The Role of Emotional Intelligence in the Quality of Leader-Follower Relationship

The Role of Emotional Intelligence in the Quality of Leader-Follower Relationship Authors: Dr Nicholas Clarke* Nomahaza Mahadi** * Senior lecturer in Organisational Behaviour and HRM, School of Management, University of Southampton, Highfield, Southampton, United Kingdom SO17 1BJ ** Doctoral Candidate at School of Management, University of Southampton, Highfield, Southampton, SO17 1BJ. Contact: n.r.clarke@soton.ac.uk Submission Type: Refereed Paper Submission Stream: Leadership and Management Development

ABSTRACT Researchers in the field of leadership are increasingly turning their attention to the concept of emotional intelligence (EI) in order to better understand how aspects of individual difference may help to explain variations in leadership behaviour (Jordan, Ashkanasy & Daus, 2008; Mayer, Robert & Barsade, 2008). Theoretical arguments have been advanced that suggest emotional abilities or competences enable individuals to use emotion more effectively that can result in positive work attitudes, pro-social behavior and greater leadership potential (Fisher, 2000; Charbonneau & Nicol, 2002; Higgs & Aitken, 2003). Alongside this literature, research in the field of emotion regulation has also suggested that this ability plays a central role in the development of high quality relationships (Eisenberg et al., 2000). Researchers have argued that people with high EI are able to perceive and regulate theirs and others emotions more effectively such that their emotional responses are more appropriate. Such abilities are therefore of important use in social interaction (Baron & Rarker, 2000). Indeed, previous studies have found EI to be associated with the selfperceived quality of interpersonal relationships (Walden & Smith, 1997; Lopes et al., 2003). However, far too little attention has been paid to date, in the literature to investigate the impact of EI on the quality of leader-follower relationships. A large and growing body of literature has investigated the relationship between EI and leadership effectiveness (Antonakis, Ashkanasy & Dasborough, 2009). Recent empirical evidence suggests that leaders stimulate emotional responses in employees in work settings (Dasborough, 2006). A number of studies have found that EI has significant relationships with transformational leadership (Palmer et al., 2001; Brown et al, 2006; Butler & Chinowsky, 2006; Mandell & Pherwani, 2003; Barling et al., 2000, Leban & Zulauf, 2004). In addition, a relationship exists between high performers and EI (Cavello & Brienza, 2000). Kerr et al. (2006) showed that individual s EI as a key predictor of effective leadership, while Rosete & Ciarrochi (2005) found that EI is related to a leader s effectiveness. It has been demonstrated that the component of emotional self-awareness as a main contributor to general managers performance (Langhorn, 2004). Kellett et al. (2006) showed that a leader s EI associated on subordinate perceptions of leadership effectiveness. Studies also suggested that a team leader s EI affects team level emotional competence and team performance (Koman & Wolff, 2008; Wolff, Pescosolido & Druskatt, 2002; Pirola- Merlo et al., 2002). Many theories have appeared on the subject leadership which has been studied from various perspectives by researchers. However, most of the traditional leadership theories are limited because it only considers at the quality of the leaders and only operates at the level of the leaders (Dansereau, Graen & Haga, 1975). Leader- Member Exchange (LMX) theory refers to the different types of exchange relationships between leaders and their followers (Liden, Sparrowe & Wayne, 1997; Graen & Uhl-Bien, 1995). LMX captures leadership far more effectively than other leadership theories because LMX focuses on leadership at the level of the relationship between the leader and an individual follower (Graen and Uhl-Bien, 1995; Gerstner & Day, 1997). Dasborugh & Ashkanasy (2002) argued that LMX relationship quality is enhanced through EI because this leadership approach is inherently emotional. Wong & Law (2002) have argued along similar lines that leadership is about the interaction of leaders with other individuals. Rafaeli & Worline (2001) highlighted that leaders 1

