Supervisors' Perceived Organizational Support as a Moderator of ...

Journal of Applied Psychology 2007, Vol. 92, No. 2, 321–330

Copyright 2007 by the American Psychological Association 0021-9010/07/$12.00 DOI: 10.1037/0021-9010.92.2.321

Support From the Top: Supervisors’ Perceived Organizational Support as a Moderator of Leader–Member Exchange to Satisfaction and Performance Relationships Berrin Erdogan and Jeanne Enders Portland State University The authors hypothesized that supervisors’ perceived organizational support (POS) would moderate the relationships between leader–member exchange (LMX), job satisfaction, and job performance. On the basis of social exchange theory, supervisors’ exchanges with the organization and subordinates should be interconnected. The authors expected that supervisors with high POS would have more resources to exchange with subordinates. Thus, supervisor POS should enhance the relationships between LMX and job satisfaction and LMX and job performance for subordinates. Hierarchical linear modeling analysis provided support for the hypotheses in a sample of 210 subordinates and 38 supervisors of a grocery store chain. The positive relationship between LMX and job satisfaction was stronger when supervisors had high POS. Moreover, LMX was related to performance only when supervisors had high POS. Keywords: leader–member exchange, perceived organizational support, hierarchical linear modeling, job satisfaction, job performance

resources to members (Liden, Sparrowe, & Wayne, 1997), which leads to higher job satisfaction (Gerstner & Day, 1997). In return, subordinates repay these benefits via high performance and other behaviors that may benefit the leader, such as citizenship behaviors (Masterson, Lewis, Goldman, & Taylor, 2000). There have been at least two limitations with this line of research. First, most LMX studies have examined the focal dyad and have assumed that leaders have similar potential to provide benefits to subordinates. However, it should be remembered that leaders have exchanges with those higher than themselves, in addition to their exchanges with subordinates. Depending on the quality of their exchanges with those at upper levels, leaders may have greater or fewer opportunities and resources to share with subordinates. Social exchange theory predicts that a person may receive resources from one relationship and offer them to a different person in another relationship (Molm, Peterson, & Takahashi, 2001). Thus, to better understand what happens in a LMX, it is helpful to broaden our focus to include leaders’ upward exchanges. Early LMX researchers recognized the role of leaders’ upward exchanges with their own bosses for the employee attitudes at lower levels (Cashman, Dansereau, Graen, & Haga, 1976), and continuing this line of research is important. Second, LMX literature has been criticized for paying limited attention to moderators (e.g., Erdogan & Liden, 2002; House & Aditya, 1997; Schriesheim, Castro, & Yammarino, 2000). We still have limited knowledge regarding whether all LMXs are equally satisfying and whether all members reciprocate high LMX with high performance. When dyadic exchange quality is weakly related to employee satisfaction and performance, leaders will need to identify alternative means of influencing member attitudes and behaviors. Thus, addressing this gap is important. In this study, we contended that supervisors’ exchanges with the organization would enhance the benefits employees derive from LMX, leading to a stronger relationship between LMX and subordinate satisfaction. The greater benefits high LMX members

Leadership has long been identified as a key factor in the goal achievement of groups and organizations. Leadership, defined as the ability to influence others (Yukl, 1998), has been the subject of systematic studies since the 1930s (House & Aditya, 1997). Most leadership theories developed during this time focused on identifying the effects of leader traits or behaviors. Among the theories that have been most successful in explaining how leaders influence subordinates, leader–member exchange (LMX) theory holds a unique place (Dansereau, Graen, & Haga, 1975; Graen & Scandura, 1987). LMX theory has its roots in social exchange theory (Blau, 1964). According to LMX theory, leaders form relationships of varying quality with different subordinates. Specifically, leaders develop high-quality exchanges with some subordinates, and these relations are characterized by trust, liking, and respect. With other subordinates, however, leaders may form lower quality exchanges that are limited to the provisions of an employment contract. Examining the quality of this relationship is the key to understanding how leaders influence and are influenced by their subordinates. Most LMX researchers have studied the relationship among LMX, member attitudes, and behaviors. These studies showed that in a high-quality LMX, leaders provide intangible and tangible

We thank Talya Bauer for her helpful comments on drafts of this article and Greg Tensa for his assistance in data entry and editing of the manuscript. The research reported in this article was funded by the Food Industry Leadership Center of Portland State University. We would especially like to thank the director of the center, Tom Gillpatrick, and the associate director, Molly Deady Washburn, for this support. A draft of this article was presented at the 2005 Academy of Management meeting in Honolulu, Hawaii. Correspondence concerning this article should be addressed to Berrin Erdogan, Portland State University, School of Business, PO Box 751, Portland, OR 97207-0751. E-mail: [email protected] 321

