowerment. Sparrowe (1994) found a significant association between LMX and member perceptions of the degree of empowerment. As a consequence, LMX is positively associated with favorable attitudes such as job satisfaction. This research is about the link that exists between LMX and job satisfaction through the degree of latitude given to the employee by the supervisor.
Statement of the problem
The proposed study will address the following problem: How does the quality in the Leader-member exchange influence the member towards job satisfaction? Specific research questions within this problem are as follows:
1. What is the effect of empowerment (through LMX) on subordinate job satisfaction?
2. Based on the LMX theory, what is the proper mix of relational characteristics to promote better satisfied followers?
According to LMX theory, the nature of differences in leader-member relationships is the “negotiating latitude” that the leader allows the member (Graen & Scandura, 1987). Negotiating latitude is based on (a) the leader’s willingness to allow changes in the member’s job and (b) regardless of the leader’s formal authority, his or her inclination to use position power to help the member solve work-related problems (Dansereau et al., 1975). Several studies have suggested that the negotiating latitude of the member is positively related to the member’s satisfaction with the leader (Dansereau et al., 1975; Scandura & Graen, 1984).
Definition of terms
During the course of this research, special terms are employed. In order to have a better understanding of these terms, some definitions are provided.
Leader-member exchange:
Leader-member exchange (LMX) theory, describes the role making process between a leader and an individual subordinate. In addition, the theory describes how leaders develop different exchange relationships over time with various subordinates. LMX theory was formerly called the vertical dyad linkage theory because of its focus on reciprocal influence processes within vertical dyads composed of one person who has direct authority over another person. (Dansereau, Graen, & Haga, 1975: 47; Graen & Cashman, 1975: 143).
Latitude:
Authority granted to a member implies control of the latitude for its use. Superiors must decide on the amount of latitude to grant to various members on specific tasks. Some members may be required to gain approval at short intervals whereas others may be allowed to proceed for long periods without reporting. Furthermore, even complex tasks can be rendered trivial by overly specific instructions and short reporting periods with low latitude. Latitude represents a potentially rich area of the discovery of position resources.
Job satisfaction:
Job satisfaction is an attitude that individuals maintain about their jobs. This attitude is developed from their perceptions of their jobs. A major goal of studying job satisfaction is to better understand the complexities of these variables and their impact on job satisfaction. Such an investigation may enable managers to understand how employees form the attitudes that affect their job satisfaction. There is a suggestion that five essential dimensions help to measure job satisfaction: the job itself, pay, promotion opportunities, supervision, and co-workers (Pool, 1997).
Affect:
The mutual affection members of the dyad have for each other based primarily on interpersonal attraction, rather than work or professional values. Such affection may be manifested in the desire for and/or occurrence of a relationship which has personally rewarding components and outcomes (e.g., a friendship).
Loyalty:
The expression of public support for the goals and the personal character of the other member of the LMX dyad. Loyalty involves a faithfulness to the individual that is generally consistent from situation to situation.
Contribution:
Perception of the current level of work-oriented activity each member puts forth toward the mutual goals (explicit or implicit) of the dyad. Important in the evaluation of work-oriented activity is the extent to which the subordinate member of the dyad handles responsibility and completes tasks that extend beyond the job description and/or employment contract: and likewise, the extent to which the supervisor provides resources and opportunities for such activity.
Professional Respect:
Perception of the degree to which each member of the dyad has built a reputation, within and/or outside the organization, of excelling at his or her line of work. This perception may be based on historical data concerning the person, such as: personal experience with the individual: comments made about the person from individual within or outside the organization; and awards or other professional recognition achieved by the person. Thus it is possible, though not required, to have developed a perception of professional respect before working with or even meeting the person.
Affect, Loyalty, Contribution, and Professional Respect (Liden, Maslyn, 1998: 45)
Intrinsic
Belonging to the real nature of a thing; not dependent on external circumstances; essential; inherent. (Webster’s) Type of work, achievement, ability utilization. (Weiss, 1967: 4)
Extrinsic
Not really belonging to the thing with which it is connected; not inherent (Webster’s) Environmental factors like working conditions, supervision, co-workers, company. (Weiss, 1967: 4)
REVIEW OF LITERATURE
Early studies
Research exploring the leader-member exchange (LMX) model of leadership suggests that leaders may develop very different relationships with different members of the same work unit (Dansereau, Graen, & Haga, 1975; Graen & Cashman, 1975). LMX theory was first described 25 years ago in the works of Dansereau, Graen, and Haga (1975), Graen and Cashman (1975), and Graen (1976). Since it first appeared it has undergone several revisions, and it continues to be of interest to researchers who study the leadership process (Yukl 1998).
According to Liden, Sparrowe, & Wayne (1997), the LMX model is grounded in role theory (Kahn, Wolfe, Quinn, Snoek, & Rosenthal, 1964), which suggests that organizational members accomplish their work through roles or sets of behaviors that are expected of position holders. Focusing on how roles develop, Graen (1976) suggested that roles are not solely determined by written job descriptions or other formal documents. Rather, he contends that members’ roles develop through informal processes, referred to as role-making process.
Research into Leader-Member Exchange (LMX) theory has been gaining momentum in recent years, with a multitude of studies investigating many aspects of LMX in organizations (Graen, Uhl-Bien, 1995; Liden, Sparrowe, Wayne, 1997). LMX, which is associated with Vertical Dyad Linkage (VDL) has been refocused because the structures in organizations are changing. Structures are no longer relying exclusively on hierarchy to report the exchange between a leader and a follower.
