The Journal of Asian Finance, Economics and Business

Korea Distribution Science Association (한국유통과학회)
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The Effect of Leader-Member Exchange on Task Performance: Evidence from Knowledge Workers in China

  • CHE, Xiaoli (Ghazali Shafie Graduate School of Government (GSGSG), Universiti Utara Malaysia) ;
  • FAKHRORAZI, A. (Ghazali Shafie Graduate School of Government (GSGSG), COLGIS, Universiti Utara Malaysia) ;
  • HARIANI, Swarmilah (Ghazali Shafie Graduate School of Government (GSGSG), Universiti Utara Malaysia, Faculty of Economic and Business. Universitas Mercu Buana) ;
  • WEI-KIT, Loke (School of Tourism Management Studies, Reliance College Penang) ;
  • FOO-WAH, Lim (School of Business and Hospitality, Disted College Penang, Malaysia)
  • Received : 2020.11.30
  • Accepted : 2021.05.02
  • Published : 2021.06.30
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Abstract

This study examines the effect of leader-member exchange (LMX) on knowledge workers (k-workers)'s task performance and the mediating effect of affective commitment on the relationship between LMX and task performance; the analysis of such relationship, informed by the Social Exchange Theory, will make a theoretical contribution to k-workers' working behavior in China. The technique of data collection in this study involved 280 k-workers respondents from China to whom a self-administered questionnaire was distributed. Data were analyzed using Partial Least Square (PLS) with Structural Equation Modeling (SEM) tools. The results show that LMX has a positive relationship with affective commitment and task performance. The result also confirmed the mediating effect of affective commitment on the relationship between LMX and task performance. This research provides some guidance to manage, motivate, and inspire the k-workers, and finally promote the organizational performance. The main point of the results is that it is essential for managers to keep a good and harmonious relationship with their subordinates. When the level of LMX between leaders and k-workers is high, they are more willing to stay in their organization, which is helpful to promote their task performance and brings benefit to the organizational performance.

Keywords

1. Introduction

Development of an integrated world economic has witnessed a greater number of foreign multinational corporations entering the Chinese market and this move has piled competitive pressure on local Chinese companies. In this context, improving employees’ performance to enhance international competitiveness has become an urgent issue for enterprises (Li & Weizheng, 2015). Improving the quality of leader-member relationship requires leaders to interact and maintain exchanges with subordinate members (Nguyen, 2020). Leaders’ characteristics influence leadermember exchange (LMX) and social capital, which further facilitates job performance (Tran et al., 2020). For the past 20 years, the most valuable asset of most organizations has been knowledge workers (k-workers). What k-workers know and can do is to promote the development of the company (Henard & McFadyen, 2008). In the 21st century, k-workers are key to building a competitive edge as they are responsible for finding new solutions for business development (Igielski & Michał, 2017). The secret of a company’s performance management and development lies in improving their k-workers’ task performance. However, there is a lack of research on how to improve k-workers’ task performance in China (Li & Weizheng, 2015).

In recent years, enterprises have come to realize the importance of k-workers and have adopted better ways to recruit, maintain and motivate this special and valuable resource, such as improving their pay level, paying more attention to them and the benefits accruing to them (J.P Morgan, 2016). Although existing measures are useful to some extent, more measures still need to be explored (Bieńkowska & Ignacek-Kunicka, 2020). Mládková, Zouharová, and Novy (2015) suggested that the wrong motivation can negatively influence k-workers’ performance, even though they are usually responsible professionals. Mládková et al. (2015) listed some motivations or behaviours that can influence k-workers’ working performance, such as “does my supervisor, or someone at work care about me as a person”, “conflict between what the manager says and what he does” and many of these motivations or behaviours are related to the relationship between k-workers and their supervisor. Hence, the relationship between supervisor and k-workers is a crucial element that can motivate or influence k-workers’ working performance. Since the relationship between supervisor and subordinate can be tested by leader-member exchange (LMX), therefore, the relationship between k-workers’ LMX and task performance will be tested in this study. Moreover, affective commitment will be a mediator that further illustrates how LMX affects k-workers’ task performance in Chinese companies.

