A Longitudinal Study on the Early Development of Leader-Member Exchanges

Transcription

1 Journal of Applied Psychology 1993, Vol. 78, No. 4, Copyright 1993 by the American Psychological Association, Inc /93/S3.00 A Longitudinal Study on the Early Development of Leader-Member Exchanges Robert C. Liden, Sandy J. Wayne, and Dean Stilwell The authors investigated the first 6 months that 166 newly hired employees and their immediate supervisors worked together. Expectations, perceived, liking, demographic, and performance were examined as determinants of leader-member exchanges (LMs). Leader and member expectations of each other assessed in the first 5 days in the life of the dyad predicted LMs at 2 weeks and at 6 weeks following the 1st day of the dyads' existence. Member expectations of leaders also predicted LMs at 6 months. Following nearly the same pattern, perceived and liking from both the leaders' and members' perspectives predicted LMs at most time periods. Demographic between leaders and members had no significant effects on LM development, and subordinate performance ratings were relatively less important in predicting LM than were affective variables. Leader-member exchange (LM) theory suggests that leaders differentiate among their subordinates within the work unit (Dansereau, Graen, & Haga, 1975; Graen & Cashman, 1975; Graen, Liden, & Hoel, 1982; Graen, Novak, & Sommerkamp, 1982; Graen & Scandura, 1987). Rather than using the same style in dealing with all subordinates, leaders develop a different type of relationship or exchange with each subordinate. These relationships range from those that are characterized by downward influence and role-defined relations (i.e., low LM) to those that are characterized by mutual trust, respect, liking, and reciprocal influence (i.e., high LM; Dansereau et al., 1975). The key premise of LM theory is that the exchange relationship between a leader and a member has an influence on many organizational outcomes. Research has shown LM to be negatively related to turnover (Graen, Liden, & Hoel, 1982) and positively related to performance evaluations (Graen, Novak & Sommerkamp, 1982; Wayne & Ferris, 1990), frequency of promotions (Wakabayashi, Graen, Graen, & Graen, 1988), and desirability of work assignments (Liden & Graen, 1980). LM has also been found to be related to job attitudes, leader attention, leader support, participation in decision making, and amount of time and energy invested in the job (Crouch & Yetton, 1988; Dansereau et al., 1975; Graen & Cashman, 1975; Graen & Schiemann, 1978; Kozlowski & Doherty, 1989; Liden & Graen, 1980; Scandura, Graen, & Novak, 1986). Another stream of research has shown that within-group variance (i.e., the LM or dyadic approach) explains leader behavior above and beyond variance explained by between-groups variance (i.e., Average Leadership Style ap- Robert C. Liden and Sandy J. Wayne, Department of Management, University of Illinois at Chicago; Dean Stilwell, Department of Management, University of Dayton. We gratefully acknowledge the research assistance of Susan Adams, Leah Grissom, John Maslyn, Janet Szumal, and Cynthia Whitson and the helpful comments of the three anonymous reviewers. Correspondence concerning this article should be addressed to Robert C. Liden, Department of Management, University of Illinois, MC 240, Chicago, Illinois proach; e.g., Graen, Liden, & Hoel, 1982; Katerberg & Horn, 1981; Vecchio, 1982). In summary, research on LM has supported the major propositions of the theory. Although this research has been appealing, there has been criticism. One important gap in LM research is the lack of understanding of the LM developmental process (Dienesch & Liden, 1986). Only a very few studies have focused on the LM developmental process (Dansereau et al., 1975; Dockery & Steiner, 1990). In essence, the leader and subordinate behaviors involved in the development of LMs have not been empirically delineated (House & Baetz, 1979; Jablin, 1987). The focus of the current research was to investigate the LM developmental process. We chose variables for empirical examination as possible determinants of LM development on the basis of theory and cross-sectional research that has identified expectations, job performance, and compatibility between leader and member as the key elements of LMs (Dienesch & Liden, 1986; Graen & Cashman, 1975). Expectations The idea that expecting an event could increase the likelihood that the event would happen has been classified as a selffulfilling prophecy (Merton, 1948). This self-fulfilling prophecy is referred to as the Pygmalion effect when studied in the context of interpersonal relationships. The Pygmalion effect commences when a person develops expectations about a target person. Next, the perceiver acts toward the target person on the basis of these expectations. The expectations are then communicated to, and interpreted by, the target person. Over time, the target person internalizes these expectations on the basis of his or her interpretations (Darley & Fazio, 1980). A substantial amount of research on expectations and their effects on behavior has accumulated over the past 30 years. This research has concentrated in several areas, including education (Rosenthal & Rubin, 1978), the military (Crawford, Thomas, & Fink, 1980; Eden & Ravid, 1982; Eden & Shani, 1982), and business (Hogan, 1987; King, 1971; Phillips & Dipboye, 1989; Sutton & Woodman, 1989). Most of this research 662

2 LEADER-MEMBER ECHANGE DEVELOPMENT 663 has been very supportive of the Pygmalion effect. However, most of the research conducted in business has concentrated on training (similar to education; King, 1971) and the interview process (Dipboye, Stramler, & Fontenelle, 1984; Phillips & Dipboye, 1989; Tucker & Rowe, 1979). Less research has been conducted in actual work settings, especially at the dyadic level, and the vast majority of research on the self-fulfilling prophecy has involved manipulated expectations. In natural settings in which expectations have not been manipulated, individuals often form expectations of targets based on available information. Information available to leaders about members may be derived secondarily from such sources as test scores, recommendations, or interviews (e.g., Phillips & Dipboye, 1989) or directly from the member during the first few days on the job (Hollander & Offermann, 1990). On the other hand, the information about a leader that is available to a subordinate might come from friends working in the organization, from interviews with the leader, or directly from the leader