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Leader-member exchange level and differentiation: the roles of interpersonal justice climate and group affective tone.

The role of leaders in managing team members' emotions is crucial and necessary to elicit positive and productive attitudes and behavior from them, thus leading to higher performance (George, 2000; Sy, Cote, & Saavedra, 2005). Previous researchers have demonstrated that leaders have a great influence on team members' affective experiences, as leader emotional expression can shape group affective tone (Erez, Misangyi, Johnson, LePine, & Halverson, 2008; Sy et al., 2005). We suggest that, in addition to the direct contagion effect of leader emotion, employees' perception of the leader-member exchange (LMX) relationship (Graen & Uhl-Bien, 1995) at the team level, the overall level of LMX, and the differentiation of LMX (LMX-D; Liden, Erdogan, Wayne, & Sparrowe, 2006) within a team can be important sources of group affective tone.

Group affective tone, defined as the "consistent or homogeneous affective reactions within a group" (George, 1990, p. 108), reflects the relatively stable properties of teams or the more dynamic processes of emotional contagion that can occur at both the subconscious and conscious levels in a team (Barsade, 2002; Sy et al., 2005; Totterdell, Wall, Holman, Diamond, & Epitropaki, 2004). Kozlowski and Klein (2000) described group affective tone as emergent, in that it "originates in the cognition, affect, behaviors, or other characteristics of individuals, is amplified by their interactions, and manifests as a higher-level collective phenomenon" (p. 55). Following their approach, we suggest that LMX level and LMX-D, which reflect the cognition of team members' interaction with a leader, can be the key source of the teams' emotional experience and that this can be amplified by the dynamics of leader-member interaction, resulting in the group's affective tone.

LMX refers to the attributes of a leader-member relationship, such as mutual respect, trust, and loyalty (Graen & Uhl-Bien, 1995). LMX level is the average of each team member's rating of the quality of their relationship with the team leader. Higher-level LMX indicates that the leader and members show a high level of support and loyalty at the team level. Although team-level LMX may weaken the dyadic feature of the LMX construct, it still delivers important information on the team leader's behavior and the nature of team dynamics. Furthermore, at the team level, a high-quality exchange relationship with the leader, namely, higher-level LMX, can be a common affective event (Collins, Lawrence, Troth, & Jordan, 2013) for team members. Therefore, we proposed the following hypothesis:

Hypothesis 1: Higher-level LMX at the team level will be positively associated with positive group affective tone.

We suggest that interpersonal justice climate, a linking mechanism for positive affective tone at the team level, will have a mediating role in the relationship between LMX level and positive group affective tone. Interpersonal justice climate reflects team members' perception of whether they are treated fairly by their leader, and reflects sensitivity dimensions (Greenberg, 1990) that are consistent with Bies and Moag's (1986) respect and propriety criteria (Colquitt, 2001). According to Bies and Moag, team members perceive interpersonal justice when their leaders are polite (respect) and do not make improper remarks or prejudicial statements to them (propriety). In a team with high-level LMX, because members feel that these conditions are being met, a high level of interpersonal justice climate will be created and a more positive group affective tone will be established.

However, in a team with low-level LMX, because members experience a low-quality exchange relationship with the leader, they are likely to perceive interpersonal injustice, resulting in a low interpersonal justice climate. In addition, reactions to interpersonal justice perceptions will be affective, because fairness or interpersonal justice is largely affectively driven. As the experiences of fairness or unfairness are accumulated through repeated work events, team members' relationships with the leader and the quality of their exchange relationship form the interpersonal justice climate at the team level, and this affects the positive group affective tone. Therefore, we proposed the following hypothesis: Hypothesis 2: Interpersonal justice climate at the team level will mediate the relationship between LMX level and positive group affective tone.

To capture the team dynamics related to LMX, LMX-D (Liden et al., 2006) should be considered simultaneously with LMX level, as LMX-D can affect outcomes differently at the individual and team levels. LMX-D represents the degree of variability in the quality of the exchange relationships between the team leader and various team members (Liao, Liu, & Loi, 2010). However, empirical research on the role of differentiation at the team level is still limited and results are inconsistent (Le Blanc & Gonzalez-Roma, 2012; Paik, 2016). In particular, previous researchers have emphasized the importance of examining the interaction between LMX level and LMX-D at the team level. For example, they have indicated that this interaction affects team potency and team conflict (Boies & Howell, 2006), but whether this interaction leads to positive or negative effects on team outcomes has not been clearly explained.