2. Literature Review

2.1. Social Exchange Theory

According to Blau (1964), the Social Exchange Theory (SET) was developed as an outgrowth of the sociological properties of “interpersonal relations and social interactions” in the middle of the 20th century. Based on a combination of utilitarianism and behaviourism, the SET propagates situational responses to each other from different viewpoints of actors (Cook & Rice, 2003). Social exchanges are classic joint activities by definition, and both participants in a relationship can reap benefits in this exchange. By definition, then, social exchange is a quintessential joint activity in which two sides partake in a relationship to gain rewards via their transactions (Emerson, 1976; Lawler, 2001). Given the prerequisite, each individual in the exchange process needs to offer something valuable to each other, and it is helpful to set specific objectives to achieve this (Lawler, 2001). The valuable element provided by individuals can be intrinsic, but it needs to be accepted and considered to be important by the other. The valued items in the exchange process between two individuals result in a continuous interaction of acts, which engages every actor in the exchange to establish expectations for others (Blau, 1964). Researchers call this kind of anticipated feedback action the reciprocity rule, and it specifies the important direction of SET (Blau, 1964; Konovsky & Pugh, 1994). People offer themselves and hope the favour or gesture will be reciprocated when the time comes.

2.2. K-workers

The k-worker concept was proposed by Drucker and Peter (1994). In fact, what they referred to at that time was the enterprise manager. They claimed that k-workers are defined as people who master and apply symbols and concepts as well as work with knowledge and information. K-workers emphasize on quality and ability and they usually possess a high educational level as well as professional knowledge and skills. These skills are characterized by high demand, with a short life-cycle, and are critical to the organization, including symbolic analysis skills (Despres & Hiltrop, 1995; Jie, WenQuan, & LiLuo, 2006; Lee & Maurer, 1997), ability to analyse information, distribution ability, production capacity (Banerjee, 2006), and the ability to use tools or techniques (Barley & Orr, 1997; Kubo & Saka, 2002). Reich (1991) defined k-workers as “symbolic analysts” and suggested that “symbolic analysts” include problem solvers who manipulate output to meet customer needs, problem solvers who help identify customer needs in the market, and brokers, such as financiers or researchers. In relation to China, Jie et al. (2006) defined k-workers as individuals with a high educational level, professional skills and the ability to apply these skills to identify and solve problems.

2.3. Leader-Member Exchange (LMX)

LMX is the development of the social exchange theory (SET), and it illustrates how leaders establish a different exchange relationship with different followers in the same group over time (Dansereau, Graen, & Haga, 1975), which refers to the exchange relationship quality between subordinates and representatives. Besides that, the LMX model describes an alternative way of understanding the superior-subordinate relationship. The LMX model is based on the concept that development of a role naturally leads to differences in role definitions and various exchanges between leader-member. Most LMX studies are based on the expectations of negotiating the latitude of leaders and members. The subordinate’s position and LMX efficiency are split into two categories, namely in-group and out-group (Wang, 2016). In-group refers to high-quality LMX with high-trust and formal or informal incentives, and the relevant participants in the organization can receive more feedback and their work has a greater degree of freedom to contribute to team members outside their formal responsibilities (Liden, Robert, Graen, & George, 1980). Conversely, low-trust interaction that provides help and incentives is described as the out-group or low LMX employees. The contact in a out-group relationship is confined to the employment contract. In other words, participants outside the team carry out more routine and daily activities as well as interact more explicitly with the supervisor (Lee, Thomas, Martin, & Guillaume, 2019).

2.4. Affective Commitment

Meyer, Allen, and Smith (1993) defined affective commitment to an organization as “a psychological link between the employee and the organization, which makes it less likely that the employee will voluntarily leave the organization”. Employees with strong affective commitment are expected to remain in the company because they “want to”, primarily based on emotional connection to the organization (Meyer & Allen, 1997). Therefore, affective commitment can increase the probability of workers remaining in the organisation. Employees having affective commitment show enthusiasm for the organization, and “feel” satisfied working for it (Demirtas & Akdogan, 2015; Mercurio, 2015; Vandenberghe, Bentein, & Panaccio, 2017). Affective commitment is a “psychological condition” characterized by a relationship between employees and their organization or by their emotional links. The psychological condition relates to workers’ inner emotions about their working conditions, or also known as the psychological climate, which is affected by many antecedents, such as autonomy, leadership, organizational justice, and leader-member exchange (Chang, Leach, & Anderman, 2015; Eisenberger et al., 2010; Pradhan & Pradhan, 2015). Organizational commitment is a prerequisite, especially when employees and organizations want to maintain a working relationship between them. Responsibility is an obligation felt by employees who want to remain in the organization (Haerani et al, 2020).