during the first few days on the job (Fisher, 1986; Jablin, 1987). According to Motowidlo (1986), the available information represents a sample, and the true score, or domain of information, about a person is analogous to the population. The sample includes negative and positive bits of information about the target from which the individual forms a perception. The representativeness of the sample and degree of bias in the individual's information processing (Lord, 1985) dictate whether the resulting expectation concerning the target will be positive or negative. In turn, an individual's resulting expectation concerning the target will influence subsequent interactions between the two parties. The process discussed above implies that the formation of expectancies applies to leaders and members, as both form expectations of each other before, or early in, the life of the dyad (Hollander & Offermann, 1990; Jablin, 1987). Virtually all discussion of the self-fulfilling prophecy has focused on the expectancies that a relatively higher power and status individual, such as a teacher, interviewer, or leader, has concerning a target, such as a student, job applicant, or subordinate. However, it appears that individuals with relatively less formal power and status also form expectancies concerning a higher power and status target, such as a supervisor (Hollander & Offermann, 1990; Miller & Jablin, 1991; Mowday, Porter, & Steers, 1982). Positive leader expectations of a member appear to be translated into such leader behaviors as delegating challenging task assignments (Graen, Orris, & Johnson, 1973; Leana, 1986) and providing constructive feedback, desirable rewards, and training (J. Feldman, 1986). Negative leader expectations are thought to be manifested in the delegation of routine, mundane tasks (Leana, 1986) and in the provision of less feedback, less desirable rewards, and fewer opportunities for training (Graen, 1976). Similarly, a member who has formed positive expectations of a leader should be more responsive to the leader's behavior in terms of accepting and acting on role requests (cf. Graen, 1976). For example, in a rare field study, subordinate preemployment expectations of leader behavior and the job itself showed significant positive correlations with commitment after 3 months on the job (Pierce & Dunham, 1987). In summary, theory and research on expectations suggest that both member and leader expectations of each other may significantly influence the development of LM. As noted, the self-fulfilling prophecy suggests that leaders' expectations of members will influence subsequent behavior toward those members (e.g., J. Feldman, 1986). For example, leaders with positive expectations of a member may provide that individual with more support and guidance. In turn, the member receiving the support and guidance is likely to interpret those behaviors in terms of LM. Thus, a leader's expectations may be related to a member's perception of LM. Hypothesis la. Expectations that a member has of a leader's future work competence and degree of with himself or herself will be positively related to LM as assessed from the member's perspective. Hypothesis Ik Expectations that a leader has of a member's future work competence and degree of with himself or herself will be positively related to LM as assessed from the member's perspective. Hypothesis Ic. Expectations that a leader has of a member's future work competence and degree of with himself or herself will be positively related to LM as assessed from the leader's perspective. Performance LM theory is based on the concepts of role making and social exchange. Graen and his colleagues (e.g., Graen, 1976; Graen & Cushman, 1975) adopted the role episode model from Kahn, Wolfe, Quinn, Snoek, and Rosenthal (1964) to help explain how LMs form. Subordinate performance plays a major part in this role-making process (Dienesch & Liden, 1986; Graen & Scandura, 1987). Overall, the role-making process involves a testing period in which the leader evaluates the extent to which sent roles are accepted or rejected by a new member. The extent to which a member's task performance satisfies the leader's role requests influences the type of LM relationship that develops. The explanation for a member's willingness to accept role requests, even those that extend beyond what is expected from the employment contract, can be explained with social exchange theory (Blau, 1964). The member expends time and effort fulfilling the leader's role requests in anticipation of reciprocation on the leader's part (Eisenberger, Cotterell, & Marvel, 1987). When both members of the dyad do reciprocate, trust develops and a strong social exchange emerges (Blau, 1964). Viewing LMs as social exchanges implies that task performance in the early life of a leader-member dyad should be related to the type of LM that subsequently develops. There is support in the literature for a positive relation between performance ratings and LM (e.g., Dansereau et al, 1975; Liden & Graen, 1980; Vecchio & Gobdel, 1984; Wayne & Ferris, 1990), although the effects for "objective" performance measures are often weaker (Vecchio & Gobdel, 1984; Wayne & Ferris, 1990). Hypothesis 2. The more positively that a leader rates a member's performance, the higher will be the quality of the LM as assessed from both the leader's and the member's points of

3 664 R. LIDEN, S. WAYNE, AND D. STILWELL Compatibility Theory on the LM developmental process suggests that, in addition to member performance, the degree of compatibility between leader and member should also contribute to the type of LM that ultimately forms (Dienesch & Liden, 1986; Graen & Cashman, 1975). Compatibility refers to both perceived and actual. Perceptions of with one another may form very early in the life of the dyad. Actual compatibility may be denned as on individual and demographic characteristics. Perceived Similarity and Liking One of the most firmly established findings in the social psychology literature is that between individuals on a number of dimensions, such as attitudes, personality, and demographic characteristics, is related to interpersonal attraction and liking (Byrne, 1971). Degree of interpersonal attraction, liking and disliking, are often referred to as affect. Affect has been identified as the major component of interpersonal relationships (Zajonc, 1980). The affective component of leader-member relationships is thought to play a critical role in the development of LMs (Dienesch & Liden, 1986). Correlations of.74 and.73 (in a lab experiment and field