Relationship of emotional intelligence and leadership member exchange quality

There is no doubt that one of the major elements of research in organizational behaviour is Leadership. With a quick overlook on the last decade researches, we can find that the researches which are related to leadership have captured the interest of a large portion of researchers all over the world. A relational based approach to leadership using leader-member exchange theory seems to be a significant leadership research stream. Beside of this, based on the assumptions of major researches we can find that Leader-member exchange (LMX) theory illustrates the dyadic procedure by which responsibilities and anticipations are developed for a leader with each subordinate (Dansereauet al., 1975; Graen and Cashman, 1975). According to the suppositions of this theory, we can find few differences between the qualities of the exchange relationship, because this element frequently differs from one subordinate to another. In Leader-member exchange (LMX) theory we have two kinds of relationship, first one is high exchange relationships and the second one is lower exchange relationships. In one hand, High exchange relationships are developed with some subordinates, in the other hand in contrast lower exchange relationships are expected to be developed with other subordinates (Graen and Cashman,1975). There are three dimensions which can describe and characterize High-exchange relationships: high-level of trust, liking, and respect, and they engage with expectations of mutual exchange. In organization we can find some kinds of balance between behaviour of leaders and subordinates; the leader provides and prepares outcomes desired by subordinates, such as motivating and exciting tasks, extra responsibilities and consciousnesses, and larger compensations. In the other hand, in exchange for preparing these desired outcomes, the subordinates are supposed to be committed to the work and loyal to the leader and organization. In low-quality exchange relationships, because of the nature of relationship subordinates are only expected to do the formal and official necessities of their normal jobs, and additional benefits and promotes are not offered by the leader. Beside of that, Exchange relationships develop and extend slowly after a while and are emphasized by the behaviour of the leader and the subordinates. In the preliminary version of LMX theory, having some kind of diverse exchange relationships was viewed as typical and beneficial and trustable and reliable for a leader, but Graen and Uhl-Bien (1995) later suggested that a leader have to try to develop high-exchange relationships with as many subordinates as is feasible. Based on the result of a large number of researches, High LMXs suggest a number of helpful and positive outcomes for a leader and there is no doubt that LMX was correlated positively with few elements like subordinate performance, satisfaction with supervision, overall job satisfaction, organizational commitment, and role clarity. A more recent review by Erdogan and Liden (2002) reminded further positive and helpful outcomes of LMX, including more innovation, less job stress, and greater workplace safety.

Most of the research on the correlates of LMX has focused on ending results rather than antecedents (Erdogan and Liden, 2002).While these researches are important to our overall understanding of the LMX concept, there is little evidence of personal or interpersonal attributes associated with these relationships (Phillips and Bedeian, 1994). According to result of many researches and their results, for getting better and increasing our understanding of the LMX relationship and its formation, research is needed on the antecedents associated with the leader-member exchange procedure.

In this study I am going through investigate two significant antecedents thought to be related to the quality and excellence of the subordinate-supervisor relationship: demographic similarity and emotional intelligence.

Emotional intelligence is one of the most widely discussed topics in current industrial, work, and organisational psychology. The concept of EI was firstly introduced by Salovey and Mayaer as a Type of social intelligence, separable from general intelligence, which involves the ability to monitor one’s own and others’ emotions, to discriminate among them, and to use the information to guide one’s thinking and actions. In a later effort, they (Salovey & Mayer, 1990) expanded their model and defined emotional intelligence as the ability of an individual to perceive accurately, evaluate, and express emotion; the ability to access and generate feelings and emotions when they facilitate thought; the ability to understand emotion and emotional knowledge; and the ability to regulate emotions to promote emotional and rational and intellectual growth. Researches have shown that emotional intelligence is the common factor that influences the different ways in which people develop in their social skills, lives, and also in their jobs; control their emotions; get along with other people; and handle frustration. It has been discovered that the difference between a simply brilliant person and a brilliant manager is due to a person’s emotional intelligence. Finally, it is emotional intelligence that dictates the way people deal with each other and understand emotions. Thus, emotional intelligence is considered very important for business leaders because if business leaders are insensitive to the mood of their staff or team, it may cause frustration and, therefore, not get the best out of people (Anonymous, 2004). Turner (2004) has stated that emotional intelligence is the softer component of total intelligence and that it contributes to both professional and personal lives of people. Traditional IQ is the ability of learning, understanding, and reasoning. It is now thought to contribute only 20% to one’s success, whereas emotional quotient (EQ), which is the ability of understanding oneself and interacting with people, contributes 80%. EQ is very critical to effective leadership. IQ has been linked to job performance and is a key factor and element in recruitment. However, EQ is obvious in the managers’/leaders’ ability to retain their positions and be successful in their roles. In fact most of the firms hire for intelligence (IQ) and sack because of attitude (EQ).