According to Northouse (1997: 110), prior to LMX theory, researchers treated leadership as something leaders did toward all of their followers. This assumption implied that leaders treated followers in a collective way, as a group, using an average leadership style. The LMX theory challenged this assumption and directed researchers’ attention to the differences that might exist between the leader and each of her or his followers.
In the first studies of exchange theory, which was then called vertical dyad linkage (VDL) theory, researchers focused on the nature of the vertical linkages leaders formed with each of their followers. A leader’s relationship to the work unit as a whole was viewed as a series of vertical dyads. In assessing the characteristics of these vertical dyads, researchers found two general types of linkages (or relationships): those that were based on expanded and negotiated role responsibilities (extra-roles), which were called the in-group, and a second set that were based on the formal employment contract (defined roles), which were called the out-group.
Subordinates in the in-group receive more information, influence, confidence, and concern from their leaders than do out-group subordinates. In addition, they are more dependable, more highly involved, and more communicative than out-group subordinates. Whereas in-group members do extra things for the leader and the leader does the same for them, subordinates in the out-group are less compatible with the leader and usually just come to work, do their job, and go home. What began as an alternative to average leadership style (Dansereau et al., 1975) has progressed to a prescription for generating more effective leadership through the development and maintenance of mature leadership relationships (Graen & Uhl-Bien, 1991).
According to Graen, Novak & Sommerkamp (1982), research on role-making in leader-member dyads has indicated a consistent pattern characterized by distinct leader-member exchanges. In exchange for positional resources (e.g., privileged information, challenging projects), the member commits himself/herself to higher degrees of involvement in the unit’s functioning, including greater time and energy expenditures than required by the formal contract, acceptance of greater responsibility, and a vested interest in the success of unit functioning (Dansereau et al., 1975; Graen, 1976; Liden & Graen, 1980).
According to Graen & Uhl-Bien (1995), despite many years of leadership research and thousands of studies, we still do not have a clear understanding of what leadership is and how it can be achieved. In particular, there appear to be many theories that address different aspects of leadership but little cohesion among the theories that help us understand how they all tie together. They argue that leadership involves three domains which are leaders, followers and the relationship. This is why it is hard to identify different leadership styles and we should try to understand leadership from the perspective of those three domains. This brings the concept of LMX because it links these domains instead of thinking that leadership is only linked to the leader.
Strengths of LMX
Leader-Member Exchange offers a more focused solution to a broad leadership style theory. Leadership style theories have been studied since1939 when Lewin, Lippitt, and White were the first to identify three leadership styles that continue to be important: the autocratic style where the leader defines goals, gives orders and changes the group’s course of action as the leader sees fit without much consultation with group members; the democratic style, which seems to have taken on the less politicized name facilitative style over the years, appears to have become the prototype for participative management; the laissez-faire style is closer to non-leadership than anything else. The leader tends to relinquish most forms of control, which has the effect of giving group members maximum discretion over their own work, but at the expense of no support from management. In 1985, Bass developed a theory of transformational leadership, distinguishing between transformational and transactional leadership styles.
LMX theory makes several positive contributions to our understanding of the leadership process. According to Northouse (1997: 116), there are four strengths to the leader-member exchange theory:
First, it is a strong descriptive theory. Intuitively it makes sense to describe work units in terms of those who contribute more and those who contribute less or the bare minimum to the organization. Second, LMX theory is unique because it is the only leadership approach that makes the concept of the dyadic relationship the centerpiece of the leadership process. Third, LMX theory is noteworthy because it directs our attention to the importance of communication in leadership. Fourth, there is a large body of research that substantiates how the practice lo LMX theory is related to positive organizational outcomes. In a review of this research, Graen and Uhl-Bien (1995) point out that it is related to performance, organizational commitment, job climate, innovation, organizational citizenship behavior, empowerment, procedural and distributive justice, career progress, and many other important organizational variables.
Criticisms
McClane, (1991) argues that role differentiation and satisfaction are correlated. Greater role differentiation would have higher average satisfaction with the leader, group and co-workers than groups without such role differentiation. This means that in-groups should receive more praise and more attention than out-groups. The LMX theory would then be going against what we are being taught and that is to not form groups or cliques that would discriminate against certain persons.
According to Northouse (1997), a second criticism of LMX theory is that the basic ideas of the theory are not fully developed. For example, it fails to explain fully the way high-quality leader-member exchanges are created. In the early studies it was implied that they were formed because a leader found certain subordinates more compatible in regard to personality, interpersonal skills, or job competencies, but these studies never described the relative importance of these factors or how this process worked (Yukl, 1994).
A third criticism comes from Liden, Wayne & Stilwell (1993: 662) who say that:
One important gap in LMX research is the lack of understanding of the LMX developmental process (Dienesch & Liden, 1986). Only a few studies have focused on the LMX developmental process (Dansereau et al., 1975; ). In essence, the leader and subordinate behaviors involved in the development of LMXs have not been empirically delineated (House & Baetz, 1979; Jablin, 1987).