LMX-D captures the different dynamics between teams. For example, in a team with a low level of variability in LMX quality (low LMX-D), team members experience a similar quality of relationship with their leader whether the LMX level is high or low. However, high LMX-D means a different degree of quality of relationship between each team member and the leader. Thus, interactions among team members or the perception of preferential treatment by a leader can weaken the positive effect of LMX level on positive group affective tone. High LMX-D within a team can be perceived as unfair to team members, especially for a member who has a low-quality LMX relationship. Therefore, this perception of high variability of a LMX relationship may have a negative impact on the team interpersonal justice climate, thus moderating the positive impact of LMX level on positive group affective tone. On the basis of our empirical examination of this link, the positive group affective tone emergence process places emphasis on the input roles of LMX level and LMX-D. Therefore, we proposed the following hypothesis:

Hypothesis 3: LMX-D will moderate the mediating role of interpersonal justice climate in the relationship between LMX level and positive group affective tone.


Participants and Procedure

Survey data were collected from work teams in 14 South Korean companies, with two data collection points and a 2-week interval between them. Before we conducted the survey, we queried organizations as to their groups' interest in participating. Because of this approach, the response rate was high, at 91% (80 out of 90 teams) for the first-round survey and 98% (73 out of 80) for the second-round survey. The final sample consisted of 333 full-time employees nested in 73 teams from 14 organizations, representing retail, manufacturing, finance, R&D, information technology, energy, and services industries. This diversity was intentional to avoid contextual influences specific to industry type.

The team size ranged from 2 to 14 members with an average size of 4.6 members (SD = 1.79). Of the participants, 69% were men, 97.2% had a 2-year college or higher degree, and the remainder were high school graduates. The average age was 31 years (SD = 6.15), ranging from 25 to 50 years, and the average team tenure was 3.75 years (SD = 27.3), ranging from 3 months to 17 years. The data were collected from team members in non-managerial positions.

One representative from each organization, most often a human resources manager, was informed orally of the general nature of the study and asked to inquire about team members' interest in the survey to ensure voluntary participation. A package for each work team contained one team leader questionnaire and five team member questionnaires, with extra questionnaires in case teams exceeded five members. We used the responses from team members only because the team leaders' perceptions of interpersonal justice climate can be quite different from those of team members. Each questionnaire was distributed in and returned in an envelope, and had a cover letter in which the nature of the study was explained to the participants, their anonymity and confidentiality was assured, and contact information for the researchers was included. Each organizational representative collected the completed and sealed questionnaires from each team and handed them to the researchers.

In the Time 1 survey, there were items measuring individual-level control variables, LMX measures, and team-level interpersonal justice climate. We measured positive group affective tone in the Time 2 survey to minimize common source bias. The survey items that were initially developed in English were translated into Korean using Brislin's (1986) back-translation procedure. The design of, and items for, the survey were reviewed and approved by the internal review board of the first author's affiliated institution.


LMX level. We assessed LMX quality using Liden and Maslyn's (1998) 12-item scale that comprises four dimensions: affect, loyalty, contribution, and professional respect. Participants rated the quality of LMX with their team leader by responding to the items on a 7-point scale ranging from 1 = not agree at all to 7 = absolutely agree. A sample item is "My supervisor would defend me to others in the organization if I made an honest mistake." Individual scores were calculated by averaging the responses from the 12 items. Cronbach's a for this scale was .96 for team-level scores.

LMX-D. The LMX-D score, which is the intrateam variation of LMX, was obtained by calculating the within-team variance or standard deviation of a measure of LMX (Boies & Howell, 2006; Chen, Yu, & Son, 2014; Liden et al., 2006).

Interpersonal justice climate. We measured team-level interpersonal justice climate with items based on Colquitt's (2001) four-factor model. Following the referent-shift consensus composition model (Chan, 1998), team members responded to four statements for describing interpersonal justice climate by rating them on a 5-point Likert scale ranging from 1 = to a small extent to 5 = to a large extent. A sample statement is "The following items refer to your team leader. To what extent has he/she treated you in a polite manner?"