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receive will, in turn, enhance the motivation to reciprocate, strengthening the link between LMX and performance. Given that supervisors tend to hold a “linking pin” position connecting their subordinates to the overall organization, their own exchanges with the organization should matter for LMXs. We conceptualized the exchange between the supervisor and the organization using the construct perceived organizational support (POS). POS refers to the degree to which individuals believe that the organization cares about them, values their input, and provides them with help and support. Whereas LMX captures exchanges with leaders, POS is an indicator of exchanges with the organization (e.g., Masterson et al., 2000; Settoon, Bennett, & Liden, 1996; Tekleab, Takeuchi, & Taylor, 2005; Wayne, Shore, & Liden, 1997). By studying a supervisor’s POS as a moderator of the relationship between LMX, satisfaction, and performance, we aimed to make three contributions. First, we added to the LMX literature by examining how exchanges at different levels are interconnected. Researchers have noted that studying interconnections among exchanges is an important research direction (e.g., Sias, 1996; Sparrowe & Liden, 1997). We examined how supervisors’ exchanges with the organization relate to their exchanges with subordinates and, thus, integrated supervisors’ exchanges at different levels. Second, we added to the small number of studies examining moderators of the LMX and outcome relationship (e.g., Bauer, Erdogan, Liden, & Wayne, 2006; Kacmar, Witt, Zivnuska, & Gully, 2003). We focused on job satisfaction and performance as outcomes, which are the two most frequently studied outcomes of LMX (Gerstner & Day, 1997). In their meta-analysis, Gerstner and Day (1997) concluded that the LMX–job satisfaction and LMX– job performance relationships were heterogeneous, warranting a search for moderators. Finally, we contributed to the POS literature by studying the implications of supervisors’ POS for subordinates. To date, the POS literature has focused only on the effects of employee POS on employee attitudes and behaviors (Rhoades & Eisenberger, 2002). Our study built on previous research by examining the trickle-down effects of POS on those other than the recipients of support. This is the first study to examine how supervisor POS may have implications that go beyond supervisor attitudes and behaviors by conducting the first cross-level investigation of POS.

Leader–Member Exchange, Job Satisfaction, and Job Performance One of the consistent findings in the LMX literature is that LMX is positively related to job satisfaction (Gerstner & Day, 1997). This is because high LMX relationships provide intangible and tangible benefits to members. Intangible benefits include communication with leaders (Hofmann & Morgeson, 1999; Yrle, Hartman, & Galle, 2002) and having a trust-based relationship (Bauer & Green, 1996). Tangible benefits include decision influence (Scandura, Graen, & Novak, 1986), empowerment (Liden, Wayne, & Sparrowe, 2000), career advancement (Wakabayashi, Graen, Graen, & Graen, 1988), and salary progress (Wayne, Liden, Kraimer, & Graf, 1999). These create a positive environment for members, leading to higher job satisfaction. Similarly, employee reports of LMX have been related to employee job performance (Bauer & Green, 1996; Kraimer, Wayne, & Jaworski, 2001; Liden & Graen, 1980; Wang, Law, Hackett,

Wang, & Chen, 2005). According to social exchange theory, when members observe that they receive support, trust, and other tangible and intangible benefits from their leaders, they develop an obligation to reciprocate (Gouldner, 1960). Therefore, employees in a high LMX tend to demonstrate higher performance to repay their obligations to the leader.

Supervisor POS as a Moderator of the LMX and Job Satisfaction Relationship Social exchange theory states that in a high-quality exchange, parties provide valuable assets to each other (Blau, 1964). Given that leaders differ in what they can provide to their subordinates, the differential ability of leaders to supply valuable resources and positive experiences to members should be considered when examining the LMX–job satisfaction relationship. Some exchanges may provide only intangible benefits, such as understanding and friendliness. These intangible benefits tend to be a part of most leader–subordinate exchanges. Even in the absence of tangible benefits, a high-quality relationship is valuable and is related to employee well-being (Epitropaki & Martin, 1999, 2005). However, in other exchanges, the leader has opportunities to provide more tangible benefits as well, such as successfully defending the employee toward superiors, protecting the employee from unfairness, mobilizing organizational resources for the employee, or exposing the employee to special assignments. In these types of exchanges, leaders have the potential to create a very positive environment for high LMX members, strengthening the LMX–job satisfaction relationship. Leaders who have a high-quality exchange with the organization, or those who have high POS, should be in a better position to benefit their high LMX subordinates. High POS is the belief that the organization is willing to help, support, and reward them (Eisenberger, Huntington, Hutchison, & Sowa, 1986). POS develops as a result of how the organization treats the individual. For example, employees who have been included in organizational decisions and recognized by upper management tend to have higher POS (Wayne, Shore, Bommer, & Tetrick, 2002). Rhoades and Eisenberger (2002) proposed that high POS would yield such benefits as access to information and other sources of help, which would facilitate one’s ability to perform a job. In sum, high POS supervisors expect that the organization will support them in their endeavors. High POS supervisors can pass these benefits to members close to them. Therefore, high LMX members should be more satisfied if their supervisor has high, as opposed to low, POS. At the same time, low LMX members reporting to a high POS supervisor will not have the same advantages, as their managers will have greater resources to withhold and the capacity to provide more negative experiences. Hence, low LMX should correspond to even lower levels of job satisfaction if the supervisor has high, as opposed to low, POS. In other words, the relationship between LMX and job satisfaction will be steeper (more positive) for members reporting to high POS supervisors. Hypothesis 1: Supervisor’s POS will moderate the relationship between subordinate LMX and job satisfaction such that subordinate LMX and job satisfaction will be more positively related when the supervisor’s POS is high as opposed to when it is low.