Another criticism of LMX is described in Dienesch and Liden’s (1986: 623) research on LMX Model of Leadership: A Critique and Further Development in which they say:
A survey of the literature reveals that leader-member exchange has been operationalized in a number of diferent ways. LMX has been measured with 2-item (e.g., Dansereau et al., 1975), 4-item (e.g., Graen & Schiemann, 1978; Liden & Graen, 1980), 5-item (e.g., Graen, Liden & Hoel, 1982) 7-item (Graen, Novak, & Sommerkamp, 1982; Seers & Graen, 1984), 10-item (Ridolphi & Seers, 1984), and 12-item (Wakabayashi & Graen, 1984) scales. None of these scales is based on either systematic psychometric study or explicit construct validation. In addition, in several studies (e.g., Dansereau et al., 1975; Liden & Graen, 1980) some of the dependent measures appear to be alternative measure of LMX rather than true dependent variables. For example, leadership attention, personal sensitivity, work sensitivity and support were treated as dependent variables when they appear to be highly related to the items used to measure LMX. This may explain why items used previously as dependent measures appeared to serve better in later studies as additional measures of LMX (Ridolphi & Seers, 1984; Seers & Graen, 1984; Wakabayashi & Graen, 1984). Given these problems, there is clearly a need to develop and validate a standardized, psychometrically sound measure of LMX to be used in future research.
The most recent criticism is about the unidimensional measure scale from Graen & Uhl-Bien and their different scale versions to measure LMX. Coleman (1998: 146) goes on to say that:
The suggestion that one 7-item scale can capture all of these transactions, although perhaps plausible, raises questions for me as it did for Dienesch and Liden (1986). I believe that it is time to be more specific about the exchanges that may occur between leaders and followers at different levels. The idea here would be to develop new measures for exchange at different levels and then test whether the hypothesized levels apply. I suspect that Graen and Uhl-Bien seem to believe they have already accomplished this with just one scale. I disagree.
This argument has also found interest from Liden & Maslyn (1998). They developed a multidimensional scale called LMX-MDM. This scale is used to measure LMX from four different dimensions which are affect, loyalty, contribution and professional respect. In 1986, Dienesch & Liden had identified three dimensions which were: perceived contribution, loyalty and affect. Further discussions of this development can be found in the following section.
Multidimensionality of LMX
Leader-member exchange theory suggests that leaders do not use the same style in dealing with all subordinates, but rather develop a different type of relationship or exchange with each subordinate. Much research suggest that LMX is unidimensional (Graen & Cashman, 1975; Graen & Uhl-Bien, 1995). Others say that it is multidimensional (Liden & Maslyn, 1998; Sparrowe & Liden, 1997; Dienesch & Liden, 1986). Liden & Maslyn (1998: 44) suggest that :
Role theory, which has provided the theoretical foundation for LMX research (e.g., Graen, 1976) stresses that roles are multidimensional (Katz & Kahn, 1978; Jacobs, 1971). For example, some subordinates may focus on their tasks, while neglecting social interaction, some may stress social interaction and not tasks, and others may be weak or strong on both dimensions (Bales, 1958). Leaders’ roles are also comprised of multiple factors, including such activities as supervision, allocating resources, and serving as a liaison (Kim & Yukl, 1995; Tsui, 1984).
From the literature of Brass & Burkhardt (1992), Krackhardt (1990) and Sparrowe, Liden & Wayne (1997), there is a suggestion that exchange relationships between individuals appear to be multidimensional. Thus, both roles and exchanges between role occupants appear to be characterized by multiple dimensions (Liden & Maslyn, 1998). Dienesch and Liden (1986: 625) suggest that LMXs may be based on varying amounts of three currencies of exchange. Task related behaviors (labeled contribution), loyalty to each other (labeled loyalty), and simply liking one another (labeled affect). These authors proposed that an exchange might be based on one, two, or all three of these dimensions.
These three dimensions act as “currencies of exchange” which both parties in an LMX can bring to the relationship. These dimensions are not the only one that could be hypothesized (cf., Gergen, Greenberg, & Willis, 1980). However, these are grounded in an established concept (mutuality) and invoke constructs (i.e., loyalty and affect) that have been extensively researched. Therefore, these dimensions provide a good starting point for empirical research on the dimensionality issue.
1. In most LMX relationships the factors should be mutually reinforcing through an ongoing reciprocal process. For example, a subordinate who shows strong loyalty is likely to be rewarded with task opportunities which allow him or her, in turn, to make a greater contribution to the relationship. Furthermore, subordinates who are seen as good performers are generally better liked by their superiors (Wortman & Lisenmeier, 1977), thereby, elevating the affect dimension of the relationship.
2. Since the LMX does involve an evaluative/attribution step, a halo effect (see Cooper, 1981, for a comprehensive review) can be expected to increase the correlation between the dimensions.
3. In some leader-subordinate dyads, the dimensions could act in a compensatory fashion. As one example, low contribution to a relationship may be offset by a very high degree of loyalty (the classic “yes-man” so often portrayed in fiction about organizations) The above points are speculative; the amount and type of interaction between the dimensions in an important topic for future research.
Liden & Maslyn (1998) developed a new scale for measuring leader-member exchange. The scale is called LMX-MDM. It has twelve questions to be answered on a Likert like scale. There are four categories comprising each three questions. These categories are: Affect, Loyalty, Contribution and Professional Respect. The difference with the unidimensional scale is that there are now four dimensions to compare the variables with, whether they be job satisfaction, turnover, or any other variable to be compared with. This allows the researcher to go another step in analyzing LMX because each category can then better explain the findings. Table 2 shows the questionnaire, as formulated and validated by Liden & Maslyn (1998)
METHODS
Subjects and Procedure
Fifteen banks were approached to participate in the collection of data for the study. All members filled out two different kinds of questionnaires. The first is the LMX which concerns their relationship with their leader and a second questionnaire is in regards to their satisfaction with work as prescribed by the Minnesota Satisfaction Questionnaire.