Individual scores were aggregated to the team level, and we computed the intraclass correlation coefficient (ICC) values. The ICC(1) and ICC(2) values for interpersonal justice climate were .18 and .51, respectively, indicating construct validity and a fair degree of reliability of team-level scores. For additional support for aggregation of individual responses to the team level, we calculated interrater agreement ([r.sub.wg(j)]) values (James, Demaree, & Wolf, 1984). The average [r.sub.wg(j)] value was .76.

Positive group affective tone. To measure positive group affective tone, we used the 16-item Job Emotion Scale developed by Fisher (2000), which examines positive and negative emotions in the workplace. Participants measured the observed frequency of their fellow team members' emotional expressions by responding to the eight items for positive emotion and the eight items for negative emotion on a 5-point scale ranging from 1 = never to 5 = very often. Sample items for positive emotions are enthusiastic, proud, and enjoying something, and sample items for negative emotions are frustrated, unhappy, and disappointed. Cronbach's a for this scale was .92 for positive emotions and .91 for negative emotions. As positive group affective tone was a team-level variable, scores were calculated as the mean scores for each team. The ICC(1) and ICC(2) values for positive group affective tone were .27 and .63, respectively. Because we were researching positive group affective tone, we did not use the negative emotion items for analysis.

Control variables. Because previous researchers have indicated that individual behavior and group dynamics can be influenced by the demographic variables of gender, level of education, and organizational tenure (Podsakoff, MacKenzie, Paine, & Bachrach, 2000), we controlled for these variables. Appraisal of positive group affective tone is a complex task and has been found to be influenced by social contexts, including the group's gender ratio (Simmons, Stein, Matthews, Feinstein, & Paulus, 2006). The size of a group can also affect members' attitudes and interpersonal dynamics (Choi, 2007). Thus, the team-level control variables of team size, average education level, and gender ratio were included in the analyses.

Data Analysis

We conducted regression analysis with SPSS AMOS 22.0. We tested our hypotheses on the mediating effect of interpersonal justice climate and examined the moderated mediation model with the bootstrapping procedure proposed by Hayes (2013).


Descriptive statistics and correlations of team-level variables are presented in Table 1. To examine our hypotheses, we first analyzed the interaction between LMX level and LMX-D within a team to explain positive group affective tone. We then examined the mediating effect of interpersonal justice climate, after which we tested the moderated mediation model with LMX-D as a moderator. As shown in Step 1 of Table 2, LMX level was positively related to positive group affective tone. Thus, Hypothesis 1 was supported. In addition, in Step 4 of Table 2, LMX-D significantly moderated the mediation of interpersonal justice climate in the relationship between LMX level and positive group affective tone. Hypothesis 3 was, thus, supported. Interpersonal justice climate was positively related to positive group affective tone. The indirect effect of LMX level on positive group affective tone was still significant after controlling for interpersonal justice climate, indicating the partial mediation mechanism of interpersonal justice climate. Thus, Hypothesis 2 was supported.

To further examine the moderated mediating effect of interpersonal justice climate, we used a parametric bootstrapping procedure to estimate confidence intervals for direct and indirect effects (Hayes, 2013). Using 20,000 Monte

Carlo replications, we found that the indirect effect of LMX level at the team level on positive group affective tone through interpersonal justice climate was significant. The mediation path was significantly moderated at three levels of LMX-D (see Table 3). The patterns of this moderation, showing that low LMX-D amplifies the positive effect of LMX level on positive group affective tone, are shown in Figure 2.


Our aim in this study was to understand the team-level mechanism by which LMX level and LMX-D had an interaction effect on positive group affective tone through the mediator of interpersonal justice climate. LMX level was positively related to positive group affective tone and LMX-D moderated this effect. In addition, the relationship between LMX level and positive group affective tone was partially mediated by interpersonal justice climate and this mediation was moderated by the level of LMX-D. In examining this moderated mediation model, we found that low LMX-D was beneficial when team LMX level was high, and was detrimental when LMX level was low in terms of interpersonal justice climate and resulting positive group affective tone. In teams with low-level LMX, low LMX-D may reflect team members' perceptions of their leader's negligence and lack of concern for them, such as in the findings of Le Blanc and Gonzalez-Roma (2012). In contrast, in teams with high-level LMX, low LMX-D may reflect team members' perceptions of fair treatment, with a high level of loyalty and trust among all members.

