This paper provides insights into the relationship between leader–member exchange (LMX) and employee job performance. An integrative model that includes work engagement and human resource management (HRM) consistency, defined as the extent to which various HR practices are viewed as consistent with one other, was developed to explain this relationship. Results from a hierarchical linear model based on 298 employees (survey data) and 54 supervisors in a large luxury hotel in southern China indicated that LMX was positively related to employee job performance. Moreover, as expected, work engagement mediated this relationship and HRM consistency strengthened the influence of LMX on work engagement. Important research and practical implications are discussed.
Globalization has encouraged more intense competition among service organizations and according to Schneider and Bowen (2010) organizations need to go beyond customer expectations in order to ‘win the service game’. Fulfilling customers’ variable and idiosyncratic needs is difficult and relies on the co-ordination of highly motivated employees. Sub-optimal performance of any part of the value chain is likely to reduce customer evaluations of service quality (Fantazy et al., 2010 and Wang et al., 2012). Front-line employees who frequently interact with customers need to be sensitive and proactive regarding customer requirements. Back-stage employees – those with limited or no interaction with customers are expected to provide effective support to front-line employees. Engaged and well performing employees therefore become a key element in maintaining service excellence.
Research shows that immediate managers (team leaders or supervisors) can significantly influence employees’ work motivation and job performance (Gerstner and Day, 1997, Ilies et al., 2007 and Liden et al., 1993). In this study we use LMX theory to explore the influence of the supervisor, arguing that supportive supervision, as perceived by employees, encourages employee engagement which in turn contributes to job performance. LMX is defined as the quality of the relationship between supervisor and subordinate (Graen and Scandura, 1987). LMX assumes that supervisors use a different style for each of their subordinates. Based on dimensions such as mutual trust, respect and obligation, differentiated relationships between leaders and followers have been found across cultures (see Graen and Uhl-Bien, 1995). Law et al. (2010) reported two studies in China in which LMX was positively related to task performance and OCBs in the first study while LMX was associated with contextual performance in the second study. LMX influences work outcomes through different mechanisms including organizational job embeddedness (Harris et al., 2009a and Harris et al., 2009b), trust in the supervisor (Wat and Shaffer, 2005) and feedback avoidance behavior (Moss et al., 2009). Recent research has examined LMX's influences on service employees’ emotions. Using a Chinese call center sample, Huang et al. (2010) found that LMX and burnout were negatively associated. Emotional states are particularly relevant to service employees whose performance, as we argue later, depends on their willingness to ‘go the extra mile’ In this study, we examine whether work engagement – a construct combining emotion and cognitive disposition – acts as a mediator in the relationship between LMX and employee job performance. Schaufeli et al. (2002) define work engagement as a positive, fulfilling, work-related state of mind characterized by vigor, dedication and absorption (see also Bakker and Demerouti (2007)). Modern organizations, especially in the service sector, need employees who are engaged with their work: they are more pro-active, take more initiatives and feel more responsible for delivering quality outcomes (Bakker and Leiter, 2010). In addition, our study integrates LMX with an additional organizational influence, namely the Human Resource Management (HRM) system. Recently attention has moved from a concern with the content of HRM, – e.g. recruitment and selection, and performance appraisal – to HRM process (see Sanders and Frenkel, 2011), i.e. how HRM practices are implemented by line managers and interpreted by employees, with consequences for organizational performance (Bowen and Ostroff, 2004). In this study we propose that the more employees perceive consistent messages concerning the purpose of HR practices (HRM consistency) the stronger will be LMX influences on work engagement and employee job performance.
Prior studies have investigated LMX – outcome relationship contingencies including leadership style (Harris et al., 2009a and Harris et al., 2009b), task characteristics (Dunegan et al., 1992 and Dunegan et al., 2002); employee personality (Harris et al., 2009a and Harris et al., 2009b), top management support (Erdogan and Enders, 2007); and employee psychological climate (Tordera et al., 2008). However, little is known about how the characteristics of an HRM system influence LMX-outcome relationships. This is surprising since scholars have for some time suggested more integration between LMX and HRM studies (Lengnick-Hall and Lengnick-Hall, 2003 and Uhl-Bien et al., 2000). While a high-quality supervisory relationship is likely to be an important influence on employees’ performance, consistent HRM messages will tend to reinforce the alignment between management expectations and employee goals, fostering stronger engagement and ultimately leading to higher individual performance.
The remainder of this paper is organized as follows. We begin by noting key work requirements in luxury hotels followed by an outline of our theoretical framework and hypotheses. The data and methodology are then described followed by a presentation and discussion of our results. We conclude by considering implications for further research and practice and noting the study's major limitations.
Our study addressed the challenge of extending LMX explanations of job performance by focusing on mediating and moderating variables in a hospitality setting. LMX was found to influence job performance via work engagement while consistency in HRM communications encouraged employees to respond to favorable LMX relations with increased work engagement and higher performance.
This contribution suggests three directions for future research. First, it is unclear what aspects of LMX are most important for employees. Is supervisor contribution more important than respect as a professional or loyalty to the person? Application of a multidimensional rather than a global measure of LMX would help to answer this question. Second, many organizations seek to develop a unique culture that is intended to encourage particular attitudes and behaviors. Accordingly, future research should measure this organizational attribute and examine how it strengthens or weakens employee engagement and performance. Finally, rather than seeking performance assessments from supervisors, research in service organizations should consider measuring individual performance from the standpoint of service recipients, i.e. from internal or external customers depending on the individual's organizational position.