In all, there were 68 participants. The two questionnaires were given to the managers who agreed to give them to the employees on their next staff meetings. The confidentiality in collecting the data was assured.
Measures
Negotiating latitude were assessed from the questionnaire LMX-MDM taken from Liden and Maslyn (1998). This is the most recent and most elaborate questionnaire regarding LMX because it is multidimensional. This questionnaire had twelve items that divided into 4 dimensions. It is used with a Likert-type scale that runs from 1 (Strongly disagree) to 7 (Strongly agree).
The Minnesota satisfaction questionnaire (short version) revised in 1985 has 20 questions which are also answered on a Likert-type scale that runs from very dissatisfied to very satisfied. These data were then changed into numbers so that analyses could be done.
Instruments
LMX-MDM questionnaire
The Liden & Maslyn (1998) LMX-MDM questionnaire will be used to measure subordinate-perceived LMX in this investigation. This instrument (LMX-MDM) is based upon the multidimensional approach to measuring LMX unlike the LMX7 scale presented in Scandara and Graen (1984: 430) and developed by Graen, Novak, and Somemerkamp (1982) which is more unidimensional. Since the LMX-MDM is fairly new, there is no reference to compare the correlation between this scale and job satisfaction. This research will bring progress into the theory of LMX.
Reliability (LMX-MDM)
Internal consistency reliabilities were acceptable for the affect, loyalty, and professional respect scales but low for the contribution scale. Coefficient alphas were .90, .78, .60 and .92 respectively, for affect, loyalty, contribution and professional respect in one group and .90, .74, .57, and .89 respectively in a second group. (Liden & Maslyn, 1998)
Validity (LMX-MDM)
Validity of the LMX-MDM may be derived from support for the 4-factor model using exploratory factor analysis and confirmation using CFA with independent samples (Bagozzi, Yi, & Phillips, 1991; Rahim & Magner, 1995). However, consistent with Schmitt and Klimoski’s (1991) argument that validity is best assessed using multiple approaches, we examined our scale with respect to response bias susceptibility, convergent validity, discriminant validity, and criterion-related validity. (Liden & Maslyn, 1998)
Minnesota Satisfaction Questionnaire
The second instrument is the Minnesota Satisfaction Questionnaire (1967, 1985). According to Weiss et al. (1967):
The questionnaire (in two forms, long and short) measures satisfaction with several specific aspects of work and work environments. This questionnaire (the MSQ) makes it feasible to obtain a more individualized picture of worker satisfaction than was possible using gross or more general measures of satisfaction with the job as a whole. This individualized measurement is useful because two individuals may express the same amount of general satisfaction with their work but for entirely different reasons.
Reliability (MSQ)
The questionnaire is divided into two aspects: intrinsic and extrinsic. For the intrinsic satisfaction scale, the coefficients ranged from .84 for one group to .91 for another. For the extrinsic satisfaction scale, the coefficients varied from .77 for one group to .82 for another. On the general satisfaction scale, the coefficients varied from .87 for one group to .92 for the other. Median reliability coefficients were .86 for intrinsic satisfaction, .80 for extrinsic satisfaction and .90 for general satisfaction. (Weiss et al., 1967)
Validity (MSQ)
Since the short-form MSQ is based on a subset of the long-form items, validity for the short-form may in part be inferred from validity for the long-form. Evidence for the validity of the MSQ is derived mainly from its performing according to theoretical expectations. This type of validity is called construct validity. Much of the evidence supporting construct validity for the MSQ is derived indirectly from construct validation studies of the Minnesota Importance Questionnaire (MIQ), based on the Theory of Work Adjustment. In one set of studies, the seperate scales of the MSQ were the dependent variables to be predicted from the relationship between vocational needs (measured by the MIQ) and (estimated) levels of occupational reinforcement.
Analyses of the data yielded good evidence of construct validity for the Ability Utilization, Advancement and Variety scales of the MIQ and therefore indirectly for the same scales of the MSQ. (Weiss et al., 1967)
Scoring for the MSQ
Response choices for the MSQ are weighted in the following manner:
Response Choice Scoring weight
Very Dissatisfied (VDS) ..................................... 1
Dissatisfied (DS) ................................................. 2
Neither (N) .......................................................... 3
Satisfied (S) ........................................................ 4
Very Satisfied (VS) ............................................ 5
Responses are scored 1 through 5 proceeding from left to right in the answer spaces. Scale scores are determined by summing the weights for the responses chosen for the items in each scale. Scoring the MSQ can include Intrinsic, Extrinsic and General Satisfaction scales.
The three scales of the short-form MSQ consist of the following items:
Scale Items
Intrinsic .......................... 1 2 3 4 7 8 9 10 11 15 16 20
Extrinsic ......................... 5 6 12 13 14 19
General Satisfaction ....... 1 through 20
Source: Weiss et al., 1967
Variables
At its simplest form, there are two variables that will be used to test the hypotheses. The first, the predictor variable, is the LMX-MDM which will establish the degree of latitude the subordinate gets from the supervisor. The second variable, the criterion variable, will be the Job satisfaction, measured by the Minnesota Satisfaction Questionnaire. According to the literature from Schriesheim, Neider and Scandura (1998), there is a high correlation between empowerment, productivity and job satisfaction. The higher the degree of LMX, the higher will be the degree of satisfaction of subordinates. This brings in the first hypothesis.