SUPERVISOR POS AS A MODERATOR OF EMPLOYEE LMX

Supervisor POS as a Moderator of the LMX and Job Performance Relationship The relationship between LMX and job performance can be explained at least partly by the norm of reciprocity (Gouldner, 1960). As noted earlier, in a high LMX relationship, members receive tangible and intangible benefits from the supervisor. These benefits create an obligation to reciprocate on the part of subordinates, leading to high performance. On the basis of the norm of reciprocity (Gouldner, 1960), individuals who receive greater resources from their exchange partners will feel more indebted toward them. They will dismiss their obligations by providing favors in greater frequency. If the members fail to reciprocate, they run the risk that some of the benefits derived from the relationship will be discontinued (Emerson, 1976). High LMX members will be under a greater obligation to reciprocate when their supervisors have high POS. When supervisors are supported by the organization, they will be able to benefit their high LMX members more. For example, a high POS supervisor may decide to sponsor an idea generated by a high LMX member. This is likely because high POS supervisors believe that their actions have greater chances of being rewarded by the organization (Eisenberger et al., 1986; Eisenberger, Rhoades, & Cameron, 1999). Moreover, the idea may be received more favorably at upper levels because high POS supervisors receive recognition from superiors (Wayne et al., 2002). As a result of these and other benefits, the norm of reciprocity will encourage employees to respond with higher performance. For low LMX members, we did not expect differences between those reporting to high POS and low POS supervisors. Low LMX members are not likely to receive many benefits from either a high or low POS supervisor; therefore, there should be no differences in the level of performance they would demonstrate. In both cases, low LMX members are likely to demonstrate the minimum level of performance they can before they start seeing negative repercussions. Thus, we expected LMX quality to be more positively related to job performance for those reporting to high POS supervisors than for those reporting to low POS supervisors. Hypothesis 2: Supervisor’s POS will moderate the relationship between subordinate LMX and job performance such that subordinate LMX and job performance will be more positively related when the supervisor’s POS is high as opposed to when it is low.

Method Procedure We collected data from subordinates and supervisors working in all six stores of a grocery store chain in the northwestern United States. Data were collected on-site in each store on company time. To motivate participation, we entered the names of all respondents into a raffle to award six $50 gift certificates from a merchant of their choice. All subordinates and supervisors were informed of the study through company management and were invited to sign up for one of the three data collection meetings scheduled in each store. When subordinates and supervisors showed up for these meetings, we explained the study procedures and assured them that the responses were confidential. All respondents (employees and

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supervisors) were asked to put their names on the surveys to facilitate matching of the surveys. We gave subordinates a survey assessing their LMX quality, job satisfaction, as well as demographic variables. Supervisors received two different surveys. One of these surveys contained questions assessing supervisor POS. Supervisors completed this survey on-site in a separate room. The second supervisor survey assessed each subordinate’s job performance. As this survey was more time consuming for supervisors who had multiple subordinates reporting to them, we left stamped, self-addressed envelopes with supervisors and asked them to return the surveys via postal mail. We received these surveys 2– 4 weeks after data collection dates. We also left blank surveys and stamped envelopes for those who did not come to one of the scheduled data collection times. Finally, we sent a reminder survey to all subordinates and supervisors following data collection.

Sample All subordinates and supervisors working in the organization (377 subordinates and 59 supervisors) were invited to participate in the study. A total of 267 subordinates and 54 supervisors returned completed surveys, with response rates of 71% and 92%, respectively. Store-level response rates ranged between 62% and 76% for the six stores. After dropping those subjects for whom we did not have all surveys or surveys with missing data, we conducted our analyses on 210 subordinates and their respective 38 supervisors. The sample of 210 subordinates consisted of 46% men and 69% full-time subordinates. On average, subordinates had 16 years of work experience, of which they had spent an average of 4.71 years in the current organization. Of these subordinates, 10% did not have a high school diploma, 55% held a high school diploma, 8% had completed a professional training program, 16% held a 2-year degree, and the remainder held bachelor’s or graduate degrees. Subordinates held job titles such as courtesy clerk, checker, deli worker, floral designer, bakery clerk, and meat cutter. The 38 supervisors whose responses we used in our analyses were 68% men, worked full time, and worked in the current organization for an average of 9.08 years. Of the supervisors, 56% held a high school diploma, 6% had completed a professional training program, 20% held a 2-year degree, and the remainder held a bachelor’s degree.