study, respectively) between liking and LM have provided strong support for this proposition (Wayne & Ferris, 1990). The documented association between and liking and the relation between liking and LM suggest that the degree of perceived and LM may be directly related. Empirical studies associating with LM have been rare, but suggestive. For example, Graen and Schiemann (1978) found an association between leadermember agreement on job-related issues and LM, and Steiner and Dobbins (1989), in a lab experiment, found of work values in dyads to be related to LM. Also, researchers who have found associations between leader-member and leader performance ratings of members (e.g., Pulakos & Wexley, 1983; Turban & Jones, 1988) have suggested that LM plays a mediating role between and performance ratings. In summary, theory and empirical results suggest that if the persons in a dyad perceive each other to be similar, they will tend to like one another and the working relationship between the two will be enhanced. This suggests that the affective component described by Dienesch and Liden (1986) may play an important role in LM development. Hypothesis 3. Perceived will have a positive influence on LM assessed from both the leader's and the member's points of view. Hypothesis 4. Liking will have a positive influence on LM assessed from both the leader's and the member's points of view. Demographic Similarity Individual-level demographic effects have been dismissed as relatively unimportant to organizational behavior in general (Mitchell, 1979) and to LM development in particular (e.g., Dienesch & Liden, 1986; Graen & Cashman, 1975; cf. Duchon, Green, & Taber, 1986). However, examination of between individuals in organizations has been theorized as being critical to understanding organizational behavior (Schneider, 1987). It follows that between supervisors and subordinates on such individual characteristics as age, race, sex, education, and tenure may shed light on the development of LMs. Individuals may utilize different memory categories when processing information concerning a similar, as opposed to a dissimilar, target (e.g., Ilgen & Feldman, 1983; Lord, 1985). In doing so, an individual may assign a different set of characteristics to a similar target than to a dissimilar target on the basis of categorization, not actual observation. This may result in biased judgments of people. For example, a White male leader may use established memory categories for race to determine that a Black subordinate does not possess qualities needed for high-quality LM status (Ilgen & Youtz, 1986). Work on relational demography has shown that at the dyadic level, demographic between members of a dyad can have a greater effect on dependent variables than do the individual-level characteristics. For example, Tsui and O'Reilly (1989) found demographic to be significantly related to supervisors' ratings of the degree to which they liked a subordinate and the extent to which they felt that the subordinate had met role and responsibility expectations. Demographic has also been shown to be negatively associated with turnover within the work group (Jackson et al., 1991). Likewise, demographic between supervisor and subordinate has also been found to be a significant, albeit weak, predictor of subordinate job satisfaction and job performance rating (Turban & Jones, 1988). These results indicate that demographic may play a role in the development of LMs. Hypothesis 5. Demographic will have a positive influence on LM from both the leader's and the member's points of view. Participants Method Because our purpose in this study was to examine the development of LM, we sought only newly formed dyads for inclusion in the study. In addition, for the measurement of expectancies to be meaningful, we determined that leaders and members should have worked together for no more than 5 days. However, many new employees could not be contacted until they had already worked for more than 5 days with their new supervisors. Thus, we identified two samples of employees: Sample 1 employees were reached within the first 5 days since they began working with their new supervisor. These individuals completed four questionnaires, one immediately, and one each at 2 weeks, 6 weeks, and 6 months after their first day with their new supervisor. Employees who were reached between the 6th and 14th day since they began to work with their new supervisor made up Sample 2. These people completed three questionnaires, one 2 weeks, one 6 weeks, and one 6 months after their first day with their new supervisor. We used Sample 1 to conduct all analyses involving expectancies and used the Total Sample (Samples 1 and 2 combined) for all other analyses. We conducted the study at two major universities, one located in the midwest, and the other in the southeast. Because data were collected at two sites, we examined differences between the sites on all variables. Hierarchical regression analyses, with site entered first for all regression tests of the hypotheses, revealed that there were no significant

4 LEADER-MEMBER ECHANGE DEVELOPMENT 665 effects for site in any of the regression analyses included in this study. Therefore, we merged data from the two sites for all subsequent analyses Ṡample 1 comprised 82 employees and their immediate supervisors. The Total Sample comprised 166 subordinates and their direct supervisors. The participants held a wide range of nonacademic positions, such as secretary, electrician, librarian, admissions counselor, research scientist, and computer programmer. The average age of the subordinates was 31 and 33 years for Sample 1 and the Total Sample, respectively, and the average age of the supervisors was 42 years for both Sample 1 and the Total Sample. In Sample 1, there were 19 male-leadermale-member dyads, 60 female-leader-female-member dyads, 13 male-leader-female-member dyads, and 6 female-leader-malemember dyads. With respect to race in Sample 1, there were 58 samerace dyads and 36 dyads in which the leader and member were of different races. In the Total Sample, there were 41 male-leader-malemember dyads, 100 female-leader-female-member dyads, 29 maleleader-female-member dyads, and 19 female-leader-male-member dyads. With respect to race in the Total Sample, there were 114 samerace dyads and 66 dyads in which the leader and member were of different races. Procedure Recently hired subordinates at both sites were required to attend a 1-day orientation session. The orientation sessions were held biweekly with small groups of new subordinates. Over a 1 -year period, one