2.5. Task Performance

Task performance comprises the expertise through which administrative staff perform their duties, and it is officially accepted as part of their job. Moreover, these are actions that play a part in the organization’s technical core competency, either directly (executing a part of its technological process) or indirectly (supplying the required materials or services) (Borman & Motowidlo, 1993). In regard to facilitators and impediments of task performance, researchers have investigated numerous situational factors that can predict task performance. Previous studies have explored human resource practices that fit on-job crafting and task performance (Guan & Frenkel, 2018). Likewise, several studies have explored the role of respectful engagement and work engagement in task performance (Basit, 2019). Some studies have investigated the effects of a positive working environment and work engagement on task performance (Geue, 2018). Recently, some studies investigated the effects of employee involvement climate on task performance (Smith, Wallace, Vandenberg, & Mondore, 2018). The theoretical framework refers to how particular phenomena, variables or concepts are related to each other in a model, and explains the interrelationship between these variables (Sekaran & Bougie, 2003). In this study, which is based on SET, the relationship between k-workers’ LMX and task performance was tested, with affective commitment included as a mediator.

2.6. Research Hypotheses and Framework

2.6.1. LMX and Affective Commitment

Previous studies show that LMX quality is positively linked to affective commitment, as high-quality LMX meets different socio-emotional needs (e.g., affiliation, esteem, and emotional reinforcements) of subordinates (Garg & Dhar, 2016; Zhao, 2014). Subordinates who are well cared for by their supervisors will feel a sense of belonging or bonding with the organization, as they presume that the supervisor represents the organization (Ariani, 2012; Eisenberger et al., 2010). Therefore, subordinates will be more likely to work in comfortable working conditions where they prefer staying on (Eisenberger et al., 2010). In other words, employees who have higher LMX will impart the elements of emotional need (e.g., love, respect, gratitude) to their supervisors and organization, resulting in an increased affective commitment to the organization, as affective commitment refers to the employees’ emotional dependence, identification, or investment in the organization. Therefore, according to previous research, this study proposed the following hypothesis:

H1: There is a positive relationship between LMX and affective commitment.

2.6.2. Affective Commitment and Task Performance

Affective commitment is a positive feeling of identification, attachment, and participation in the work organization (Meyer et al., 1993). Previous studies suggest that employees who have high emotional attachment to the organization will increase their willingness to try their best for their group (Casimir, Ngee Keith Ng, Yuan Wang, & Ooi, 2014). One possible reason of this finding is that employees have been treated positively by the leadership (e.g., LMX) or the organization. Positive treatment is a form of social interaction that evokes expectations of reciprocity that eventually inspire a person to do the level best for the organization, which means that their task performance might be improved when they have higher affective commitment (Casimir et al., 2014). Hence, based on previous research, this study proposed the following hypothesis:

H2: There is a positive relationship between affective commitment and task performance.

2.6.3. LMX and Task Performance

As for the relationship between LMX and task performance, there are a number of reasons for LMX quality to be positively related to followers’ task performance. Firstly, the leader provides tangible and intangible benefits to the follower in a high-quality leader-member relationship (Kuvaas & Buch, 2018). Tangible benefits (resources, money) promote better performance by clearing the path for followers, while intangible benefits (favours, appreciation, affection shown by superiors) allow subordinates to make extra efforts or work with utmost dedication because of the level of reciprocity (Kuvaas, Buch, Dysvik, & Haerem, 2012). Secondly, in a high-quality relationship followers receive greater support, are more motivated and have a higher degree of job satisfaction compared to lowquality subordinates (Gerstner & Day, 1997; Hill, Kang, & Seo, 2014). Lastly, followers in high-LMX relationships have greater opportunities for advancement compared to subordinates in low-LMX relationships. Therefore, members would be more inclined and driven to perform well if organizations take advantage of such incentives. This way, employees with high-LMX exhibit better task performance compared to those with low-LMX in their organization. Hence, based on previous research, this study proposed the following hypothesis:

H3: There is a positive relationship between LMX and task performance.

2.6.4. LMX, Affective Commitment and Task Performance

The theory of social exchange hypothesizes that LMX uses its advantage by building social exchange relationships between superiors and followers. Blau (1964) suggested that the origin of LMX is based on SET and proposed that reciprocation of both tangible and intangible exchanges between supervisors and subordinates improves the quality of their relationship. Thus, followers in the exchange process can provide some kind of service that leaders regard as important, such as dedicating themselves towards achieving the goals of their managers or contributing their services to their organization (Dansereau et al., 1975). This finding indicates that affective commitment has an important role in the social exchange process according to LMX.