are not only responsible for their own emotions, but also for the emotions of those individuals under their supervision. Indeed, according to notable scholars such as Caruso, Mayer & Salovey (2002), leaders who are high on using emotions tend to stimulate open-minded decision making, planning and idea generation. Prati et al (2003) also proposed that leader EI plays a significant role in motivation, charismatic leadership, and transformational leadership. Other scholars suggested that study on EI and leadership effectiveness needs to be focused on those leadership relationship approaches (Jordan, Ashkanasy & Daus, 2008; Uhl-Bien, 2006). One of the limitations with the current literature in LMX study is that none of the study investigating the moderating effect of EI between LMX and it outcome variables because all of the LMX studies conducted so far were looking at LMX associated with task performance, organizational citizenship behaviour, job satisfaction, turnover intention and organizational commitment (Gerstner & Day, 1997; Greguras & Ford, 2006; Wayne & Ferris, 1990; Hofmann, Morgeson & Gerras, 2003; Janssen & Van, 2004; Graen, Novak & Sommerkamp, 1982). Other limitations of the LMX study such as limited generazalibity because small number of occupations within the organizational structure has been studied and no standard model which refers to the dimensionality of LMX relationship (Burn & Otte, 1999). While, increasing studies examining the impact of EI in the leadership are appearing in the literature, however, there are limits to what extent the idea of leadership relationship development can be taken. This study aims to examine the role of dyad Emotional Intelligence in moderating the relationship between leader-member exchange (LMX) and subordinate outcomes. The study used a cross-sectional design and measures collected through the use of a questionnaire. The participants were 203 matched leader-subordinate dyads in a Malaysian Insurance company. Based upon hierarchical regression analysis, the results showed that the combination of both leader and member emotional intelligence (dyad EI) moderated the relationship between leader-member exchange and a number of important work related outcomes. The results suggest that emotional intelligence can help leaders and subordinates to facilitate stronger identification and emotional attachments with each other. Keywords: Emotional Intelligence, Leader-Member Exchange, quality relationship, moderating effects 2

Introduction Researchers in the field of leadership are increasingly turning their attention to the concept of emotional intelligence (EI) in order to better understand how aspects of individual difference may help to explain variations in leadership behaviour (Jordan, Ashkanasy & Daus, 2008; Mayer, Robert & Barsade, 2008). Many of the arguments advanced in support of this proposition arise from an increasing recognition that leadership is intrinsically an emotional process (George 2000; Megerian & Sosik 1996). Previous perspectives on leadership have tended to focus predominantly on associated cognitive and behavioural dimensions whilst ignoring the role emotion plays in leadership processes. Researchers have argued that people with high EI are able to perceive and regulate theirs and others emotions more effectively such that their emotional responses are more appropriate. Such abilities are therefore of important use in social interaction (Baron & Rarker, 2000). Indeed, previous studies have found EI to be associated with the self-perceived quality of interpersonal relationships (Walden & Smith, 1997; Lopes et al., 2003). Importantly leadership practices that foster positive affectivity have been found to be associated with important job and work related outcomes. Both Pirola- Merlo et al (2002) and Sy, Cote & Saavedra (2005) for example, have found that increased team performance was associated with team leaders fostering positive team climates. McColl-Kennedy & Anderson (2002) showed that transformational leadership behaviours helped employees to feel more optimistic and deal more effectively with frustrating events at work. More recently, Ozcelik, Langton & Aldrich (2008) found that leadership practices that were linked to creating a positive emotional climate were associated with organizational performance. George (2000) described in detail how emotional intelligence might be expected to be associated with these leadership processes. She suggests for example that leaders who are able to effectively appraise and manage emotions, are able to generate far more compelling visions for their followers resulting in higher levels of motivation. Connecting on an emotional level with followers is also thought central to developing higher levels of trust and commitment (Jones & George 1998; Sosik & Mergerian 1999). Leban & Zulauf (2004) suggest that project managers who understand the moods and emotions of stakeholders can help them to make better decisions about how strategies should be presented and therefore are able to gain greater goal acceptance from