of the members of our research team attended each orientation session to describe the study and to elicit participation. It was necessary to attend orientation sessions over an entire year because of the fairly low number of new hires at any single session. Over the course of the entire data collection period, approximately 35% and 70% of all individuals attending orientation sessions at the Midwest and Southeast sites, respectively, agreed to participate in the study. These percentages should be interpreted as the lower bounds for response rates, as many individuals did not participate because they were not eligible. Actual response rates were substantially higher. For example, employees who held academic appointments, who had worked with their supervisors previously, or who had worked with their supervisors for more than 14 days before attending the orientation were not eligible for the study. The personnel directors at both sites also informed us that some of the new employees attending orientation sessions were illiterate or functionally illiterate. For ethical reasons, we chose not to identify employees who were eligible for the study but who elected not to participate. We asked the new employees who wished to participate how many days it had been since they first started working with their new supervisors. Those who answered 5 days or less were given the first questionnaire immediately and were told that they would receive another three questionnaires through campus mail over the next 6 months. The first questionnaire for these (Sample 1) people included demographics and expectation items. Employees volunteering to participate in the study who indicated that it had been between 6 and 14 days since they started working with their new supervisors were provided with the first of three surveys and were asked to return it to us by mail within 2 days. The first questionnaire for these (Sample 2) individuals was the same as the second (2-week) questionnaire given to the Sample 1 people, except that it also contained the demographic items (we did not include expectation items in this survey of Sample 2 people). We asked all volunteers for their supervisors' phone numbers, and, immediately following the orientation, we contacted the direct supervisors of the participating subordinates and asked them to participate in the study. We provided supervisors who agreed to participate with the first survey and asked them to return it to us by mail within 2 days. We told all volunteers that their responses would be held in strict confidence. The second survey was mailed to Sample 1 subordinates and supervisors 2 weeks from the day they started working together. The third and fourth surveys for Sample 1 individuals (which were identical to the second and third surveys for Sample 2 participants) were mailed to all participating subordinates and supervisors 6 weeks and 6 months, respectively, from the day they started working together. Participants returned the surveys by mail in an envelope that we provided. Measures We assessed the demographic items and expectancies in the 0-5 days survey for Sample 1 participants, whereas we measured demographic items in the 2-week survey for Sample 2 individuals. We measured subordinate- and supervisor-perceived and supervisor appraisal of the subordinate's performance at 2 weeks for all participants. We measured subordinate and supervisor LM at 2 weeks, 6 weeks, and 6 months for both Sample 1 and Sample 2 participants. A summary of the data collection schedule appears in Table 1. Demographic. We used a measure based on Turban and Jones's research (1988) to assess demographic. Gender, race, educational level, and age were the demographic variables included in the measure. Gender and race discrepancy was coded as the same(q) or different (1). Education was coded as follows: no degree (1), high school diploma (2), associate's degree (3), bachelor's degree (4), master's degree (5), and PhD or MD (6). Educational discrepancy was the absolute difference between supervisor and subordinate responses. Age was measured in years. Age discrepancy was the absolute difference between supervisors and subordinates. We divided discrepancy scores by their respective standard deviations, summed, and then reverse scored: the larger the score, the greater the demographic. Member expectations of the leader. For Sample 1 only, six items measured in the first questionnaire assessed subordinate expectations of the new supervisor: "I think that my supervisor will be an excellent superior," "I think that my supervisor will be a high performer," "I think my supervisor will have a long, successful career at [name of organization]," "I think that my supervisor and I are alike in a number of areas," "I think that my supervisor and I are similar in terms of our outlook, perspective, and values," and "I think that my supervisor and I will see things in the same way" Responses to all items were on a scale Table 1 Data Collection Summary Variable Member perceptions Expectations Perceived Member liking of leader Member LM Leader perceptions Expectations Perceived Leader liking of member Leader LM Member performance Demographics Demographic " Time of assessment 0-5 days 2 weeks 6 weeks 6 months x b Note. s without a superscript indicate data that were collected from both Sample 1 and Sample 2 and that made up the Total Sample. LM = leader-member exchange. * Sample 1 only. b Sample 2 only.

5 666 R. LIDEN, S. WAYNE, AND D. STILWELL from strongly disagree (1) to strongly agree (7). All six items were summed to form a composite variable (a =.85). Member-perceived with the leader. We used three items developed by Turban and Jones (1988) to measure perceived : "My supervisor and I are similar in terms of our outlook, perspective, and values," "My supervisor and I see things in much the same way," and "My supervisor and I are alike in a number of areas." We wrote three additional items to assess perceived : "My supervisor and I handle problems in a similar way," "My supervisor and I think alike in terms of coming up with a similar solution for a problem," and "My supervisor and I analyze problems in a similar way." Subordinates responded on a 7-point scale ranging from strongly disagree (1) to strongly agree (7). All six items were summed to create the measure (a =.91). Member-perceived also showed moderate test-retest reliabilities between 2 and 6 weeks (r =.69), between 6 weeks and 6 months (r =.74), and between 2 weeks and 6 months (r =.55). Member liking of the leader. We used two items developed by Wayne and Ferris (1990) to