Leader-Member Exchange and Job Satisfaction Bond and Predicted Employee Turnover

By Mardanov, Ismatilla T.; Heischmidt, Kenneth et al. | Journal of Leadership & Organizational Studies, November 2008 | Go to article overview

Leader-Member Exchange and Job Satisfaction Bond and Predicted Employee Turnover


Mardanov, Ismatilla T., Heischmidt, Kenneth, Henson, Amy, Journal of Leadership & Organizational Studies


Results of hypotheses testing using the Leader-Member Exchange (LMX) scale and the Minnesota Satisfaction Questionnaire (MSQ) indicate that 7 out of 12 LMX measures (explaining 98% of the variance) and 6 out of 20 MSQ measures (explaining 71%-79% of the variance) were positive and significant. Satisfaction with supervision had a significant impact on job satisfaction, explaining 80.7% of the variance. In the near future, employee job satisfaction is predicted to be lower than satisfaction with supervision, due to absence of strong intrinsic motivation. Testing hypotheses on these scales also helped predict future employee turnover in the banking industry.

Keywords: leader-member exchange; satisfaction with supervision; job satisfaction; leadership; turnover

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It has been reported that in the United States 77% of employees are unhappy with their current jobs (Lussier & Achua, 2004). Job satisfaction is the outcome of two types of factors: "intrinsic" and "extrinsic" (Herzberg, 1968). Supervisory leadership is one of the extrinsic factors that have a significant impact on employee work attitudes. A leader's positive attitude toward members improves employee attitudes toward work, their leader, and the organization. In turn, members develop intrinsic motivation. A good match between intrinsic and extrinsic motivation results in job satisfaction. The quality of the leader-member exchange (LMX; Liden & Maslyn, 1998; Morrow, Suzuki, Crum, Ruben, & Pautsch, 2005) in this process is critical for organizational success. A poor relationship between leaders and members can cause employees to lose commitment to or satisfaction with their jobs. Turnover experts, both academic and practitioner, have asserted that supervision plays a meaningful role in employee turnover decisions (Maertz & Griffeth, 2004; Morrow et al., 2005).

It is hypothesized that the relationship formed between management and employees and particularly the quality of the LMX relationship have a direct effect on employees' job satisfaction. The aim of this study is to demonstrate a stronger bond between LMX and employee job satisfaction. This study also tries to predict employee turnover based on bad-quality LMX and job dissatisfaction in the banking industry. This study identifies the most significant LMX factors that have a strong impact on overall satisfaction with supervision. This research also identifies predicted level of employee turnover due to low-quality LMX. The same method is used to test the level of job satisfaction. This study tests a model to identify significant intrinsic and extrinsic motivation factors (Herzberg, 1968) that have a strong impact on job satisfaction. Low intrinsic and extrinsic motivation, bad-quality LMX (Morrow at al., 2005), and other motivational forces (Maertz & Campion, 2004) contribute to intention to quit (employee turnover). This research also predicts employee turnover based on job dissatisfaction.

Higher job satisfaction is associated with satisfaction with supervision, but it is possible that high-quality LMX may not be powerful enough to make employees satisfied with their jobs. Even if the quality of LMX is high, other intrinsic and extrinsic factors may contribute to overall job dissatisfaction. Analysis of LMX and job satisfaction in the banking industry suggests that satisfaction with supervision is positively associated with job satisfaction and has a significant impact on it, whereas most intrinsic and extrinsic motivation factors do not contribute to job satisfaction.

In the next section, there is a review of literature on LMX, job satisfaction, and employee turnover that supports the hypotheses that LMX and the Minnesota Satisfaction Questionnaire (MSQ) are applicable to the banking industry. It is also hypothesized that satisfaction with supervision has a significant impact on job satisfaction. In addition, it is hypothesized that low-quality LMX positions subordinates the out-group. …

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