followers. Given that emotional abilities have been found to be associated with greater self-perceived quality of interpersonal relationships (Walden & Smith, 1997; Lopes, Salovey & Straus 2003), emotional intelligence abilities may be particularly salient when considering leadership terms of a relational activity between leaders and followers (Antonakis, Ashkanasy & Dasborough 2009). Elsewhere in the leadership literature relational measures of leadership derived from leader-member exchange theory have been found to be associated with important work related outcomes (Uhl- Bien 2006). Based on the theoretical arguments outlined above regarding the emotional nature of leadership, it would be reasonable to expect that leaders high in emotional intelligence are more likely to form higher quality relationships with their followers. This study tests this proposition by investigating whether emotional intelligence moderates the relationship between a measure of Leader-Member Exchange (LMX) and important work-related outcomes within in Malaysia. Data was collected from a sample of matched leader-subordinate dyads in an Islamic Insurance company. LMX was found to be positively associated with organizational citizenship 3

behaviour, job satisfaction, organizational commitment, psychological well-being and in-role performance. However the relationship between LMX and job satisfaction, LMX and organizational commitment, LMX and psychological well-being, and LMX and in-role performance was also found to be moderated by emotional intelligence. The findings suggest that emotional intelligence can help leaders and subordinates to facilitate stronger identification and emotional attachments with each other. Background Literature Leader-Member Exchange (LMX) refers to the quality of the interpersonal exchange relationship between a subordinate and his/her supervisor (Graen, 1976; Uhl-Bien, 2006). This theory focuses on leadership at the level of the relationship between the leader and an individual follower (Graen and Uhl-Bien, 1995). LMX theory was developed by Graen, Dansereau, and colleagues (Graen and Cashman, 1975) originally referred to as Vertical Dyad Linkage (VDL) model of leadership (Dansereau, Graen and Haga, 1975). The approach of VDL is focused on the dyad/relationship between the leader and the individual member by allowing the discrepancy between dyads in a workgroup (Dansereau, Cashman and Graen, 1973). The theoretical basis of LMX theory is that dyadic relationship and work roles are developed over time and marked by a high degree of trust and respect, where both leader and member share mutual goals and obligations. Further, LMX captures the perceived strength of the relationship that members have with their leader. A number of empirical studies indeed have demonstrated that when a subordinate develops a high quality relationship with his or her leader, it leads to valuable outcomes such as task performance, organizational citizenship behaviour (OCB), satisfaction, job performance, turnover and organizational commitment (Gerstner & Day, 1997; Greguras & Ford, 2006; Wayne & Ferris, 1990; Hofmann, Morgeson & Gerras, 2003; Janssen & Van YPeren, 2004; Graen, Novak & Sommerkamp, 1982; Scandura & Graen, 1984). Many traditional leadership theories are limited because they focus primarily on the qualities of leaders and have ignored the importance of followers in the leadership relationship (Liden, Sparrowe & Wayne, 1997; Graen & Uhl-Bien, 1995). Dasborough & Ashkanasy (2002) argued that LMX relationship quality is enhanced through emotional intelligence because leadership approach inherently emotional. Wong & Law (2002) have argued along similar lines that leadership is about the interaction of leaders with other individuals. Specifically in relation to LMX theory, both Kram & Cherniss (2001) and more latterly Smith (2006) have also argued that relationship quality is partially a function of the baseline level of emotional intelligence each person brings to the relationship (p. 180). The amount of empirical research supporting a relationship between emotional intelligence and leadership has been increasing over the past decade. Much of this literature can be characterized by studies which have used mixed model measures of EI (Barling, Slater and Kelloway 2000; Brown, Bryant and Reilly 2006; Butler & Chinowsky 2006; Mandell and Pherwani 2003; Sivanathan and Fekken 2002; Muller & Turner 2007), although the number of studies using ability model conceptualisations has also been increasing (Clarke 2010; Kerr, Garvin, Heaton & Boyle, 2006; Leban & Zulauf 2004; Rosete and Ciarrochi 2005). In the majority of these studies however, the leadership criterion of interest has been measures of transformational leadership, and studies have generally found positive results for a relationship here. In presenting findings from a study investigating the moderating role of ability emotional intelligence in leader-member exchange, we make a significant contribution to the leadership literature. We do this in four major ways. 4