measure member liking: "I like my supervisor very much as a person" and "I think my supervisor would make a good friend." The two items were scaled from strongly disagree (1) to strongly agree (7) and summed to form a composite (a =.86). Member view oflm. We used seven items to measure the subordinate's perception of LM (member LM). These items, adapted from Scandura and Graen (1984), were reworded to accommodate the use of a 7-point scale ranging from strongly disagree (1) to strongly agree (1). An example item was "I can count on my supervisor to 'bail me out,' even at his or her own expense, when I really need it." The seven items were summed to form the member-lm composite (as =.80 and.86 at 2 weeks,.85 and.86 at 6 weeks, and.88 and.90 at 6 months for Sample 1 and the Total Sample, respectively). The seven-item measure of member LM has consistently shown criterion-related validity. For example, the member-lm measure has been found to be positively related to climate perceptions (Kozlowski & Doherty, 1989), decision-making influence, performance ratings (Scandura et al., 1986), and turnover (Graen, Liden, & Hoel, 1982). Also, LM training, which was a treatment in a field experiment, showed significant pre-post effects on productivity, performance ratings, and job satisfaction (Graen, Novak, & Sommerkamp, 1982). Leader expectations of the member. We used items that mirrored those used to assess subordinate expectations to measure supervisor expectations; for example, "I think that my new employee will be an excellent employee." The six items, which were included in only the first questionnaire, were summed to form a composite variable (a =.88). Leader-perceived with the member. We used items that mirrored those used to assess subordinate perceptions of to measure supervisor-perceived ; for example, "My subordinate and I analyze problems in a similar way." The six items were summed to form the scale (a =.92). Leader-perceived also showed high test-retest reliabilities between 2 and 6 weeks (r =.75), between 6 weeks and 6 months (r =.79), and between 2 weeks and 6 months (r =.60). Leader liking of the member. We used two items mirroring items that measured member liking of the leader to measure leader liking of the member: "I like my subordinate very much as a person" and "I think my subordinate would make a good friend." Each item was scaled from strongly disagree (1) to strongly agree (1). The alpha for this scale was.76. Leader view of LM. We used items mirroring our member-lm measure to assess supervisors' perceptions of LM (leader LM). For example, one item was "I would be willing to 'bail out' my subordinate, even at my own expense, if he or she really needed it." The seven items were summed to form the leader-lm composite (as =.81 and.80 at 2 weeks,.75 and.79 at 6 weeks, and.84 and.81 at 6 months for Sample 1 and the Total Sample, respectively). Although the seven-item leader LM has not been used as frequently as the member version, criterion-related validity has been demonstrated. For example, the seven-item leader LM has been found to be related to liking (Wayne & Ferris, 1990) and to performance rating of the member (Scandura et al., 1986; Wayne & Ferris, 1990). The construct validity of the LM, perceived, liking, and expectation measures were assessed with factor analyses that included all items for all four of the measures (from the member perspective). Principal components analysis indicated that four factors had eigenvalues greater than 1, and explained 65.9% of the variance (eigenvalues of 8.6,2.6,1.6, and 1.0, respectively, for Factors 1,2,3, and 4). Examination of the factor matrix following varimax rotation revealed that all items loaded on the factors that they were intended to measure, although there were two cross-loadings on the Perceived Similarity factor (refer to Appendix A). We ran the same analysis for the leader responses to mirrored versions of the same items. For leader perceptions, five factors attained eigenvalues greater than 1, and explained 67.2% of the variance (eigenvalues of 8.0, 2.1,1.7,1.2, and 1.1, respectively, for Factors 1,2,3,4, and 5). Factor loadings (shown in Appendix B) indicated that the LM and perceived items made up the first two factors and that the expectations factored into two factors: expectations of future performance and expectations of future. The two liking items made up the fifth factor. Items loaded cleanly on the intended factors with the exception of one complex loading for the Perceived Similarity factor. Thus, with the exception of the three cross-loaded items, the factor analysis results provided support for the validity of the Perceived Support, Expectations, Liking, and LM constructs. To be able to compare results of member perceptions with results of leader perceptions, we needed to select either the four- or the five-factor solution for both member and leader perspectives in constructing scales. When scales were created based on the five-factor solution, the two expectation scales were significantly correlated with one another both for the supervisor perceptions (r =.51, p < ) and for the member perceptions (r =.64, p < ). Using the five-factor solution would have resulted in multicollinearity problems, especially for the member perceptions. Because of the focus of our research on member perceptions as well as the multicollinearity problems occurring with the five-factor solution, we decided to use the members' four-factor solution for all scale construction. Leader appraisal of the member's performance. We summed seven items to assess the member's performance. The items and response scales were as follows: (a) "This subordinate is superior (so far) to other new subordinates that I've supervised before" (1 = strongly disagree to 7 = strongly agree); (b) "Rate the overall level of performance that you observe for this subordinate" (1 = unacceptable to 7 = outstanding); (c) "What is your personal view of your subordinate in terms of his or her overall effectiveness?" (1 = very ineffective to 7 = very effective); (d) "Overall, to what extent do you feel your subordinate has been effectively fulfilling his or her roles and responsibilities?" (1 = not effectively at all to 7 = very effectively). In addition, we used three items developed by Tsui (1984) that measure the extent to which the supervisor feels that the subordinate is fulfilling his or her roles. Responses for all seven items were made on 7-point scales (as =.93 and.93 at 2 weeks for Sample 1 and the Total Sample, respectively). LM as a Dependent Variable Because the focus of the current investigation was on early LM development, we were interested in variables that predicted LM. Thus, we examined the developmental process through a longitudinal