Our results also show that when LMX level was low, positive group affective tone was higher in teams with high LMX-D than in teams with low LMX-D. This finding of the positive effect of high LMX-D when LMX level is low is consistent with Le Blanc and Gonzalez-Roma's (2012) view that for a positive outcome in a team with low-quality LMX, there should be at least a few members with a high-quality relationship with the leader.

Because we examined the team-level mechanism by which LMX level is related to positive group affective tone, with interpersonal justice climate as a mediator, there are theoretical implications in our findings. Erdogan and Bauer (2010) found that a procedural and distributive justice climate moderates the direct effect of LMX-D on negative work attitudes and behavior. Because interpersonal justice climate is directly associated with individual- and team-level member interaction with their team leader, our finding of the mediation effect of interpersonal justice climate can be understood as a process of the appraisal of legitimacy (Herdman, Yang, & Arthur, 2014) of LMX-D. Although LMX-D has beneficial effects in terms of structural and operating efficiency (Liden et al., 2006), these effects depend on the interpretation of differentiation of within-team relationship quality. In addition to contextual variables that have been previously examined, for example, task interdependency (Liden et al., 2006) and procedural and distributive justice climate (Erdogan & Bauer, 2010), in this study, the level of perceived legitimacy of LMX-D directly reflected the level of interpersonal justice climate and resulting positive group affective tone. These processes help to further explain how LMX level and LMX-D are linked to team- and individual-level performance. For example, Li and Liao (2014) found that, at the team level, LMX-D exerted a negative influence on team financial performance and strengthened the relationship between LMX level and role engagement, resulting in higher employee performance. In addition, team coordination, a team-level mediator and cross-level moderator, could be further enhanced within a high level of interpersonal justice climate. Their findings reflect another interpretation of the relationship between LMX level and LMX-D.

There are also practical implications for the interpretation of the effect of LMX-D. Team leaders should be aware that they must consider the interpersonal justice climate that is formed by their dyadic interaction with each team member. Although it is natural to have different quality relationships, the legitimacy and degree of each relationship should be of concern, because when team members perceive preferential or unfair treatment, it is likely to affect their perception of interpersonal justice and the resulting positive group affective tone.

Leaders also benefit from managing LMX-D, as shown by Bernerth and Hirschfeld (2016), who found that leaders' job stress increased with high LMX-D and low-level LMX. The management of LMX so that team-level LMX is high and LMX-D is as low as possible should benefit both team members and leaders as well as the team outcome.

There are some limitations in this study. As the LMX construct reflects the quality of the dyadic relationship between a team leader and team members, it is necessary to consider each side's perception. However, although we focused on team-level LMX and LMX-D, we used team members' perceptions only, which could be a partial reflection of team dynamics. Previous researchers found that results for LMX agreement were positive in terms of work engagement and organizational citizenship behavior only when there was leader-member agreement about LMX quality (Matta, Scott, Koopman, & Conlon, 2015). Therefore, to more comprehensively measure LMX, future researchers should consider agreement or disparity about the quality of the dyadic relationship from both points of view.

Although we attempted to show LMX level and LMX-D as a source of positive group affective tone, other explanatory variables that may affect the emergence of positive group affective tone, such as emotional intelligence and emotional contagion susceptibility (Collins et al., 2013), should be considered in future research. In addition, we did not directly measure, but assumed, the positive relationship between positive group affective tone and team performance.

Although the cross-level effect of LMX-D is also plausible, we examined the team-level mechanism only. Recently, Gooty and Yammarino (2016) found a negative effect of LMX-D on individual-level outcomes, showing the cross-level effect of LMX-D. To extend our findings of the moderating role of LMX-D on the relationship between LMX level and interpersonal justice climate, future researchers could examine if the team-level interpersonal justice climate that is formed by LMX level and LMX-D also affects individual-level outcomes, indicating a more comprehensive cross-level mechanism.