Comparison of Respondents and Nonrespondents We compared the 210 subordinates with the cases we dropped because of missing data. The 210 cases we used did not differ from the 57 cases we did not use because of missing performance information with respect to LMX, employee demographics, or job satisfaction. The only significant difference we observed was for job performance, t(303) ⫽ 2.19, p ⬍ .05, such that respondents were slightly higher performers than nonrespondents (M ⫽ 5.73 for respondents and 5.48 for nonrespondents). A dummy variable for respondent/nonrespondent explained only 1.6% of the variation in job performance. Finally, the 38 supervisors whose responses we used did not differ from the 15 supervisors whose responses we could not use with respect to POS, span of control, or demographic variables. These results suggested that response–nonresponse bias was not a serious problem.

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Measures Subordinates and supervisors used a 7-point scale (1 ⫽ strongly disagree, 7 ⫽ strongly agree) to answer all questions. LMX. Subordinates reported the quality of the exchange between themselves and their supervisor using the 12-item multidimensional LMX scale developed by Liden and Maslyn (1998). Liden and Maslyn showed that the four dimensions of this scale (affect, professional respect, loyalty, and contribution) loaded on a second-order factor and suggested that the scale could be used to measure overall LMX, as well as its four dimensions. Sample items are “I like my manager very much as a person,” “I am impressed with my manager’s knowledge of his/her job,” “My manager would come to my defense if I were attacked by others,” and “I do not mind working my hardest for my manager.” The scale has been used in several studies to measure overall LMX quality (e.g., Bauer et al., 2006; Kraimer et al., 2001; Wang et al., 2005) and is viewed as one of two LMX scales having undergone adequate psychometric testing to show reliability and validity (Schriesheim, Castro, & Cogliser, 1999). Consistent with prior research, in a confirmatory factor analysis (CFA), the four factors of the scale loaded on a second-order factor, ␹2(547, N ⫽ 210) ⫽ 935.14, p ⬍ .01, comparative fit index (CFI) ⫽ .92, nonnormed fit index (NNFI) ⫽ .91, root-mean-square error of approximation (RMSEA) ⫽ .06. Thus, we aggregated all items to measure overall LMX (␣ ⫽ .95). Job satisfaction. Subordinates reported their level of job satisfaction using the three-item measure developed by Hackman and Oldham (1980). A sample item is “Generally speaking, I am very satisfied with this job” (␣ ⫽ .89). Job performance. Supervisors rated the job performance of subordinates reporting to them using the seven-item in-role performance measure by Williams and Anderson (1991). A sample item is “[Subordinate] adequately completes assigned duties” (␣ ⫽ .92). Supervisor POS. Supervisors reported the level of support they receive from the organization using the eight-item short version of the Survey of Perceived Organizational Support originally developed by Eisenberger et al. (1986). The items we used were reported in Lynch, Eisenberger, and Armeli (1999). A sample item is “My organization is willing to help me when I need a special favor” (␣ ⫽ .88). Control variables. We controlled for several variables to rule out alternative explanations. We controlled for employee gender (1 ⫽ male, 0 ⫽ female), employee tenure (number of years spent in the organization), and employment status (1 ⫽ full-time employee, 0 ⫽ part-time employee) because these could be related to employee satisfaction and performance, as well as expectations from supervisors. In addition, we controlled for supervisor’s organizational level. The majority of the supervisors supervised different departments. However, there were six store managers and one director of operations in our sample. Store managers supervised employees who were not supervised by any of the department managers, such as employees who moved across departments and those with supervisory titles without any supervisory duties (such as wine supervisors). The director of operations supervised three employees, including an office assistant, a trainer, and an employee who was based in one store but did some work in other stores as well. Because reporting to a higher level supervisor could

be more satisfying, we controlled for supervisors’ organizational level (1 ⫽ store manager or director of operations, 0 ⫽ other supervisory role). We also controlled for supervisor’s span of control. The number of employees reporting to each supervisor varied substantially (range ⫽ 1–37, average ⫽ 8.18) and could be related to LMX quality (Green, Anderson, & Shivers, 1996) or other outcomes. Finally, we examined whether we should control for store. Participants worked in one of six stores of the chain. Stores could have different climates, affecting study variables. We examined whether the store variable was related to any of the study variables using one-way analyses of variance (ANOVAs). We found that store was significantly related to job performance, F(5, 204) ⫽ 3.49, p ⬍ .01. Post hoc analyses using Tukey’s test showed that the significant differences among stores were due to differences between Store 1 and the others. On the basis of these results, we created a dummy for Store 1 and controlled for it in all analyses (Store 1 ⫽ 1, all others ⫽ 0).