6 LEADER-MEMBER ECHANGE DEVELOPMENT 667 study of newly formed dyads. LM was the dependent variable in all analyses, not the independent variable as in virtually all previous LM research. Treatment of LM as a dependent variable allowed for a test of the relative importance of expectations, perceived, demographic, and performance on the type of LM that developed. Results Means, standard deviations, and correlations for all variables involved in analyses, including expectancies (i.e., Sample 1), are given in Table 2. Means, standard deviations, and correlations for all variables measured with the Total Sample are given in Table 3. Sample sizes vary because some participants failed to complete all surveys and because of missing responses on one or more items. Demographic Similarity, Expectations, and Performance as LM Predictors We used regression analyses to test our hypotheses. Hypotheses la, Ib, and Ic, concerning expectations, were tested with Sample 1 participants. Member LM at 2 weeks, 6 weeks, and 6 months was regressed on demographic, expectancies (first from the members' view and next from the leaders' perspectives), and performance at 2 weeks in six regression analyses, which are outlined in Table 4. The overall models for four of the six analyses were significant, with adjusted squared multiple correlations ranging from.08 to.37. The results provided support for Hypothesis la, because member expectancies of the leader during the first 5 days of the dyad's existence significantly predicted the member's view of LM at 2 weeks, 6 weeks, and 6 months. Results followed the same pattern, but were weaker, for the predictive power of leader expectations of subordinates on the member's view of LM, providing limited support for Hypothesis Ib. Demographic and performance ratings, relative to expectations, were not significant predictors of LM at any time period. In support of Hypothesis Ic, results (shown in Table 5) were quite similar for leader expectations of subordinates, which significantly predicted the leader's perception of LM at 2 weeks and at 6 weeks. Once again, demographic was not significant at any time period, and performance was significant only at 2 weeks (approaching significance at 6 months). Demographic Similarity, Perceived Similarity, Liking, and Performance as LM Predictors We regressed member LM at 2 weeks, 6 weeks, and 6 months on demographic, perceived and liking (each first from the members' views and next from the leaders' perspectives), and member performance. As shown in Table 6, the squared multiple correlations for the entire models were significant for five of the six models. Adjusted squared multiple correlations ranged from.09 to.59 for the significant models. The beta weights for member-perceived and for member liking were significant in predicting member LM at 2 weeks and at 6 weeks, and liking was also significant in predicting member LM at 6 months. Beta weights for leader liking of the member were significant in predicting member LM at 2 weeks and at 6 weeks and approached significance (p <.06) in predicting member LM at 6 months. Leader-perceived was not significant in predicting member Table 2 Means, Standard Deviations, and Correlations for Sample 1 Variable M SD 10 Dependent Employee perceptions 1. Member LM" 2. Member LM" 3. Member LM C Supervisor perceptions 4. Leader LM' 5. Leader LM" 6. Leader LM C *.41* *.14.26*.42* *.23.47* Independent 7. Demographic Employee perceptions 8. Member expectations' 1 Supervisor perceptions 9. Leader expectations' Performance' * * * *.48* * *.32*.34* * Note. Ns ranged from 52 to 82 because of missing data on any item or items making up the variables shown. LM = leader-member exchange. ' Measured at 2 weeks. b Measured at 6 weeks. c Measured at 6 months. d Measured at 0-5 days. * p <.05, two tailed.

7 668 R. LIDEN, S. WAYNE, AND D. STILWELL Table 3 Means, Standard Deviations, and Correlations for Total Sample Variable M SD Employee perceptions 1. Member LM" 2. Member LM" 3. Member LM C Supervisor perceptions 4. Leader LM" 5. Leader LM b 6. Leader LM C * * * Dependent.54*.18* * -.65*.31*.14.38*.48* Independent 7. Demographic Employee perceptions 8. Member-perceived *.56*.35*.23* 9. Member liking of leader" *.59*.50*.17* Supervisor perceptions 10. Leader-perceived " *.21* Leader liking of member* *.38* Performance' *.20* -.53*.41*.54* *.08.48*.41*.42*.24*.20*.49*.41*.36*.17* *.33*.29*.25*.25*.33*.25*.53*.64*.43* Note. Ns ranged from 114 to 166 because of missing data on any item or items making up the variables shown. LM = leader-member exchange. * Measured at 2 weeks. b Measured at 6 weeks. c Measured at 6 months. * p <.05, two-tailed. LM at any of the time periods. Beta weights were not significant for demographic nor for performance in any of the models. In summary, the results provided partial support for Hypothesis 3 (perceived ) and strong support for Hypothesis 4 (liking), but no support for Hypotheses 2 (performance) and 5 (demographic ). We also tested hypotheses involving the leader's reports of LM through regression analyses. Leader LM at 2 weeks, 6 weeks, and 6 months was regressed on demographic, leader-perceived, leader liking of the member, and member performance in three separate equations. The overall models were significant, as shown in Table 7. Adjusted squared multiple correlations were.35,.21, and.27 at 2 weeks, 6 weeks, and 6 months, respectively. Beta weights for perceived were significant in all three equations. Liking was significant in predicting leader LM at 6 weeks and at 6 months and approached significance at 2 weeks (p <.06). The beta weight for performance was significant only at 2 weeks, and demographic was not statistically significant in any of the models. In summary, similar to the results for member LM as Table 4 Member LM Regressed on Demographic Similarity, Member and Leader Expectations, and Performance Ratings for Sample I Independent variable (/3) Dependent variable Member LM 2 weeks Member LM 6 weeks Member LM 6 months Member LM 2 weeks Member LM 6 weeks Member LM 6 months Demographic Member expectations Performance F dfe.51**.63**- a.51** Demographic Leader expectations Performance *.25*.42** ** 13.07** 5.59** * 3,62 3,59 3,46 3,64 3,60 3,49 Adjusted R Note. LM = leader-member exchange. a Also significant at p < when Member LM at 2 weeks was controlled by being entered first in the regression equation. * p <. 10, two-tailed. ** p <.05, two-tailed.