1.2 Statement of Purpose

The present study aims to examine the relationship between EI, demographic issues (age, gender, and race) as a moderator variable and LMX. Two hypotheses would be tested. First, there will be a significant and positive relationship between EI and higher LMX quality. Second, there will be significant positive relationship between quality of LMX and the mentioned demographic issues.

1.3 Significance of Study

More research has been conducted on the outcomes of LMX than on its determinants, but several antecedents have been identified (Liden et al., 1997; Nahrgang et al., 2009; Schriesheim et al., 1999). A favorable exchange relationship is more likely when the subordinate is perceived to be competent and dependable, and the subordinate’s values, attitudes, and demographic attributes are similar to those of the leader. Some personality traits for the leader and subordinate (e.g. agreeableness, extroversion, positive affectivity) may also be related to LMX. However, the number of studies on traits is too small to reach any firm conclusions, and the studies did not include mediating variables such as emotional intelligence to explain the relationship.

2. Literature Review

2.1 Leader Member-Exchange Theory

The concept of vertical dyadic linkage or LMX was introduced in the 1970s (Dansereau et al., 1975). The original idea was born out of the fact that ratings that different followers report for the same leader have a variance that goes beyond simple measurement errors and appears in fact to reflect something meaningful. Graen and colleagues (e.g., Dansereau et al., 1975) assume that this variance is due to the different behavior that the leader shows towards different followers. Instead of viewing leadership as a phenomenon a leader shows towards a group, leadership is regarded as a dyadic phenomenon, happening between one leader and one follower. More recent developments of this stream of research focus more extensively on the quality of the relationship between leader and follower (for an overview see Graen and Uhl-Bien, 1995).

Leader-member exchange (LMX) theory suggests that a leader will develop an exchange relationship over time with each subordinate (Dienesch and Liden, 1986; Graen and Cashman, 1975; Graen and Scandura, 1987; Graen and Uhl-Bien,1995).

Empirical studies have found a positive correlation between LMX quality and several indicators of leadership effectiveness (e.g. Graen and Uhl-Bien, 1995; Harris et al., 2009; Schriesheim et al., 1999). In a meta-analytic study Gerstner and Day (1997) found that a favorable exchange relationship was related to higher subordinate satisfaction, greater organizational commitment, better job performance, and lower turnover. Erdogan and Liden (2002) reported additional positive outcomes of a favorable exchange relationship, such as more creativity, less job stress, and better workplace safety. More research has been conducted on the outcomes of LMX than on its determinants, but several antecedents have been identified (Liden et al., 1997; Nahrgang et al., 2009; Schriesheim et al., 1999).

The development of LMX may also be affected by contextual variables (Liden et al., 1997). It may be more difficult for the leader to develop favorable exchange relationships when the work unit or team has many members, when the members are only temporarily assigned to the team, when the members are widely dispersed and seldom interact with the leader, when the leader is overloaded with responsibilities and has little time for interaction with individual members, or when the leader has little power to provide rewards and benefits desired by members.

As we know Leader empathy, ethical values, and relations-oriented behavior all appear to be relevant for effective leadership, A recent study found that LMX is correlated more with relations-oriented behaviors than with other types of leadership behaviors (Yukl et al., 2009). The relations-oriented behaviors included providing psychological support, recognizing subordinate contributions, developing subordinate skills, consulting with subordinates to learn about their ideas and concerns, and delegating more authority and responsibility to subordinates.

