Leader–member exchange social comparisons and follower outcomes: The roles of felt obligation and psychological entitlement

Abstract

In the current study, we aimed to extend the understanding of how and when leader–member exchange social comparison (LMXSC) influences followers’ work behaviour. Based on social exchange theory, we argue that felt obligation to one's leader is a mediator of the relationship between LMXSC and follower outcomes. Further, we posit that the relationship between LMXSC and felt obligation will occur over and above overall LMX quality. We also investigate whether the effect of LMXSC is not consistent across employees but influenced by their level of psychological entitlement (PE). We found evidence that LMXSC was associated with followers’ organizational commitment in Study 1 (using data collected in two phases from 188 employees) and both organizational commitment and job performance in Study 2 (based on data collected in two phases from 300 employees and their 34 supervisors) via felt obligation towards the leader. In both studies, we found this relationship was significant while controlling for LMX quality, suggesting that perceptions of relative LMX standing are more influential than overall LMX quality. Moreover, high levels of PE reduced employees’ feelings of obligation to reciprocate positive treatment and the extent to which they exhibit higher levels of organizational commitment and job performance. Our findings show that individual differences play a significant role in determining the outcomes of exchange relationships. Practitioner points: Followers do not evaluate their Leader–member exchange (LMX) relationship in isolation from their co-workers, and social comparisons in this context have powerful effects on followers. If leaders want to motivate their followers, treating each follower in the same way and avoiding differentiation may be ineffective. Followers appear to be more willing to reciprocate when they perceive a better LMX relationship with the leader than their co-workers’ LMX relationship with the leader. Managers should be cognizant that followers with varying levels of psychological entitlement may respond differently to LMX relationships. As such, managers could decide to invest more heavily in building strong relationships with followers low in psychological entitlement, as these followers are likely to respond more positively to favourable treatment by the leader. Managers should be aware that the norm of reciprocity might not apply to the same extent when employees are high in psychological entitlement; and thus, other influence tactics may be required to get the most out of these employees. Managers should set clear guidelines and expectations on followers early in the employment relationship. When entitled employees are made fully aware of the relationship expectations, they may be more prepared to meet them.