8 LEADER-MEMBER ECHANGE DEVELOPMENT 669 Table 5 Leader LM Regressed on Demographic Similarity, Leader Expectations, and Performance Ratings for Sample 1 Dependent variable Leader LM 2 weeks Leader LM 6 weeks Leader LM 6 months Demographic Independent variable (0) Leader expectations.25**.46**.13 Performance.33**.05.27* F 7.81** 6.61** 2.75* dfe 3,70 3,65 3,50 Adjusted R 2 Note. LM = leader-member exchange. * Also significant at p <.05 when Leader LM at 2 weeks was controlled by being entered first in the regression equation. * p <. 10, two-tailed. ** p <.05, two-tailed the dependent variable, the results for leader LM provided strong support for Hypotheses 3 (perceived ) and 4 (liking) but virtually no support for Hypothesis 5 (demographic ) and only limited support for Hypothesis 2 (performance). To examine changes in LM over time, we reanalyzed all regression analyses that included LM at 6 weeks or at 6 months as the dependent variable and then force entered the measurement of LM at the immediately preceding time period as the first independent variable. As we expected, LM at the earlier time period was always a significant predictor of LM at the later time period. This points to the stability of LM over time, as has been shown in previous LM research (e.g., Graen & Cashman, 1975; Liden & Graen, 1980). Of greater interest, however, was that out of 18 significant beta weights for expectations, perceived, and liking in the prediction of LM at 6 weeks and at 6 months, 8 were still significant when we controlled for LM at the earlier time period. This indicated that expectations, perceived, and liking early in the relationship predicted variance in LM at later time periods that was not predicted by LM at earlier points in time. Table 6 Member LM Regressed on Demographic Similarity, Perceived Similarity, and Performance Ratings for Total Sample Dependent variable Member LM 2 weeks Member LM 6 weeks Member LM 6 months Member LM 2 weeks Member LM 6 weeks Member LM 6 months Demographic -.08 Independent variable (/?) Memberperceived.43** 42**.».08 C Member liking of leader.43**.33**' b.51** d Performance Leader- Leader Demographic perceived liking of member Performance **.32**.22* F 50.18** 27.54** 10.95** 4.34** 4.77** 0.96 tin 4, 133 4, 120 4,95 4,133 4, 124 4,97 Adjusted R 2 Note. LM = leader-member exchange. * Also significant at p <.05 when Member LM at 2 weeks was controlled by being entered first in the regression equation. " Also significant at p <. 10 when Member LM at 2 weeks was controlled by being entered first in the regression equation. "Significant at p <.10 when Member LM at 6 weeks was controlled by being entered first in the regression equation. d Also significant at p <.05 when Member LM at 6 weeks was controlled by being entered first in the regression equation. * p <. 10, two-tailed. ** p <.05, two-tailed

9 670 R. LIDEN, S. WAYNE, AND D. STILWELL Table 7 Leader LM Regressed on Demographic Similarity, Perceived Similarity, and Performance Ratings for Total Sample Independent variable (/3) Dependent variable Demographic Leaderperceived Leader liking of member Performance F dfs Adjusted R 2 Leader LM 2 weeks Leader LM 6 weeks Leader LM 6 months **.25**.36**-".15*.35**.19**.15 24*»,b Q ** 4, ** 4, ** 4, Note. LM = leader-member exchange. a Also significant at p <.05 when Leader LM at 6 weeks was controlled by being entered first in the regression equation. b Also significant at p <. 10 when Leader LM at 6 weeks was controlled by being entered first in the regression equation. * p <. 10, two-tailed. ** p <.05, two-tailed. Discussion The current investigation represents an initial attempt to examine the predictors of early LM development. Results of the study showed that leader expectations of members and member expectations of leaders, assessed from 0 to 5 days in the life of the dyad, were strong predictors of LM at 2 weeks and at 6 weeks. Member expectations of leaders also predicted member assessments of LM at 6 months. Performance ratings made at 2 weeks were significant only in predicting the leaders' perceptions of LM at 2 weeks (approaching significance at 6 months). Particularly interesting was the finding that leaders' expectations of members, assessed during the first few days of the dyad's existence, were much better predictors of the leaders' perceptions of LM at 6 weeks than were their evaluations of subordinates' performances at 2 weeks. Leader and member perceptions of and liking based on 2 weeks of working with each other followed the same pattern as the findings for expectations. From both leader and member perspectives, liking significantly predicted LM at all but one time period. Perceived was also a significant predictor of LM, but only when both variables were assessed from the same source. Demographic was not significant in the prediction of leader or member perceptions of LM at any of the time periods. And, perhaps most interesting, supervisory performance ratings of subordinate performance at 2 weeks significantly predicted leader perceptions of LM only at 2 weeks. This finding brings into question LM theorizing that has portrayed performance as the dominant variable in LM development (Graen, 1976; Graen & Scandura, 1987). The results reported here suggest that affective variables, such as expectations, perceived, and liking, can also be important in the development of LMs. Although only additional research can determine the relative importance of affective variables and performance in LM development, it is clear that affect plays an important role. The salience of nonperformance variables provides support for Dienesch and Liden's (1986) suggestion that LM is a multidimensional construct, not a unidimensional construct based primarily on subordinate performance. It might be argued that 2 weeks does not allow for enough role episodes (Graen & Scandura, 1987; Kahn et al., 1964) to occur and thus enable performance to emerge as a significant predictor of LM. However, the stability of LM from 2 weeks to 6 months indicates that the effect that performance might have on LM development should have taken place within the first 2 weeks. Furthermore, if only a few role episodes occur, it is likely that these episodes would be important to LM development during the first 2 weeks, because at this time the leader is in the process of forming an impression of the member's job-related capabilities. On the other hand, once an impression is formed, it is much more difficult to change (J. Feldman, 1986), suggesting that later performance episodes may be less important than initial performance. Future research is needed to directly examine the relative importance of initial versus later performance for LM. The power of expectations in predicting LM at later points in time suggests that LMs develop very early in the life of the dyad. Leaders and members who expressed high expectations of each other when first starting their relationships tended to report a high-quality exchange at later points in time. In addition to the importance of this finding for LM theory, it also represents an extension to the literature on expectations, which has been largely based on studies conducted in educational and military settings. In fact, the current study represents one of only a handful of studies on expectations in organizational settings and also one of few investigations to examine naturally occurring, rather than manipulated, expectations. In addition, although studies have examined the influence of member expectations concerning the job and later responses in realistic job-preview research (Wanous & Colella, 1989), member expectations of the supervisor and resulting outcomes, such as LM, have not been investigated. The results of the current study suggest that both member and leader expectations may influence the development of LM. The effects for perceived in LM development