Finally, when we collected the data we did not have specific hypotheses on the type of employee contract, namely, part-time or full-time, so we analyzed data from full-time employees only. However, the type of contract type may significantly affect the quality and differentiation of LMX within a team. Thus, future researchers should consider contract type, task interdependence (Liden et al., 2006), and other field-related variables that may be associated with LMX relationships. 10.2224/sbp.6278


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Yumi Seo

University of Seoul

Jee Young Lee

Korea National Defense University

Yumi Seo, College of Business Administration, University of Seoul; Jee Young Lee, Department of Management, Graduate School of Defense Management, Korea National Defense University. Correspondence concerning this article should be addressed Jee Young Lee, Department of Management, Graduate School of Defense Management, Korea National Defense University, 33, 2-Jayu-ro, Deokyang-gu, Goyang-si, Gyeonggi-do 412-706, Republic of Korea. Email: joyice94@

Caption: Figure 1 . Theoretical model of moderated mediation.

Caption: Figure 2. The moderating effect of LMX-D on positive group affective tone.
Table 1. Means, Standard Deviations, and Correlations Among
Team-Level Variables

                                      M      SD      1       2

1. Team size                         4.59    1.79
2. Team gender ratio                 0.72    0.26   -.11
3. Team tenure                      45.10   27.27   -.16     .06
4. Team education level              2.97    0.41   -.26   -0.01
5. Interpersonal justice climate     4.19    0.58    .13     .19
6. LMX level                         5.09    0.71    .09     .08
7. LMX differentiation               0.79    0.43    .22     .01
8. Positive group affective tone     3.39    0.48    .10

                                     3        4           5

1. Team size
2. Team gender ratio
3. Team tenure
4. Team education level             -.09
5. Interpersonal justice climate    -.21     -.34
6. LMX level                         .04     -.12         .57
7. LMX differentiation              -.01      .00        -.18
8. Positive group affective tone    -.04     -.25 *       .64 **

                                        6        7

1. Team size
2. Team gender ratio
3. Team tenure
4. Team education level
5. Interpersonal justice climate
6. LMX level
7. LMX differentiation                -.26
8. Positive group affective tone       .66 **   -.01

Note. N = 73 teams. LMX = leader-member exchange. * p < .05, ** p <

Table 2. Mediation and Moderated Mediation Analysis

                                        Positive group
                                        affective tone

                               B        SE          B        SE

                                 Step 1             Step 2

Constant                    1.78       -0.52      0.80      -0.59
Team size                   0.00       -0.03      0.00      -0.02
Team gender ratio           0.24       -0.16      0.14      -0.16
Team tenure                 0.00        0.00      0.00       0.00
Team education level       -0.22 *     -0.11     -0.09      -0.11
LMX level                   0.43 ***   -0.06     -0.30 **    0.07
Interpersonal justice                             0.29 *     0.10
LMX level x LMX-D
[DELTA][R.sup.2]             .38 ***              .28 ***

                                         justice climate

                             B        SE           B          SE

                                 Step 3                Step 4

Constant                    3.33       -0.62      5.44       -0.47
Team size                  -0.01       -0.03      0.00       -0.03
Team gender ratio           0.36        0.19      0.41       -0.19
Team tenure                -0.01 **     0.00     -0.01        0.00
Team education level       -0.44 **    -0.13     -0.45       -0.12
LMX level                   0.43 ***   -0.07      0.31 ***   -0.05
Interpersonal justice
LMX-D                                             -0.10       -0.05
LMX level x LMX-D                                 -0.13 **    -0.05
[DELTA][R.sup.2]             .45 ***                .07 *

Note. N = 73 teams. LMX = leader-member exchange, LMX-D = leader-
member exchange differentiation. * p < .05, ** p < .01, *** p < .001.

Table 3. Moderated Mediation Analysis

Level of moderator (LMX-D)   Standardized estimate     SE
                               of indirect effect

Low (at mean--1 SD)                 .130 ***          0.06
Medium (at mean)                    .090 ***          0.05
High (at mean + 1 SD)               .050 *            0.04

Level of moderator (LMX-D)     95% confidence interval

                             Lower limit                 Upper limit

Low (at mean--1 SD)                    .030                 .259
Medium (at mean)                       .018                 .192
High (at mean + 1 SD)                  .001                 .183

Note. N = 73 teams. LMX-D = leader-member exchange differentiation.
Mediator = interpersonal justice climate. * p < .05, *** p < .001.
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Author:Lee, Jee Young; Seo, Yumi
Publication:Social Behavior and Personality: An International Journal
Article Type:Report
Date:Aug 1, 2017
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