Investigating the Moderating Effects of Leader-Member Exchange in the Psychological Contract Breach-Employee Performance Relationship: A Test of Two Competing Perspectives

Abstract

Leader-member exchange (LMX) has been characterized as a form of social support capable of buffering the effects of negative work experiences. However, employees with high-quality relationships with leaders in the organization may have stronger negative reactions when psychological contracts are breached. Thus, while a social support perspective would suggest that LMX minimizes the adverse impact of psychological contract breach on employee performance, a betrayal perspective proposes that high LMX would aggravate the negative effects. Using cross-sectional and longitudinal research designs, results across three samples provided support for the betrayal perspective. That is, breach had a stronger negative relationship with organizational citizenship behaviours and in-role performance under conditions of high LMX. Implications of these results and future research directions are discussed.