Results Means, standard deviations, and correlations among variables are presented in Table 1. Before we tested our hypotheses, we examined the discriminant validity of our measures. LMX and job satisfaction had a relatively high correlation; therefore, it was important to examine the validity of treating these as separate constructs. We conducted a CFA specifying separate factors for LMX, job satisfaction, and job performance. The results indicated that this factor structure fit the data well, ␹2(202, N ⫽ 210) ⫽ 330.22, p ⬍ .01, CFI ⫽ .96, NNFI ⫽ .95, RMSEA ⫽ .06. Moreover, we calculated Fornell and Larcker’s (1981) ␳vc(␩) coefficient as another test of discriminant validity. According to Fornell and Larcker, evidence for discriminant validity exists if the average amount of variance accounted for in each of the indicators by its latent construct (␳vc(␩)) is greater than the amount of variance the construct shares with other constructs. The average variances extracted in LMX, job satisfaction, and job performance were .73, .74, and .65, respectively. The largest squared intercorrelation between latent variables was the one between LMX and job satisfaction, which was .22. These results provided support for the discriminant validity of our measures. We tested our hypotheses using hierarchical linear modeling (HLM). HLM is particularly suitable to test cross-level relations when individual data are nested within groups (Bryk & Raudenbush, 1992). This was true of our sample, in which supervisors had an average span of 8.18 employees. Using HLM to test cross-level interactions is superior to using ordinary least square (OLS) regression because including individuals from the same group violates regression assumptions and underestimates standard errors of group-level variables, leading to the overestimation of relations (Bryk & Raudenbush, 1992; Hofmann & Gavin, 1998). In HLM, cross-level moderating effects are tested using a slopes-asoutcomes model (Snijders & Bosker, 2003). In this model, we treated the regression slopes of LMX to satisfaction and LMX to performance as dependent variables. If the Level 2 variable (supervisor POS) is significantly related to the slope, then a crosslevel interaction hypothesis is supported. A positive coefficient suggests that the relation between LMX and outcomes is stronger as a function of the Level 2 predictor, whereas a negative coefficient indicates that the relation is weaker.


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Table 1 Means, Standard Deviations, and Intercorrelations Among Variables Variable 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

M

Leader-member exchange Job satisfaction Job performance Supervisor perceived organizational support Employee gender Employee tenure Employment status Supervisor organizational level Supervisor span of control Store 1

5.39 5.21 5.73 5.58 .46 4.71 .69 .18 8.18 .09

SD

1

1.26 — 1.52 .43** .89 .14* .90 .04 .50 .18** 5.12 ⫺.04 .46 .00 .39 .09 8.21 ⫺.01 .29 ⫺.06

2

3

4

5

— .05 .02 .02 .10 .01 ⫺.01 ⫺.06 .00

— .32** .08 .15* .14* .05 .06 ⫺.23**

— .06 ⫺.01 .07 .28 .26 ⫺.39**

6

— ⫺.01 — .08 .24** .07 .13 .12 ⫺.11 ⫺.14 .05

7

8

9

— .17* ⫺.19** ⫺.13

— .05 ⫺.08

— ⫺.14*

Note. n ⫽ 210. The correlations between supervisor-level variables (Variables 4, 8, and 9) and individual-level variables were calculated by assigning the same score to all employees reporting to the supervisor with a sample size of n ⫽ 210. The intercorrelations between two supervisor-level variables were calculated at the supervisor level with a sample size of n ⫽ 38. Employee gender was coded as 1 ⫽ male, 0 ⫽ female; employment status was coded as 1 ⫽ full-time employee, 0 ⫽ part-time employee; supervisor organizational level was coded as 1 ⫽ store manager or director of operations, 0 ⫽ other supervisory role; Store 1 was coded as 1, 0 ⫽ all other stores. * p ⬍ .05. ** p ⬍ .01.

variance. As they cautioned, a random effects ANOVA procedure in HLM demonstrated that there was significant between-groups variance in LMX, ␶00 ⫽ .42, ␹2(37, N ⫽ 38) ⫽ 98.61, p ⬍ .01, intraclass correlation (1) ⫽ .25. Thus, following Hofmann and Gavin’s suggestions, we entered LMX after centering it by group mean at Level 1 and added average LMX as well as average LMX ⫻ Supervisor POS to Level 2 equations. Finally, we entered supervisor POS as a predictor of the Level 2 intercept as well as the slope. The ␥ coefficient between supervisor POS and the LMX outcome slope provided the test of our hypotheses. As indicated in Table 2, supervisor POS was significantly re-

In both HLM analyses, we entered the Level 1 control variables (employee gender, tenure, and employment status) as well as Level 2 controls (supervisor organization level, span of control, and Store 1) after centering them by grand mean. According to Hofmann and Gavin (1998), centering variables effectively controls for them and helps deal with multicollinearity at Level 2. The only exception to this centering decision was LMX. Hofmann and Gavin cautioned that, in cross-level interaction models, centering the variable to be moderated (LMX) by grand mean leads to interpretation difficulties and could lead to spurious interactions if the variable to be moderated has between-groups and within-group

Table 2 Slopes-as-Outcomes Model in Hierarchical Linear Modeling Hypothesis 1: job satisfaction Variable Intercept (␤0) Intercept (␥00) Supervisor organizational level (␥01) Supervisor span of control (␥02) Store 1 (␥03) Supervisor POS (␥04) Average individual LMX (␥05) Individual LMX ⫻ Supervisor POS (␥06) Employee gender (␤1) Intercept (␥10) Employee tenure (␤2) Intercept (␥20) Employment status (␤3) Intercept (␥30) LMX (␤4) Intercept (␥40) Supervisor POS (␥41)