Ho1 There is a positive correlation between latitude of subordinates, as measured by LMX and Job Satisfaction.
There are other variables which can explain the satisfaction results. Since LMX in this research is of multi domains, there are now four variations explaining the concept. LMX as a whole comprises four different factors which are affect, loyalty, contribution, and professional respect. Since any combination of these factors can be different for each individual who fills out the questionnaire, different specific factors can influence the results of LMX and therefore have an influence on Job satisfaction results. This is why it is important to verify the results of LMX versus Job satisfaction through all factors (variables).
Ho2 There is a positive correlation between Affect and Job Satisfaction.
Ho3 There is a positive correlation between Loyalty and Job Satisfaction.
Ho4 There is a positive correlation between Contribution and Job Satisfaction.
Ho5 There is a positive correlation between Professional respect and Job Satisfaction.
In order to better explain what is a positive correlation, the following figure explains, not only what is a positive correlation but how to interpret between a low, a moderate and a high correlation.
FIGURE 1
Relationship of strength and direction of correlations
____________________________________________________________________________
-.5 +.5
Coefficient of correlation -1 ____________________ 0 ____________________ +1
Strength of relationship: high moderate low low moderate high
Direction: negative positive
____________________________________________________________________________
Source: McMillan, J.H., Schumacher, S. (1997) p.226
According to McMillan & Schumacher (1997),
the typical convention is to calculate a number to represent the relationship, called a correlation coefficient. The interpretation of the number used is basically the same. The number that represents the correlation can range from -1.00 to +1.00. A high positive value (for example, .85, .90, .96) represents a high positive relationship; a low positive value (for example, .15, .20, .08) a low positive relationship; a moderate negative value (for example, -.40, -.37, -.52) a moderate negative relationship, a value of 0 no relationship, and so on. Thus, the strength of the relationship becomes higher as the correlation approaches either +1 or -1 from zero.
Limitations of the study
The use of the LMX-MDM scale to measure the leader-member exchange is fairly new. It has not been applied across many organizations. Findings from the use of the scale have yet to be published. Therefore, embarking into LMX-MDM will add a new dimension into the concept of leader-member exchange.
The number of participants is also limited (68). The research is done only in a bank environment. This study will not be expected to be representative of all organizations, even of other banks. It is however a start, a sample of what could be a better understanding of how organizations work and how to improve them.
Research findings
This project will contribute to the advancement of research in the field of leader-member exchange because it is taking a new approach to gathering information. Leader-member exchange findings in a multidimensional approach if fairly new. The new validated questionnaire LMX-MDM (Liden & Maslyn, 1998) will bring a new understanding into how the relationship between leaders and members affects the behavior of members (i.e. satisfaction).
Previous research into LMX and job satisfaction has been done with a uni dimension approach. Since a new questionnaire has been developed, the LMX-MDM, new findings can be observed from the four dimensions of LMX.
Coleman (1998) thinks that greater progress could be made by trying to delineate variables (other than LMX) that capture effects at different combinations of finite sets of levels. As Linden and Maslyn (1998) say, the value of identifying multiple dimensions of LMX lies in understanding when and how these dimensions relate to issues of development and maintenance of LMX relationships and their differential impact in prediction of organizational outcomes.
The findings of this research will help, not only advancement in the field of LMX but will also help the participating organizations in focusing future training for its managers. We hope that the findings help outline the factors that influence the best relationships and those who provide better job satisfaction among members.
Ethical Assurances
The approach used to gather the data considered confidentiality of the subjects by using the following procedure. Each of the fifteen banks approached received a number of questionnaires appropriate to the number of employees that would participate. The managers accepted the questionnaires on behalf of the employees who in turn got the questionnaires following a staff meeting in which the purpose of the study was explained by the managers and an assurance of confidentiality was given (see appendix). All return envelops, stamps, addresses and questionnaires were the same. There were no numbers on the questionnaires nor the envelops to identify the participants. As the responses entered, questionnaires were identified with a number from 1 to 68, which is the total number of questionnaires returned. At the end, a copy of the overall results was returned so that the participants could see the results and know that they had participated in a study that was compiled.
FINDINGS
Overview
The proposed study was to address the following problem: How does the quality in the Leader-member exchange influence the member towards job satisfaction? Specific research questions within this problem are as follows:
What is the effect of empowerment (through LMX) on subordinate job satisfaction?
Based on the LMX theory, what is the proper mix of relational characteristics to promote better satisfied followers?
To better understand the how to approach this questioning, two questionnaires were given
to 102 bank tellers. There were 68 questionnaires returned for a return rate of 67%. This high return rate was probably due to the insistence of the importance of the study by the bank managers. It took three weeks for all questionnaires to come back. The findings in this section come from these 68 returned questionnaires.
Data section
Descriptive analysis
In this section, tables are presented to identify the results of the findings. Table 1 shows the instrument for finding the degree of latitude given by the supervisor to the subordinate. There are twelve questions. Of those questions, there are four sections comprising each three questions. These sections, or dimensions, are Affect (Q1,Q2,Q3), Loyalty (Q4,Q5,Q6), Contribution (Q7,Q8,Q9) and Professional respect (Q10, Q11, Q12).
