Differentiation in leader–member exchange: A hierarchical linear modeling approach

This paper explores possible antecedents and consequences of leader–member exchange (LMX) differentiation. LMX differentiation is a group-level construct, defined as the degree to which members working with the same leader differ in terms of their LMX relationship quality with their leader. Specifically, we hypothesize that leaders’ personal universalistic values are negatively correlated with LMX differentiation. LMX differentiation, in turn, moderates the lower-level effect that LMX has on performance evaluation. Using surveys from leaders and subordinates as well as archival data from six companies, we found support for these arguments. However, we did not find support for a hypothesized cross-level moderation effect of differentiation on the effect LMX has on interactional justice. Implications for theory and discussion of future research directions are also addressed.