Firstly, our positive findings more generally join the growing literature supporting the affective nature of leadership. Secondly, our findings offer support for those theoretical arguments that have suggested emotional intelligence is likely to be more relevant to leadership when viewed as a relational activity. Next in using a dyad measure of emotional intelligence based upon a previous measure of EI drawn from the literature we offer further data to validate this measure. Finally, in demonstrating positive relationships between leader-member exchange and a number of work related variables we support the generalisation of LMX theory within a Malaysian context. Examining the relationships between leader-member exchange, emotional intelligence and work-related outcomes LMX, EI and organizational citizenship behaviour (OCB) Podsakoff, Ahearne & Mackenzie (1997) suggested that organizations who employ individuals who exhibit high levels of organisational citizenship behaviour are more likely to have effective work groups within their organization. Past research has found the quality of leader-member exchange to be positively related to OCB (Setton et al., 1996; Hofmann, Morgeson & Gerras, 2003; Lapierre & Hackett 2007; Wayne, Shore & Liden, 1997; Deluga, 1998 ). Studies have also shown positive relationships between OCB and emotional intelligence (Sitter, 2005; Van Dyne et al, 1994). Individuals who exhibit emotional intelligence should be more likely to decipher the intentions of others to perceive situations in a more positive light (George, 1991). In addition, one might expect that individuals who in positive emotion may foster OCB (Organ, 1990). In this respect, individuals who exhibit emotional intelligence may adapt themselves with others optimally and accommodate the needs of others. As such they would encourage others to exhibit behaviours that benefit organizational outcomes and enhance organizational members. This leads to our first hypothesis: H 1: The relationship between Leader-Member Exchange and organizational citizenship behaviour is moderated by emotional intelligence LMX, EI and turnover intention A significant body of research has been found LMX negatively relates to turnover intention (Ansari, Kee, & Aafaqi, 2000; Harris, Kacmar & Witt, 2005; Wayne, Shore & Liden, 1997). Elsewhere research investigating LMX within executives perception of relationship quality with their superior has found negative relationships LMX and withdrawal intention (Bauer, Erdongan, Liden & Wayne 2006). Previous research has found a significant negative relationship between emotional intelligence and turnover intention (Carmeli, 2003). Emotional intelligence may enable individuals to be more tolerant of stressful situations. Therefore we might expect to see a negative relationship between LMX and turnover but only for individuals low in emotional intelligence. This gives rise to our second hypothesis: H 2: The relationship between Leader-Member Exchange and turnover intention is moderated by emotional intelligence LMX, EI and job satisfaction The relationship between member perception of relationship quality and job satisfaction is consistent across samples from a variety of organizational types. Epitropaki and Martin (2005) found a correlation between relationship quality and job 5

satisfaction in a sample of 439 British manufacturing and service employees. Similarly a positive relationship was found between relationship quality and job satisfaction from a sample study of 210 grocery store workers (Erdongan and Enders, 2007). According to Cooper (1997), if emotions are being recognized and dealt with appropriately, this should create reassurance and commitment, which in turn should increase job satisfaction. Patra (2004) found that emotional intelligence was positively associated with employees job satisfaction whilst Wong & Law (2002) found that emotional intelligence had a strong positive effect on job satisfaction regardless of the nature of the job. This leads to our third hypothesis: H 3: The relationship between Leader-Member Exchangeand job satisfaction is moderated by emotional intelligence LMX, EI and organizational commitment Previous works have shown that LMX has significant relationships with many work outcomes such as organizational commitment (Bhal and Ansari, 