According to Meyer and Allen (1991), individuals who experience a greater affective commitment are more willing to continue serving their organization. Hence, if employees with higher affective commitment are more faithful and committed towards their organization, employees will express a strong willingness to contribute more to their organization, which then improves their task performance (Al Zefeiti & Mohamad, 2017; Cesário & Chambel, 2017; Yousaf, Yang, & Sanders, 2015). Hence, according to previous research, this study proposed the following hypothesis (see Figure 1):

OTGHEU_2021_v8n6_505_f0001.png 이미지

Figure 1: Theoretical Framework

H4: Affective commitment mediates the relationship between LMX and task performance.

3. Research Method

According to Sekaran and Bougie (2003), a sampling technique refers to the selection of an adequate number of relevant individuals from the population in order to estimate the parameter of the population. The major focus of this study is Chinese k-workers. According to Jie et al. (2006), k-workers are a special group of people who have a bachelor’s degree or a higher educational level. In this study, 280 qualified subjects were recruited. The data collection technique in this study used self-administered questionnaires distributed to k-workers in China. Items in the questionnaire were measured using the 5-point Likert scale and the adapted items are as follows: LMX (7 items) from Graen, George, and Uhl-Bien (1995); affective commitment (8 items) from Karim and Noor (2017); and task performance (7 items) from Koopmans et al. (2014). Out of the 600 sets of questionnaires, 280 sets were useable for analysis. Data collected from the self-administered questionnaires were analysed using the Partial Least Square (PLS) with Structural Equation Modelling (SEM).

4. Results and Discussions

4.1. Composite Reliability and Convergent Validity

Evaluation of the measurement model is the first step of model evaluation in PLS-SEM. Validity of the measurement model should be determined before a model check or hypothesis test can be performed. According to Hair, Hult, Ringle, and Sarstedt (2014), it is acceptable if the composite reliability value is over 0.7. As shown in Table 1, the composite reliability values of LMX, AC, TP are all over 0.7 and, thus, meet the requirement for establishing convergent validity.

Table 1: Composite Reliability

OTGHEU_2021_v8n6_505_t0001.png 이미지

Note: Where ‘LMX’ refers to leader-member exchange, AC refers to affective commitment and ‘TP’ refers to task performance.

Convergent validity of all 4 variables are shown in Table 2. Table 2 also shows that the factor loadings of LMX, AC, TP are over 0.5, and their AVE are all over 0.5, which means that the convergent validity of all 4 variables are acceptable.

Table 2: Convergent Validity

OTGHEU_2021_v8n6_505_t0002.png 이미지

4.2. Discriminant validity

Discriminant validity is acceptable when the square root of AVE is higher than its squared correlation value. As shown in Table 3, the square root of AVE of the model constructs is all higher than its squared correlations, which means that the discriminant validity of all 3 variables are acceptable and recognized.

Table 3: Discriminant Validity of Constructs

OTGHEU_2021_v8n6_505_t0003.png 이미지

Note: Where ‘LMX’ refers to leader-member exchange, AC refers to affective commitment and ‘TP’ refers to task performance.

4.3. Analysis of the Structural Model

R2 values can be used to investigate the quality of each variable in the structural model by using structural model specifications. Hence, if the R2 value is within the range of 0 to 1, then it is acceptable (Hair et al., 2014). The R2 of endogenous latent variables of affective commitment and task performance indicate a substantial level, as shown in Figure 2. Figure 2 shows that AC and TP are two endogenous variables that are at a substantial level, which is at 63.60 per cent and 53.67 percent.

OTGHEU_2021_v8n6_505_f0002.png 이미지

Figure 2: The Structural Model for Individual Latent Variable

Note: Where ‘LMX’ refers to leader-member exchange, AC refers to affective commitment and ‘TP’ refers to task performance.

4.4. Hypothesis Testing

Hypothesis testing, also known as bootstrapping technology, uses repeated random sampling and replacement of the original sample to create a bootstrap sample, and finally obtains the standard error for hypothesis testing. Figure 3 shows the PLS Bootstrapping results for the study model.

OTGHEU_2021_v8n6_505_f0003.png 이미지

Figure 3: Hypothesis Testing

Note: Where ‘LMX’ refers to leader-member exchange, AC refers to affective commitment and ‘TP’ refers to task performance.