TABLE 1
Measures of LMX-MDM from Liden and Maslyn (1998)
______________________________________________________________________________
Strongly Disagree Strongly Agree Mean
1. I like my supervisor very much as a person........ 1 2 3 4 5 6 7 5.51
2. My supervisor is the kind of person one would
like to have as a friend......................................... 1 2 3 4 5 6 7 5.16
3. My supervisor is a lot of fun to work with.......... 1 2 3 4 5 6 7 4.74
4. My supervisor defends my work actions to a
superior, even without complete knowledge
of the issue in question........................................ 1 2 3 4 5 6 7 4.21
5. My supervisor would come to my defense if
I were “attacked” by others................................. 1 2 3 4 5 6 7 4.62
6. My supervisor would defend me to others in
the organization if I made an honest mistake...... 1 2 3 4 5 6 7 5.16
7. I do work for my supervisor that goes beyond
what is specified in my job descriptions............. 1 2 3 4 5 6 7 5.46
8. I am willing to apply extra efforts, beyond
those normally required, to meet my
supervisor’s work goals....................................... 1 2 3 4 5 6 7 5.97
9. I do not mind working my hardest for my
supervisor............................................................ 1 2 3 4 5 6 7 5.91
10. I am impressed with my supervisor’s
knowledge of his/her job..................................... 1 2 3 4 5 6 7 5.31
11. I respect my supervisor’s knowledge of and
competence on the job......................................... 1 2 3 4 5 6 7 5.44
12. I admire my supervisor’s professional skills....... 1 2 3 4 5 6 7 5.17
_______________________________________________________________________________
The second questionnaire can be found in Table 2. There are 20 questions that permit to verify the satisfaction of employees. The result of all the questions express the general satisfaction of employees. Twelve of these questions combined reflect the Intrinsic portion of satisfaction and six of them explain the extrinsic satisfaction.
TABLE 2
Measures of job satisfaction (Minnesota University scales - 1967) (short-form)
____________________________________________________________________________
On my present job, this is how I feel about:
VDS DS N S VS Mean
1. Being able to keep busy all the time .................... 1 2 3 4 5 4.38
2. The chance to work alone on the job ..................... 1 2 3 4 5 4.26
3. The chance to do different things from time to time 1 2 3 4 5 4.18
4. The chance to be “somebody” in the community ... 1 2 3 4 5 3.91
5. The way my boss handles his subordinates ............ 1 2 3 4 5 3.50
6. The competence of my supervisor in making
decisions ................................................................. 1 2 3 4 5 3.82
7. Being able to do things that don’t go against my
conscience .............................................................. 1 2 3 4 5 4.13
8. The way my job provides for steady employment... 1 2 3 4 5 3.96
9. The chance to do things for other people ................ 1 2 3 4 5 4.44
10. The chance to tell people what to do ...................... 1 2 3 4 5 3.63
11. The chance to do something that makes use of my
abilities .................................................................... 1 2 3 4 5 4.08
12. The way company policies are put into practice ..... 1 2 3 4 5 3.41
13. My pay and the amount of work I do ...................... 1 2 3 4 5 3.22
14. The chances for advancement on this job ............... 1 2 3 4 5 3.10
15. The freedom to use my own judgment ................... 1 2 3 4 5 3.88
16. The chance to try my own methods of doing the job. 1 2 3 4 5 3.71
17. The working conditions ............................................. 1 2 3 4 5 4.03
18. The way my co-workers get along with each other .. 1 2 3 4 5 3.87
19. The praise I get for doing a good job ........................ 1 2 3 4 5 3.49
20. The feeling of accomplishment I get from the job ... 1 2 3 4 5 3.78
____________________________________________________________________________
VDS: means I am very dissatisfied with this aspect of my job
DS: means I am dissatisfied with this aspect of my job
N: means I can’t decide whether I am satisfied or not with this aspect of my job
S: means I am satisfied with this aspect of my job
VS: means I am very satisfied with this aspect of my job
Scales building
There are two questionnaires used in this research. The first is the Leader-Member exchange (multidimensional from Liden & Maslyn, 1998) which has 12 questions. The questionnaire uses a Likert-like scale that ranges from 1 to 7. There are also 4 sections in the questionnaire which reflect four dimensions of LMX. These four dimensions are Affect (Q1, Q2, Q3), Loyalty (Q4, Q5,Q6), Contribution (Q7, Q8, Q9), and Professional respect (Q10, Q11, Q12). Total LMX is represented by questions 1 to 12.
The second questionnaire used is the Minnesota Satisfaction Questionnaire. In this questionnaire, there are 20 questions. The questionnaire uses a Likert-like scale that ranges from Very dissatisfied (1) to Very satisfied (5). This questionnaire can also be divided into two categories which are Intrinsic (Q1, Q2, Q3, Q4, Q7, Q8, Q9,Q10, Q11, Q15, Q16, Q20) and Extrinsic (Q5, Q6, Q12, Q13, Q14,Q19). General satisfaction is represented by questions 1 to 20.
Scales reliability
The LMX questionnaire is divided into 4 categories. Each category has been tested for reliability from the Cronbach Alpha. The results are as follows: Affect .92, Loyalty .85, Contribution .76 and Professional respect .94. The alpha for Total LMX is .92. According to McMillan & Schumacher (1997), the reliability coefficient is a correlation statistic comparing two sets of scores from the same individuals. The scale for reliability coefficient is from .00 to .99. If the coefficient is high, for example. 90, the instrument has little error and is highly reliable. The opposite is true for the correlation near .20 or .35. An acceptable range of reliability for coefficients for most instruments is .70 to .90.
The Minnesota Satisfaction questionnaire has similar numbers. The Intrinsic alpha is .86, the Extrinsic alpha is .88 and the General satisfaction alpha is .93. According to the literature, all alphas are within the accepted limit for reliability.