10 LEADER-MEMBER ECHANGE DEVELOPMENT 671 provide an important extension to work on. Just as has been shown to be related to liking (Byrne, 1971) and to performance ratings (Pulakos & Wexley, 1983; Turban & Jones, 1988), it is also significantly related to LM and appears to play an important role in LM development. The results of the current investigation showed that perceived had a much more pronounced effect on LM than did demographic. This result parallels Turban and Jones's (1988) finding that perceived was a much stronger predictor of performance ratings than was demographic. Although perceived and liking were significantly correlated, their effects were not redundant, as both variables had significant beta weights in several of the regression analyses. Liking appeared to be the dominant predictor of LM, as both leader liking of the member and member liking of the leader significantly predicted LM from the member's perspective. On the basis of our results and those of others that have recognized the importance of perceived and liking, we believe that further studies are needed to explore the determinants of these perceptions with respect to leaders and members in organizational settings. Literature from social psychology and communications might provide a basis for such research efforts. For example, impression management behaviors may be used by leaders, by members, or by both to create the appearance that one individual is similar to the other individual, with the intent of inducing liking (e.g., Liden & Mitchell, 1988,1989). Studies in organizational settings exploring are needed to enhance our understanding of this type of person perception. Cognitive information-processing models (e.g., J. Feldman, 1986; Ilgen & Feldman, 1983) provide a framework for explaining the results of this study and the underlying processes that may occur in LM development. J. Feldman suggested that at the beginning of the leader-member relationship, the leader's automatic, or controlled, processes produce a categorization of the member. The factors that influence the categorization process, such as salient characteristics and behaviors, are numerous and complex (Ilgen & Feldman, 1983; Lord, 1985). On the basis of this categorization of salient cues, the leader develops expectations for the member. In turn, these expectations influence the quality of interaction between leader and subordinate. The results of this study were consistent with this framework in that it seemed that the categorization process developed early and that initial expectations influenced the development of LM. The main weakness of our study was that only a portion of the total sample had worked 5 days or less when beginning their participation in the study. Also, as with most longitudinal studies, some subject mortality occurred across the duration of the study, and the multiple assessments across time introduced the possibility of testing effects in which responses on one questionnaire might influence responses on a subsequent questionnaire. The main strength of our study was its focus on the early development of LMs. Dansereau et al. (1975) found that LMs were already established by the second month that supervisors and subordinates had been working together. Results of that study as well as theoretical work pn LM suggested that LMs develop very early in the life of the dyad. Our investigation, in capturing supervisor and subordinate perceptions of one another during the first 2 weeks of the dyad's existence, provides empirical evidence that LMs tend to form very quickly. Another area of concern here was the low level of convergence between leader and member views of LM. A review of past LM research revealed that in most studies LM has been measured only from the member's point of view, thus eliminating the possibility of assessing leader-member convergence (e.g., Kozlowski & Doherty, 1989; Scandura & Graen, 1984; Seers & Graen, 1984; Vecchio & Gobdel, 1984; and Wakabayashi et al., 1988, all rely exclusively on member reports of LM). An exception is a study by Scandura et al. (1986) that reports a correlation of.24 (ns) between leader and member reports of LM. This correlation is very close in magnitude to the correlations reported in our study. (Because of greater statistical power in our study than in Scandura et al., 1986, three of the six convergent validities that we reported were statistically significant.) Scandura et al. (1986, p. 581) and Graen and Scandura (1987) have noted that the "main difficulty with this and other measures of the dyad taken from the superior's point of view is the tendency for superiors to respond somewhat defensively and give 'socially desirable' answers" (p. 191). In support of this argument, in both Scandura et al. and our study the LM means were larger and the variances smaller for leader reports than for member reports. Our study's longitudinal design and our collection of data from both leaders and subordinates reduced the plausibility of common-method-variance explanations for the results. But, as we expected, the regression results were stronger for models involving perceptions from the same source. However, for these same source regression analyses, the fact that some of the effects for expectations, perceived, and liking remained significant when we controlled for LM at earlier time periods provides evidence that common method variance is not a likely explanation for the results. If common method variance had been a serious problem, all variables related to perceptions of the leader-member relationship would have been so highly related that expectations, perceived, and liking would not have remained significant when we controlled for LM at earlier time periods. Future research should investigate LM development in a variety of organizational settings so that external validity can be established. The indication that LMs become established very early in the life of a dyad suggests that it may be useful to commence data collection during the job interview phase rather than waiting until formal employment begins. Final interviews are often conducted by future supervisors, and the employment interview literature indicates that interviewers often develop strong impressions of applicants before and during job interviews (e.g., Phillips & Dipboye, 1989). These impressions may influence initial job interactions between leader and subordinate and, in turn, LM development. In addition, applicants may also form strong impressions of their future superiors. Finally, results showing differences between job changers and new hires in the socialization process (e.g., D. Feldman & Brett, 1983) suggest that differences between these two types of

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