2007; Duchon, Graen & Taber 1986; Liden, Wayne & Sparrowe 2000; Kee, Ansari & Aafaqi, 2004; Wayne, Shore & Liden, 1997). Hence, the quality of LMX relationship has been considered fundamental to employee attitudes and behaviour (Napier and Ferris, 1993). Employees may have a sense of commitment to the organisation because they have grown attached to their leaders. In a meta-analytic review, researchers have found that affective and normative commitment is generally related to positivelyvalenced antecedents and outcomes (Clarke 2005; Meyer & Herscovitch, 2001). Previous research has also found that leaders are able to influence the emotional states of employees (George, 1995; Sy & Cote, 2005). This being the case we would expect the relationship between LMX and organizational commitment to be strongest where EI is high. This gives rise to our fourth hypothesis: H 4: The relationship between Leader-Member Exchange and organizational commitment is moderated by emotional intelligence LMX, EI and in-role performance The literature on LMX provides support for a link between LMX quality and job performance (Graen, Scandura, & Graen, 1986; Liden and Maslyn, 1998). A meta-analysis by Gerstner and Day (1997) also found LMX quality to be positively related to job performance. Zellars, Tepper & Duffy (2002) found that job performance is influenced by the relationship that exists between an employee and their leader. More recently, Golden & Veiga (2008) concluded that the job performance impact appears greater for those with higher LMX relationships. This gives rise to our fifth hypothesis: H 5: The relationship between Leader-Member Exchange and in-role performance is moderated by emotional intelligence LMX, EI and psychological well-being LMX theory describes the manager-employee dyadic transactions which have been found to affect employees well-being and work attitudes (Dienesch & Liden, 1986). This is consistent with existing studies that shown for a positive association between LMX and well-being (Nelson, Basu & Purdie, 1998; Epitropaki & Martin, 1999, 2005). More recently research has found a significant positive relationship 6

between emotional intelligence and subjective well-being (Kulshrestha & Sen, 2006). It is argued that individuals with high emotional intelligence may use their abilities to manage emotions in order to develop good social relationships (Wong & Law, 2002) and thus, enhance social support (Pearce & Randel, 2004). This in turn may contribute towards psychological well-being. This gives rise to final two hypotheses: H 6a: The positive relationship between Leader-Member Exchange and psychological well-being (satisfaction with life) is moderated by emotional intelligence H 6b: The positive relationship between Leader-Member Exchange and psychological well-being (subjective happiness) is moderated by emotional intelligence The Study and Methods An Islamic Insurance Company with offices throughout Malaysia agreed to take part in this research. Individuals occupying senior supervisory roles, usually heading teams were defined as leaders for the basis of this study. A total of 280 matched leader-dyads were eligible to take part in the study. Measures of emotional intelligence, LMX and work-related outcomes were received from 203 matched leader-subordinate dyads, or 72.5%. The majority leaders were male (54%) and their ages ranged from 31 to 55 years old. Sixty three percent of these leaders have been working with the current organization for more than 5 years. Their lengths of supervisions with the subordinate were as follows: sixteen percent was less than 1 year; twenty three percent was between 1 3 years; twenty four percent was between 3 5 years; and thirty seven percent was more than five year. The subordinates were sixty nine percent female and thirty one percent male, with ninety four percent of Malay, three percent of Chinese, two percent of Indian and others (1%). Their ages ranged from 20 to 50 years old. Procedure Questionnaires for collecting measures were sent to both leaders and their followers at the same with a request that they return them within two weeks. All questionnaires were coded so that leaders could be matched to the appropriate follower from their team. The questionnaire was translated into Malay language using a back-translation method by one of the authors. A professional translator who was blind to this study was hired to translate the Malay version questionnaire into the English version. Then, comparison was made between the back-translation and original questionnaire. Some discrepancies were found with some of the questions examined and the questions were redrafted. Measures (1) Leader-Member Exchange (LMX) (Follower) The follower s perception of the leader-member exchange relationship was measured using the 9-item LMX scale by Liden & Maslyn (1998). This measures three dimensions: affect (3 items), loyalty (3 items), and contribution (3 items). At the same time a specific 8-item measure of respect was developed for use within an Islamic context given recent theoretical developments suggesting limitations with existing measures of respect used in leadership research (Clarke, in press a). This is reported elsewhere (Clarke & Mahadi forthcoming). Sample items include We are both tolerant towards each other if either of us makes mistakes. An overall measure of leader LMX was obtained by summing both Respect and SLMX scores. Reliability 7

coefficients for each of the scales were as follows: Affect=0.91, Loyalty=0.87, Contribution=0.67, Respect=0.93. (2) Leader-Member Exchange (LMX) (Leader) The leader s perception of the leader-member exchange relationship was measured using the 9-item SLMX scale (Greguras & Ford, 2006). This uses identical items to the subordinate LMX measure above allowing for slight changes in wording. The 8- item measure of Islamic Respect was also included and an overall measure of Subordinate LMX obtained by summing all items. Reliability coefficients for each of the scales were as follows: Affect=0.94, Loyalty=0.89, Contribution=0.75, Respect=0.95. (3) Dyad Leader-Member Exchange (LMX) An overall measure of relationship quality at the dyad level was obtained by summing both leader and subordinate measures of LMX and dividing by 2. (4) Emotional Intelligence The peer report of Workgroup Emotional Intelligence Profile (WEIP-3) (Jordan et al., 2002) was used to obtain a dyad measure of emotional intelligence. The WEIP-3 comprises 26 items used to measure emotional intelligence that is derived from an ability conceptualisation of EI (Mayer & Salovey 1997). Responses to items are given on a 7-point scale where 1= strongly disagree and 7= strongly agree. The wording of items differed only in relation to whether the questionnaire was being completed by the leader or follower. So in the follower s case a sampler item read: When my manager is angry, she/he can overcome that emotion quickly, whilst on the leader questionnaire an item read, This subordinate seldom mentions that he/she have an initial feeling that something is right or wrong when working with this relationship. The reliability for this measure was 0.91. A dyad score of emotional intelligence was obtained by summing both leader and follower WEIP-3 scores and then dividing by 2. (5) Organisational Citizenship Behaviour (OCB) Self assessed measures of organisational citizenship were obtained from followers using a 6-item scale developed by Williams & Anderson (1991). Sample items include: I help others who have been absent. The measure was assessed on fivepoint scale (ranging from 1 = strongly disagree to 5 = strongly agree). The Cronbach alpha for this measure was 0.67. (6) Job Satisfaction A measure of job satisfaction was obtained from followers using a 6-item measure developed by Tsui, Egan & O Reilly (1992). Items were ranged from 1 = very dissatisfied to 5 = very satisfied. A sample item included How satisfied are you with the pay you receive for your job? The Cronbach alpha for this measure was 0.79. (7) Organizational commitment Followers completed three items of affective organization commitment from Meyer, Allen & Smith (1993). Sample items included: I would be very happy to spend the rest of my career with this organization, All items responses for this study were scaled from 1 = strongly disagree to 7 = strongly agree. The reliability score obtained here was α=0.81. 8

(8) Psychological Well-Being (PWB) Two measures of psychological well-being were obtained from followers. The first, satisfaction with life consists of 5 items developed by Diener, Emmons, Larsen & Griffiths (1985). Sample items include: I am satisfied with my life. The second was a 4-item measure of subjective happiness (Lyugomirsky & Lepper, 1999). Sample items include: Some people are generally very happy. They enjoy life regardless of what is going on, getting the most out of everything. To what extent does this characterization describe you? All items were scored on 7-point scales. Reliability scores for the first and second measures were 0.78 and 0.67 respectively. (9) Follower turnover intention This measure was based on a 3-item measure developed and validated by Mobley, Horner & Hollingsworth (1978). This scale assesses the intention of employee to withdraw from his/her organization. Sample items include: I think a lot about leaving the organization. All items were scored on