In table 3, the four dimensions are identified with the intercorrelations between them.
The four dimensions have high correlations between them except Contribution. Coefficients range from .39 to .88.
Correlational analysis
TABLE 3
Means, Standard Deviations, and Intercorrelations of LMX Dimensions Scales___________________________________________________________________________
Dimensions 1 2 3 4 5
___________________________________________________________________________
21. Affect
22. Loyalty .76
23. Contribution .39 .39
24. Professional Respect .61 .65 .46
25. Total LMX .86 .88 .64 .85
Mean 5.14 4.66 5.78 5.31 5.22
S.D. 1.46 1.55 1.03 1.54 1.15
___________________________________________________________________________
Scales are from 1 to 7
n = 68
Table 4 shows the results for the satisfaction questionnaire as far as means, standard deviations and correlations are concerned. Each of the three basis for comparison are compared: intrinsic, extrinsic and general satisfaction. We must note that intrinsic comprises 12 questions, extrinsic 6 and general satisfaction 20. Two questions among the 20 are not included in either intrinsic nor extrinsic. Correlations between the three dimensions are high.
From table 5, we can get a better understanding of the relations or intercorrelations between the negotiating latitude dimensions and the satisfaction dimensions. The correlations are high, if we consider a coefficient of .60 to be high. The exceptions are in contribution and intrinsic dimensions.
TABLE 5
Means, Standard Deviations, and Correlations of
Measures of Member Negotiating Latitude and Satisfaction
____________________________________________________________________________
Intercorrelations
Variable 1 2 3 4 5 6 7 8
____________________________________________________________________________
Negotiating latitude
1. Affect
2. Loyalty .76
3. Contribution .39 .39
4. Professional respect .61 .65 .46
5. Total LMX .86 .88 .64 .85
Satisfaction
6. Intrinsic .36 .38 .30 .33 .42
7. Extrinsic .68 .65 .35 .55 .70 .76
8. General Satisfaction .56 .55 .35 .48 .60 .93 .92
Mean 5.14 4.66 5.78 5.31 5.22 4.03 3.42 3.84
S.D. 1.46 1.55 1.03 1.54 1.15 .61 .98 .68
____________________________________________________________________________
Scales for Negotiating latitude are from 1 to 7. Scales for Satisfaction are from 1 to 5.
n = 68
The hypotheses H1 to H5 can be better understood by using the figures in table 6. The hypotheses are as follows:
Ho1 There is a positive correlation between latitude of subordinates, as measured by LMX and Job Satisfaction.
Ho2 There is a positive correlation between Affect and Job Satisfaction.
Ho3 There is a positive correlation between Loyalty and Job Satisfaction.
Ho4 There is a positive correlation between Contribution and Job Satisfaction.
Ho5 There is a positive correlation between Professional respect and Job Satisfaction.
Place Table 6 about here
In table 7, means of another research (Liden & Maslyn, 1998) on Affect, Loyalty, Contribution and Professional respect are compared with the findings of this research.
TABLE 7
Means of Affect, Loyalty, Contribution, and Professional respect
__________________________________________________________________________
Manufacturing Hospitality Working Organizational Research
Students Employees Findings
Affect 4.85 5.63 4.96 5.42 5.14
Loyalty 4.78 5.15 5.06 5.05 4.66
Contribution 5.25 5.54 5.59 5.47 5.78
Professional respect 5.14 5.66 5.02 5.51 5.31
___________________________________________________________________________
Data from Manufacturing, Hospitality, Working students, and Organizational employees come from the research of Liden & Maslyn, 1998.
Analysis and evaluation of findings
Data was analyzed by using the Statistical Package for the Social Science (SPSS) program. This program permits the verification of correlations between the results of LMX and those of Job Satisfaction.
Before we proceed to analyze the data, we must remember what the research questions were. We must analyze these data while keeping in mind these questions that are:
What is the effect of empowerment (through LMX) on subordinate job satisfaction?
Based on the LMX theory, what is the proper mix of relational characteristics to promote better satisfied followers?
The five hypothesis are:
Ho1 There is a positive correlation between latitude of subordinates, as measured by LMX and Job Satisfaction.
Ho2 There is a positive correlation between Affect and Job Satisfaction.
Ho3 There is a positive correlation between Loyalty and Job Satisfaction.
Ho4 There is a positive correlation between Contribution and Job Satisfaction.
Ho5 There is a positive correlation between Professional respect and Job Satisfaction.
Based on these hypothesis, the answers can be found in table 5 (numbers) and in table 6 (figures). The hypothesis say that there is a positive relation between the variables. According to the literature, these numbers are classified as moderate high. The findings for the correlations indicate that there is a coefficient of correlation of .56 between Affect and General satisfaction (Ho1). There is a correlation of .55 between Loyalty and General satisfaction. General satisfaction and Contribution, Professional respect and Total LMX have the following correlations: .35, .48, and .60.
It is then fair to say that there is a positive relation between all five variables. Affect, Loyalty, Professional respect and Total LMX have moderate positive relations. Contribution has a low to moderate positive correlation. What this means, if we look at the research questions, is that there are three of the four dimensions which can more influence the general satisfaction of employees. These are Affect, Loyalty and Professional respect. As for the Contribution variable, the correlation is still positive but low. This means that the manager who wants to influence the satisfaction of the employees, can put more energy into Affect, Loyalty and Professional respect and less into Contribution because there is a low relationship with regards to Contribution and General satisfaction: .35.