Hypothesis 2: job performance

Coefficient

SE

t ratio

Coefficient

SE

t ratio

5.27 ⫺.19 ⫺.00 .00 ⫺.14 .20 .03

.09 .15 .00 .15 .65 .55 .11

58.38** ⫺1.30 ⫺.55 .03 ⫺.22 .35 .33

5.67 ⫺.19 ⫺.00 ⫺.31 .17 ⫺.18 .03

.11 .15 .00 .40 .86 .99 .16

51.30** ⫺1.25 ⫺1.09 ⫺.78 .20 ⫺.19 .23

⫺.17

.17

⫺.96

.03

.07

.45

.03

.00

3.71**

.02

.00

3.60**

.07

.20

.39

.09

.15

.63

.61 .24

.09 .09

6.36** 2.50*

.09 .14

.03 .05

2.58* 2.75*

Note. Level 1 n ⫽ 210; Level 2 n ⫽ 38. Employee gender was coded as 1 ⫽ male, 0 ⫽ female; employment status was coded as 1 ⫽ full-time employee, 0 ⫽ part-time employee; supervisor organizational level was coded as 1 ⫽ store manager or director of operations, 0 ⫽ other supervisory role; Store 1 was coded as 1, 0 ⫽ all other stores. LMX ⫽ leader-member exchange; POS ⫽ perceived organizational support. * p ⬍ .05. ** p ⬍ .01.

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lated to the LMX–job satisfaction slope in the expected direction, ␥41 ⫽ .24, t(36) ⫽ 2.50, p ⬍ .05. We plotted the significant interaction following the procedure illustrated by Cohen, Cohen, West, and Aiken (2003). Specifically, we plotted the HLM equation at conditional values of supervisor POS (1 SD above and below the mean). As presented in Figure 1, at high levels of supervisor POS, the relationship between LMX and job satisfaction was stronger than at low levels of supervisor POS. The residual variance of the LMX–job satisfaction slope was not significant, indicating that most of the meaningful Level 2 variation in the LMX–job satisfaction slope had been explained by this model, U4 ⫽ .13, ␹2(13, N ⫽ 38) ⫽ 15.44, p ⬎ .05. We also calculated pseudo-R2 for the Level 2 slope model. This statistic reflects what percentage of slope variance is explained by the cross-level interaction term. Comparing the residual variance of the current model with a model that did not contain the cross-level interaction term of supervisor POS (Hofmann, 1997), we found that supervisor POS explained 71% of the group-level variance in the LMX–job satisfaction slope. The results reported in Table 2 also provided support for Hypothesis 2. Supervisor POS was significantly and positively related to the LMX–job performance slope, ␥41 ⫽ .14, t(36) ⫽ 2.75, p ⬍ .05. As shown in Figure 2, the relationship between LMX and job performance was positive only when supervisors had high levels of POS. The residual variance component for the LMX–job performance slope was no longer significant in the final model, U4 ⫽ .01, ␹2(13, N ⫽ 38) ⫽ 17.55, p ⬎ .05. We compared the residual variance of the current model with a model that did not contain supervisor POS as a predictor of the slope and found that supervisor POS explained 88% of the variance in the LMX–job performance slope. We also tested our hypotheses using an OLS approach to examine whether the use of HLM as opposed to OLS led to a change in the interpretation of our findings. Furthermore, Hofmann, Morgeson, and Gerras (2003) contended that, even though the parameter estimates obtained from OLS would be biased, the R2 obtained from an OLS approach could still be useful as an effect size estimate. The pseudo-R2 produced by HLM refers to the percentage of between-groups slope variance attributed to the cross-level interaction. Therefore, this R2 is not comparable to the effect sizes usually observed in the literature. To meet these

Figure 1. Supervisor perceived organizational support (POS) as a moderator of the leader–member exchange–job satisfaction relationship.

Figure 2. Supervisor perceived organizational support (POS) as a moderator of the leader–member exchange–job performance relationship.

objectives, we assigned each supervisor’s POS score to all subordinates reporting to a supervisor and tested our hypotheses using OLS. The pattern of the results did not change when we used an OLS approach. Furthermore, the interaction term of employee LMX and supervisor POS explained 1.4% of the variation in job satisfaction and 3% of the variance in job performance.