a 5-point scale. The coefficient alpha value in this study was 0.83. (10) Follower performance Leaders rated the follower in their dyad on their in-role performance. Scores were obtained using a 7-item measure of in-role performance developed by Williams & Anderson (1991). This assesses the leaders judgement of the subordinates level of achievement in their assigned job duties. Sample items include This subordinate adequately complete assigned duties. Al responses were scored on a 5-point scale, ranging from 1= strongly disagree to 5 = strongly agree. The Cronbach alpha for this measure was 0.86. (11) Control Variable Length of supervision was treated as control variable to avoid potential confounding effects on dependent variables (Kamdar & Van Dyne, 2007; Varma & Stroh 2001). As previous study by Philips & Bedeian (1994) found this attribute to be related to supervisor s affect toward subordinates. Data Analyses Statistical analyses were conducted using SPSS 16. The hypotheses are tested by performing seven hierarchical moderated regressions analyses with organizational citizenship behaviour, job satisfaction, organizational commitment, turnover intention, psychological well-being (satisfaction with life and subjective happiness) and job performance as the respective dependent variables. In each of these regressions, length of supervision as control variable was entered in Step 1, LMX and dyad EI as main effect variables were entered in Step 2, and the interaction term of LMX and dyad EI were entered in Step 3. Results The role of dyad EI as a moderator variable was identified from the significance of the interaction coefficient between the interaction terms (LMX x dyad EI). The role of dyad EI as a moderator variable is analysed using a moderator model (Baron and Kenny, 1986). The interaction effect between LMX and dyad EI was analysed using a hierarchical moderated regression model, and the interaction was modelled by including a product term as an additional independent variable (Aiken and West, 9

1991). The interaction tests whether the higher relative scores on dyad EI will increase the magnitude of the effect between LMX and work related outcomes. The main problem with moderated regression analysis is the multicollinearity. The cross product terms (the additional variable) are most likely to be strongly correlated with the individual variables included in the regression analysis. To overcome the problem of multicollinearity between the main effects and the interaction effects, Aiken and West (1991) suggest the predictor and moderator are transformed into a centred score. A centred score for each variable is computed by subtracting the mean value of the variable from the original scores. Therefore, the product terms are also the product terms of the centred score. By centring the variables and computing the interaction term as the product of the centred scores, it does not change the coefficient of the interaction term nor its significance level (Aiken and West, 1991). Results of the hierarchical moderated multiple regressions for the interaction effect between LMX and dyad EI are shown in Tables 2 and 3. Interaction terms for LMX and dyad EI were significantly related to the following dependent variables: (1) job satisfaction (β=0.17, p<0.05), (2) organizational commitment (β=0.125, p<0.05), (3) PWB satisfaction with life (β=0.165, p<0.05), (4) PWB subjective happiness (β=0.138, p<0.05), and (5) in-role performance (β=0.209, p<0.01). The results of the hierarchical moderated multiple regressions for the interaction effect between LMX and dyad EI show evidence that the exploratory power of the model increases because of the inclusion of the interaction term. As can be seen in Table 2, an additional 5.1% of variance (ΔR 2 = 0.051, p<0.05) in job satisfaction was explained by the inclusion of the interaction term. The increasing of 1.5% of variance (ΔR 2 = 0.015, p<0.05) in organizational commitment was explained by the inclusion of the interaction term. Table 3 shows the outcomes variables that are PWB satisfaction with life, PWB subjective happiness, and job performance were explained by the inclusion of the interaction term of the additional 2.6% of variance (ΔR 2 = 0.026, p<0.01), 1.8% of variance (ΔR 2 = 0.018, p<0.05), and 4.1% of variance (ΔR 2 = 0.041, p<0.01) respectively. However, the moderated regression models for the interaction effect between LMX and dyad EI on OCB (β=0.199, p>0.05), and turnover intention (β=-0.077, p>0.05) as shown in Table 2 were not statistically significant. Therefore, this indicates that dyad EI may not play a role in influencing the strength of LMX between these two dependent variables. Looking