Unlike other studies on LMX, which could only verify the relationship between LMX and other variables (i.e. satisfaction, turnover), this study has gone further by providing knowledge about the multidomain of LMX. Instead of having data based only on LMX, there are now four dimensions of LMX that can be analyzed. These dimensions are Affect, Loyalty, Contribution and Professional respect. The relationship between LMX and other variables like satisfaction can be better analyzed. In this case, we can say that there is a coefficient of correlation of .60 between LMX and General satisfaction. We can also verify what the relationship is between each of the four dimensions. By doing so, in this case, we can see that Contribution, which is part of Total LMX, doesn’t have as high coefficient of correlation with General satisfaction. When the manager wants to apply the concept of Leader-member exchange, he/she can focus on the three other dimensions more because they have a higher relation or effect on General satisfaction.
Summary
Some researchers (Coleman, 1998; Liden & Maslyn, 1998) have argued that LMX is not unidimensional. This research has used a multidimensional approach to LMX which is one of the very few to do so. The concept of multidimensionality of LMX has been defined by Dienesch & Liden in 1986 for the first time. They had first put forward three dimensions of LMX. In 1998, Liden & Maslyn have divided LMX into four dimensions for the first time. This research is one of the few to repeat the process and probably the first to use it in a banking environment. The findings of this researcher, which say that Affect, Loyalty and Professional respect have positive relationship with Job satisfaction can be useful for the manager who wants to apply the concept of LMX.
CONCLUSIONS AND RECOMMENDATIONS
Conclusions
It is interesting to see positive correlations between the variables we are studying. This means that there are relations between the variable but not necessarily that one is the cause of the other. For instance, there is a correlation coefficient of .56 between Affect and General satisfaction and a correlation coefficient of .35 between Contribution and General satisfaction. Based on these findings, we can assume that there is a higher relationship between Affect and General satisfaction than there is between Contribution and General satisfaction. One conclusion we can assert from these findings is that, taken together, meaning all four dimensions, Affect has a higher relation with satisfaction then Contribution. Meaning that the manager who wants to influence satisfaction of the employees could put more emphasis on Affect instead of Contribution.
Even if all hypotheses have shown to be positive, some variables have a higher relationship then other as far as job satisfaction is concerned. We can therefore conclude that there is a positive relationship between LMX and Job satisfaction and that some of the factors composing LMX (Affect, Loyalty, Contribution, and Professional respect) have a different effect on job satisfaction. It is therefore possible to focus on some of these variables instead of all four variables composing LMX. In this case, all four variables influence positively job satisfaction but the results could have been different. One or some of the variables could have has a negative influence or relationship with job satisfaction.
If we compare the results with those of Liden & Maslyn (1998), (table 7), we can see that the results of Loyalty are lower (4.66 compared to 5.06 or 5.15). In the region where the data was collected, unemployment is higher then from the samples of Liden & Maslyn (11% compared to 6%). This would explain why Loyalty is lower in this research because employers don’t have to try as much to keep their employees since there are others who are willing to take their place. On the same basis, it is also true for Contribution. The employees in the higher unemployment region think that their contribution is higher because they feel that their jobs require it. The jobs in the region are more scarce so they contribute more to keep theirs. The other two factors (Affect and Professional respect) are about average compared to other findings.
Recommendations
This research provided strong support for the Liden & Maslyn (1998) model of Leader-member exchange. A primary contribution of this research was to verify the relationships of LMX with General satisfaction of employees through a multidomain approach. This means that the research would permit LMX to be separated into four different dimensions to be tested with regards to the satisfaction of employees. The importance of dividing LMX into four different dimensions lies in the influence each dimension can have on satisfaction.
The results have shown that three of the four dimensions have higher contribution on satisfaction. These results are consistent with other findings. Other research is needed to verify these findings in other fields. Perhaps other methods of gathering data can be used other then self-administered questionnaires. There is a consistency if the results when the same method is used in collecting data but what if other methods were to be used? Would we find similar results?
Since the results indicate that there are factors that influence more job satisfaction in regards with the negotiating latitude (LMX), it would be in order to build such an instrument that would permit the manager to apply relationship factors to influence a better relationship with employees and therefore a better satisfaction in their jobs which could result in a higher contribution from the part of employees.
The results of this research provide empirical evidence of the importance of studying LMX through four dimensions. It used to be a time where LMX was studied as a unidimension (Graen & Uhl-Bien, 1991, 1995; Schriesheim & Gardiner, 1992). Now, with the new approach of LMX as a multidomain, it is becoming important that future research study LMX as a multidomain approach. This means that the manager using LMX to influence the subordinates, will have a better knowledge on which factors to focus on to get better results.
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TABLE 6
Scatter plots for the four dimensions and total LMX
with general satisfaction
Ho1 There is a positive correlation between latitude of subordinates, as measured by LMX and Job Satisfaction.
Total LMX and General satisfaction
Coefficient of correlation: .60
Ho2 There is a positive relationship between Affect and general satisfaction
Affect and General satisfaction
Coefficient of correlation: .56
Ho3 There is a positive correlation between Affect and Job Satisfaction.
Loyalty and General satisfaction
Coefficient of correlation: .55
Ho4 There is a positive correlation between Contribution and Job Satisfaction.
Contribution and General satisfaction
Coefficient of correlation:.35
Ho5 There is a positive correlation between Professional respect and Job Satisfaction
Professional respect and General satisfaction
Coefficient of correlation: .48