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LMX and employee satisfaction: mediating effect of psychological capital

Shu-sien Liao (Department of Management Sciences, Tamkang University , New Taipei City, Taiwan)
Da-chian Hu (Department of Food and Beverage Management, Jinwen University of Science and Technology , New Taipei City, Taiwan)
Yu-Chun Chung (Department of Management Sciences, Tamkang University , New Taipei City, Taiwan)
Li-Wen Chen (Department of Management Sciences, Tamkang University , New Taipei City, Taiwan)

Leadership & Organization Development Journal

ISSN: 0143-7739

Article publication date: 2 May 2017

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Abstract

Purpose

The purpose of this paper is to investigate the relationship between leader-member exchange (LMX), job satisfaction (JS), life satisfaction (LS), and psychological capital (PC) for employee relation management.

Design/methodology/approach

A total of 319 valid questionnaires were received from employees of financial and electronics manufacturing industries in Taiwan, and they were then analyzed using a structuring equation model with SPSS 12.0 and LISREL 8.8.

Findings

Good LMX increases psychological capital. Psychological capital enhances both JS and LS, and psychological capital serves as a full mediator for both JS and LS. A moderating effect of industrial characteristics is found between LMX and LS and between psychological capital and LS.

Practical implications

The findings suggest that managers need to focus on leadership style in order to develop employees’ life and JS through building psychological capital.

Originality/value

This study not only obtained further support for predictions derived from the LMX theory but was also a more extensive analysis of the meaningful relationships between job and LS with a mediating effect of psychological capital on employee relation management.

Keywords

Citation

Liao, S.-s., Hu, D.-c., Chung, Y.-C. and Chen, L.-W. (2017), "LMX and employee satisfaction: mediating effect of psychological capital", Leadership & Organization Development Journal, Vol. 38 No. 3, pp. 433-449. https://doi.org/10.1108/LODJ-12-2015-0275

Publisher

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Emerald Publishing Limited

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