Table 4 shows the summary of the hypothesized structural relationship between LMX, affective commitment and task performance. As shown in Table 4 and Figure 3, 10% of the significance level of the two-tailed test requires a t-value of at least 1.65 in order to be acceptable. Findings about the independent variables show that LMX with a t-value of 16.945 has a significant influence on affective commitment. Besides that, LMX is highly significant for task performance with a t-value of 5.709. Data show that the mediator for affective commitment is significant for task performance with a t-value of 8.560. Thus, hypotheses H1, H2, H3 are all supported.

Table 4: Hypothesis Testing

OTGHEU_2021_v8n6_505_t0004.png 이미지

Note: Where ‘LMX’ refers to leader-member exchange, AC refers to affective commitment and ‘TP’ refers to task performance.

In regard to the testing of the mediating effect of affective commitment on the relationship between LMX and task performance (H4), this study assessed how much of the direct path is absorbed by using ‘variance accounted for’ (VAF). Thus, if the VAF < 0.2, it means there is no mediation effect, a VAF range from 0.2 to 0.8 means partial mediation and a VAF > 0.8 means full mediation. Table 4 shows the results of the mediation effect tests. Post-analysis indicates the AVE result for H4 is 1.438, which shows that affective commitment fully mediates the relationship between LMX and task performance. Hence, H4 is supported.

5. Discussion

LMX and Affective Commitment

Results show that LMX has a positive effect on affective commitment. This means that organizational managers should attach importance to increasing mutual understanding between leaders and employees, as well as promote, encourage and stimulate social exchange between leaders and members, which is helpful in promoting their willingness to stay on with the organization (Garg and Dhar, 2016, Zhao, 2014, Ariani, 2012, and Eisenberger et al., 2010). This is because, when an employee feels that his relationship with his superiors is good, he will feel comfortable and motivated to work as well as the desire to continue working with the organization, which ultimately increases an employees’ commitment to the organization (Ariyanto, 2019).

Affective commitment and task performance

Results show that affective commitment also has a positive effect on k-workers’ task performance. It indicates that managers should find more ways to promote k-workers’ willingness to stay in their companies, which is helpful for promoting their task performance (Casimir, Ngee Keith Ng, Yuan Wang, and Ooi, 2014). K-workers with high affective commitment will still join the organization out of a desire to remain a member of the organization (Allen & Meyer, 1993). Organizations can build a strong belief in k-workers that they should adhere to all organizational values, and try to make the achievement of organisational goals their top priority

LMX and task performance

Results show that LMX has a positive effect on task performance. This means that LMX is a crucial element that can improve k-workers’ performances. Organizational managers should create and maintain a harmonious relationship with their k-workers. Such a conducive relationship will benefit the development of individual performance and eventually improve organizational performance (Kuvaas and Buch, 2018; Kuvaas, Buch, Dysvik, and Haerem, 2012). High-quality relationship followers receive more support, are more motivated and have a higher degree of job satisfaction compared to low-quality subordinates (Gerstner and Day, 1997; Hill, Kang, and Seo, 2014).

LMX, Affective commitment and task performance

This study also revealed the mediating effect of affective commitment on the relationship between LMX and task performance. Thus, this result mainly emphasises that it is essential and important for managers to create and maintain a good and harmonious relationship with their subordinates. When the level of LMX between leaders and k-workers is high, the k-workers are more willing to stay on with their organizations, which is helpful for promoting their task performance and benefits organizational performance.

6. Conclusion

This study investigated the relationship between k-worker’s LMX, affective commitment, and task performance. According to the results of the analysis, the proposed framework had provided an insight and understanding into the relationship between each variable that influences the k-worker’s task performance. It also revealed the mediating effect of affective commitment on the relationship between k-worker’s LMX and task performance. This study suggests that managers should discover more ways to enhance and promote k-workers’ LMX and their willingness to stay on with their organization because it benefits their task performance.

Results of this study provide some significant guidance in management practice for enterprise managers. K-workers are eager to realize their self-worth by relying on their own knowledge and can be respected or recognized by others. Besides, k-workers have distinct personalities and are independent. They are not willing to be disciplined by others, nor are they willing to advocate authority. Hence, due to the unique characteristics of k-workers and their changes in working style, the relationship between k-workers and their leaders need to be further explored. This study investigated the relationship between k-worker’s LMX, affective commitment and task performance, and such a relationship will reveal some theoretical contributions of k-worker’s working behaviour. This study also provided some empirical underpinnings on how to stimulate, manage, and motivate k-workers.

*Acknowledgements:

We are grateful to the anonymous referees and editor of the journal for their valuable insights and suggestions to enhance the quality of the article

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