It has been more than three decades since researchers focused on the role of social exchange in leader-member relationship (Scandura, 1999). The leader-member exchange (leader-member exchange) theory basically argues that leaders develop differentiated dyadic relationships with their subordinates. Social exchange theory sees the interactions between the leader and members as interdependent and contingent on the actions of the other party (Cropanzano and Mitchell, 2005). Social exchange is said to evolve when employers takes care of their employees. Over time, this reciprocal relationship evolves into a trusting and loyal relationship. High quality leader-member exchange is characterized by mutual trust, liking, respect and reciprocal influence between the leader and team members (Liden and Maslyn, 1998). Low quality leader-member exchange is marked by a relationship that is based strictly on the terms of the employment contract (Liden and Maslyn, 1998).

The research on LMX has captured the interest of researchers in many parts of the world. Hassan et al. (2009) highlight the role of LMX quality and communication with supervisor as an antecedent of team-oriented commitment among Malaysian workers. Bhal’s (2006) work mentioned earlier involved Indian IT workers. Schyns et al. (2008) found support for the effect of personality traits such as Need for Leadership and dependence on follower rating of LMX quality among Dutch workers. A study involving German employees by Schyns and Wolfram (2008) indicates that the key concerns that followers have in assessing the quality of LMX they have with their leader are different from the concerns that leaders have. Whereas leaders are primarily concerned with performance, followers are concerned with consideration. However, the ability of a leader to address the concern for consideration will lead to followers reciprocating by delivering performance.

2.2 Emotional Intelligence

Emotional Intelligence enables people to deal with everything with a measure of balance and maturity. Emotionally intelligent people have a deep rooted sense of self that helps them to understand other people, keep things in proportion, retain focus, and understand what is important. Moreover they retain a positive viewpoint approximately all of the time, they are successful in everything that they choose to do, they have high work performance, they have high personal productivity levels, and they consequently enjoy greater job satisfaction.

Performance measures that often exclude the “soft skills” fail to reflect any positive consequences of EI development that may be occurring within the organization. Emotional elements underlie the dynamics of many aspects of modern and new organizations, and the role of EI must be considered while devising organizational policies, processes, and procedures.

Lubit (2004) considered social competence to be an important and main component of EI, making it very valuable and significant for teams. Welch (2003) has said that EI makes teams able to boost their performance. In an era of teamwork, it is necessary to find out what makes teams work. His research has shown that the same as individuals, the most effective teams are the emotionally intelligent teams and that any team can improve and achieve higher levels of EI. In his study, teams with same aggregate IQ were compared, and it was discovered that teams with high levels of EI outperformed teams with low levels of EI by a margin of two to one. He highlighted two significant points. First one is that, there is evidence that EI in teams is an important factor. And the second one indicates that, there is the assertion that EI can be developed. He also proposed that these five EI team competencies build on individual EI skills: inclusiveness, adaptability, assertiveness, empathy, and influence. However, these competencies are not enough on their own. Trust is the foundation of teamwork for it to be a truly joyous undertaking; it allows people to examine where they can improve without becoming self-critical or defensive.

2.3 Research Questions & Research Objectives

Research Questions:

RQ1: Is there any significant and positive relationship between EI and LMX quality?

RQ2: Is there any significant and positive relationship between demographic dissimilarity and LMX?

Research Objectives:

RO1. Investigation the relationship of Emotional Intelligence (EI) and Leader-Member Exchange (LMX)

RO2. Investigation the relationship of Demographic issues and Leader-Member Exchange (LMX)

3. Methodology

Leader emotional intelligence will be measured with four items from a sub-scale of the questionnaire on emotional intelligence developed by Wong and Law (2002). Each item had six Likert-type response choices (1-strongly disagree to 6-strongly agree). Only the four items with positive wordings were used. Sample items include:

My manager is very aware of how other people are feeling.

My manager is a good observer of emotions in other people.

LMX will be measured with the LMX-7 instrument developed by Scandura and Graen (1984). Graen and Uhl-Bien (1995, p. 236) provided additional support for the validity of this questionnaire. Each item had five anchored response choices with unique anchors that are appropriate for the item. The wording for the response choices in a few items was slightly changed to reduce ambiguity. Sample items include:

How well does your boss understand and appreciate your talents and potential;

How much confidence does your boss have in your ability to do the work;

How willing are you to do extra work to help your boss deal with a difficult problem;

How would you describe the relationship between you and your boss