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Mutual Benefits: Delving into Leader-Member Exchange (LMX) and Pay Dynamics with Social Exchange Theory

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Abstract

The global workforce, post-COVID-19, grapples with challenges like burnout, high turnover, and pay disparities, intensifying the need for transparent pay communication. Leader-member exchange (LMX), a concept denoting the relationship quality between a leader and subordinate, plays a pivotal role in this scenario. This study delves into the moderating effects of LMX on the relationship between perceptions of pay communication and pay and job satisfaction. Using a sample of general workers (n = 396) across various industries through a two-time survey, the evaluation via partial least squares structural equation modeling (PLS-SEM) revealed that while transparent pay communication boosts pay satisfaction, it does not necessarily enhance job satisfaction. However, high-quality LMX relationships can amplify pay satisfaction. The authors discuss the implications of these findings, offer managers insights, and suggest future research directions.

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Data availability

The data that support the findings of this study are available from the corresponding author upon reasonable request.

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All co-authors have seen and agree with the contents of the manuscript and there is no financial interest to report.

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Authors and Affiliations

  1. Brooklyn College, New York, NY, USA

    Krystle Gale March & Matthew J. Aplin-Houtz

  2. College of Business Administration, University of Missouri Saint Louis, St. Louis, Missouri, USA

    Matthew J. Aplin-Houtz, Emily N. Lane & John Meriac

  3. North-West University, Potchefstroom, South Africa

    Ugwu E. Lawrence

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  1. Krystle Gale March
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March, K.G., Aplin-Houtz, M.J., Lawrence, U.E. et al. Mutual Benefits: Delving into Leader-Member Exchange (LMX) and Pay Dynamics with Social Exchange Theory. Employ Respons Rights J (2023). https://doi.org/10.1007/s10672-023-09490-1

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