Discussion The principal finding of our study was the degree to which supervisor POS was a moderator of LMX, job satisfaction, and job performance relationships. We were motivated by social exchange theory premises for our study. Specifically, exchanges are positively connected if a person receives resources from one exchange and shares them with others in a different exchange (Molm et al., 2001). Applying this principle, we predicted that supervisors would have more to offer to subordinates if they had a high-quality exchange with the organization or high POS. Thus, the links between LMX, satisfaction, and performance would be enhanced when supervisors had high POS. We found support for both of our hypotheses in a large retail sample. These findings make several important contributions to the literature. Our first contribution is that, consistent with Sias (1996) as well as Sparrowe and Liden (1997), we found that a person’s upward and downward exchanges are interconnected. More specifically, leaders’ exchanges with the organization affect their exchanges with subordinates. Thus, LMX researchers may benefit from broadening their focus to include the dyad members’ other exchange partners to better understand what happens in the focal exchange. Supervisors with high POS should be in better positions to provide tangible benefits, which strengthens the degree to which LMX is related to satisfaction. Moreover, on receiving greater benefits, high LMX members should develop a greater obligation to reciprocate, leading to a stronger link between LMX and performance. As expected, supervisor POS affected high and low LMX members differently. Moreover, for job satisfaction and job performance, the nature of the moderation was slightly different. High LMX members were more satisfied, but low LMX members were least satisfied with their jobs when their supervisor had high POS. High POS supervisors may provide more information, resources, and other tangible benefits to high LMX members, leading to higher satisfaction. At the same time, they may choose to withhold


resources from low LMX members or create a more negative environment for them, leading to lower satisfaction for those members. Job performance demonstrated a slightly different pattern. Specifically, there were differences in the performance levels of high LMX members only. Low LMX members demonstrated the same level of performance under high and low POS supervisors. High LMX members are likely to receive more benefits from high POS supervisors and will be under a greater obligation to reciprocate (Emerson, 1976; Thibaut & Kelley, 1959). Therefore, the performance of high LMX members was higher when supervisors had high POS. For low LMX members, performance was low regardless of supervisor POS. Low LMX members are likely to demonstrate the lowest performance they can get away with before seeing negative consequences. Therefore, we did not expect low LMX members to lower their performance on the basis of supervisor POS. These differential findings show that how supervisors’ exchanges trickle down to affect lower level employees depends on the employee’s LMX level, as well as the attitude or behavior in question. Our second contribution was to add to the growing number of studies examining the moderators of LMX. As noted earlier, LMX literature has been criticized for not paying attention to moderators (e.g., Erdogan & Liden, 2002; House & Aditya, 1997; Schriesheim et al., 2000). We found that even though the relationship between LMX and job satisfaction was positive, the strength of the relationship varied depending on supervisor POS. LMX had a moderate positive relationship with job satisfaction when supervisors had low POS. Even more interesting was the LMX–performance relationship. We found that LMX was not related to job performance when supervisors had low POS. This finding is consistent with other studies that found that moderators such as high role ambiguity (Dunegan, Uhl-Bien, & Duchon, 2002) and high extraversion (Bauer et al., 2006) neutralized the LMX–performance relationship. With these studies, our study shows that LMX is sometimes not related to job performance at all. It seems that continued attention to moderators is warranted. Ignoring the moderating effect of supervisor POS would lead to overestimating the relationship for some dyads and underestimating it for others. The finding that when supervisors have low POS LMX was not related to job performance requires further investigation. Most LMX studies have shown that high LMX is related to high job performance. So why would members not reciprocate via high performance when supervisors have low POS? One explanation could be that when supervisors have low POS, members choose alternative ways to reciprocate. A low POS supervisor would have limited attachment to the organization (Eisenberger, Fasolo, & Davis-LaMastro, 1990) and might even demonstrate behaviors that would harm the organization (Liao, Joshi, & Chuang, 2004). These tendencies are likely to trickle down to the supervisor’s high LMX members. Thus, high LMX members reporting to low POS supervisors may reciprocate by demonstrating behaviors that solely benefit the supervisor and not the organization. It seems that we need more studies to explore the types of behaviors that follow LMX when supervisors have low POS. Our results also have interesting implications for the POS literature. Thus far, the POS literature has focused on how employees respond to receiving support from the organization (Rhoades & Eisenberger, 2002). Our study is the first to show that organiza-

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tional support has effects that go beyond the support recipient. Because of supervisors’ critical position in the organization as links between subordinates and organizational objectives, supervisor POS affects not only their own actions but their subordinates’ actions as well. Interestingly, supervisor POS was not directly related to job satisfaction or job performance. Instead, the relationship between supervisor POS and member satisfaction and performance depended on the LMX quality. This finding was to be expected because high POS merely suggests that supervisors have more things to exchange with members. There is little reason to expect that supervisors will distribute their resources uniformly to all members. Instead, high LMX members would be in a better position to benefit from them. Even though the nature of this influence is indirect, supervisor POS seems to be an important variable that deserves continued attention.

Practical Implications Studies on LMX theory suggest that LMX is a key variable in explaining employee attitudes and behaviors. The natural recommendation of this line of research is the encouragement of supervisors to form high LMXs with subordinates (Graen & Uhl-Bien, 1995). However, ensuring that supervisors have high LMXs with members may not necessarily lead to high levels of subordinate job satisfaction or performance. Our study shows that for high satisfaction and performance, two conditions are necessary: Leaders should strive to build high-quality relations, and the organization should make sure that leaders feel that they are supported from above. When both conditions are present, leaders are in the best position to provide positive experiences to members, and members are under the greatest obligation to reciprocate. Our findings indicate a potential way in which organizations may benefit from the findings of LMX theory. LMX tends to develop as a result of factors beyond the organization’s control, such as perceived similarity (Liden, Wayne, & Stilwell, 1993) and initial actions of the member (Bauer & Green, 1996). Our study shows that organizations can enhance the ability of leaders to affect member satisfaction and performance by supporting supervisors. Organizations could increase supervisor POS by treating supervisors fairly (Masterson et al., 2000), providing favorable job conditions (Rhoades & Eisenberger, 2002), and rewarding their performance (Rhoades, Eisenberger, & Armeli, 2001). Supervisors who feel supported by the organization will be able to help their subordinates more effectively, satisfying and motivating them. At the same time, organizations should be aware of the negative situation of low LMX members reporting to high POS supervisors. It seems that not getting along with certain supervisors will have a much stronger negative effect on member satisfaction. The organization may make it possible for these members to move around the organization when possible. Given that low LMX members will face greater challenges when they report to high POS supervisors, the organization may want to protect low LMX members if the relationship quality is low.

Potential Limitations and Future Research Directions We attempted to minimize common method bias by following design remedies suggested by Podsakoff, MacKenzie, Lee, and Podsakoff (2003). Specifically, we gathered data from multiple

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sources (subordinates and supervisors) and used different measurement techniques (supervisors’ reported POS and subordinate performance in different surveys and at different times). Despite our attempts, there were variables subject to common method bias; namely, LMX and job satisfaction were collected from subordinates in a single survey. Even though we took precautions against the effects of common source bias, we cannot completely rule out its influence over the results. At the same time, even if common source bias were present to a certain degree, it is unlikely to provide an explanation for our findings. Common source bias reduces the power to detect significant interactions (Evans, 1985). Therefore, we feel confident that the significant interactions we have observed are unlikely to be a result of common method bias. One of the design choices we made was to measure LMX from the employee’s perspective. Gerstner and Day (1997) recommended that more studies should measure LMX from both perspectives. We had three reasons for using the employee’s perspective. First, Gerstner and Day reasoned that employees and supervisors might define high LMX differently. They recommended that researchers develop separate measures of supervisor perceptions of LMX. Unfortunately, no such measure exists at this time. Second, the employee’s perspective was more relevant for our theory. Employees should be satisfied and reciprocate with performance when they themselves perceive their LMX is of high quality. Finally, we wanted to minimize the cognitive load supervisors would face by keeping their surveys brief. At the same time, we recognize that because of our use of the employee’s perspective, our findings may not generalize to LMX measured from a supervisor’s perspective. The problem of generalizability poses another potential limitation. The retail industry is perceived as one that employs lessskilled workers (Hristov & Howard, 2004). Moreover, food industry workers perform monotonous jobs, have little job security, and have low levels of salaries (Harenstam et al., 2003). Therefore, generalizing the findings from the retail sector to other industries that use more skilled and highly educated labor may be misleading. At the same time, studying food retail employees is important because of the importance of this sector to the United States and the world economy. The U.S. Bureau of Labor Statistics (2006) has predicted that growth in overall employment by the year 2014 will come primarily from growth in service-sector jobs. The fact that grocery stores cannot be “off-shored” supports the notion that service-sector positions in food retailing will continue to be an important employment pool. Therefore, research on this population of workers is warranted and important. When developing our hypotheses, we relied on a mechanism that we did not directly measure. We predicted that supervisor POS would enhance the resources supervisors may provide to members. However, we did not measure the actual resources exchanged in the relationship. The resources exchanged in a relationship are likely to be fluid and differ across dyads. Because of the variability of resources that may be exchanged in high LMX relationships, we did not attempt to directly capture what is exchanged in the relationship. However, an important extension of our study would be to directly examine the mediating variables. Future research may also benefit from examining other exchanges supervisors form in the organization as a moderator of their downward LMXs. As an example, Sparrowe and Liden (1997) noted the importance of integrating social network vari-

ables to the LMX literature. The position of the leader in the social network may act as a moderator of the relationship between LMX, satisfaction, and performance. Network centrality, or the degree to which an individual is connected to others, has been identified as a critical structure variable predicting employee performance (Sparrowe, Liden, Wayne, & Kraimer, 2001). We focused on supervisor POS as the moderator because we felt that the relationship between supervisors and the organization was a key exchange that would affect employees reporting to the supervisor. However, network methodology may provide an interesting extension of our findings. In conclusion, we predicted and found that the level of support supervisors receive from the organization will act as an enhancer of the relationship between LMX, job satisfaction, and job performance. LMX is more strongly related to job satisfaction and job performance to the degree to which supervisors feel they are supported by the organization. It seems that we need to continue to examine supervisors’ upward exchanges as an enhancer and neutralizer of their exchanges with lower level employees.

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Received August 19, 2005 Revision received March 27, 2006 Accepted April 3, 2006 䡲