at the LMX and dyad EI as main effect variables (variables entered in Step2) in Tables 2 and 3, it was shown that the standardized coefficients for these main effect variables were significant at p<0.05 for job satisfaction with β=0.228 for LMX and β=0.179 for dyad EI; organizational commitment with β=0.258 for LMX and β=0.305 for dyad EI; PWB satisfaction with life with β=0.172 for LMX and β=0.185 for dyad EI; and in-role performance with β=0.196 for LMX and β=0.214 for dyad EI. Meanwhile, for the main effects variables in OCB and PWB subjective happiness only shown that beta coefficient for LMX was statistically significant at p<0.05 with β=0.173 and β=0.287 respectively. Result shows that the beta coefficient of LMX and dyad EI were not significant when regressed against turnover intention. Discussion The results demonstrated that dyad emotional intelligence in this study emerged as a significant moderator for the relationship between Leader-Member Exchange and a number of important work-related attitudes and outcomes. A measure of dyad emotional intelligence was found to moderate job satisfaction, organizational commitment, psychological well-being and in-role performance. These results suggest 10

that where both leaders and followers have high emotional intelligence then the positive relationships between LMX and its outcomes are stronger. A possible explanation for this might be that the leader-follower dyad facilitates stronger identification and emotional attachments with each other. This would correspond with arguments that individuals with high emotional intelligence are able to perceive and regulate the emotions of themselves and others in adaptive ways that facilitate social interaction (Dasborough & Ashkanasy, 2002). Lopes et al (2003) for example have previously found a significant association between emotional intelligence and the selfperceived quality of interpersonal relationships. Similarly Walden & Smith (1997) have argued that emotion regulation is a social process that occurs within the context of social interactions and social relationships. People who can adjust the experience of emotional under or over arousal and the release of emotion are more likely to express socially appropriate emotions. Other authors have also argued that people with high emotional intelligence seem to be high in recognising others emotions and therefore also ought to be high in quality of relationships (Ciarrochi et al., 2000). Dasborough (2006) found that individuals with low emotional intelligence showed less intense emotional responses to leader-follower interactions, as compared to high emotional intelligence individuals who had better understanding of their emotional states. Findings obtained from previous studies on emotions research stated the emotions that leaders express toward subordinates, whether positive or negative; influence the emotional states of the subordinates (George, 1995; Sy, Cote & Saavedra, 2005). Importantly these findings support the arguments laid out by Ashkanasy & Dasborough (see Antonakis, Ashkanasy & Dasborough, 2009), where they emphasize that relationship type outcomes such as LMX are more likely to be associate with emotional intelligence. Surprisingly, results in this study did not find that EI moderated the relationship between LMX and turnover intention nor organizational citizenship behaviour. There are a number of possible reasons that caused the insignificant results for this study. It may be that the responses to the items given by the subordinates for the organizational citizenship questions (i.e: I help others who have heavy work loads, I assist my manager with his/ her work (when not asked), I take time to listen to co-workers problems and worries, and I go out of my way to help new employees ) in this study were not really describe their actual stand towards the organization. Despite this however, an interesting finding to emerge from utilising this measure of organizational citizenship behaviour which suggest that the behaviours representing organizational citizenship in this study do not relate to emotional intelligence but it may be the case that other factors may well determine the salience in fostering organizational citizenship behaviour. As these behaviours are rather a matter of personal choice because it not directly or explicitly recognised by the formal reward system (Organ, 1988). Elsewhere Clarke & Salleh (in press) posited that the role of national culture and Islamic values had significant impact on how employees managed the uncertainty and emotional turbulent during the merger. Their findings demonstrated that the faithful believe on Islamic principles based upon the Al-Qur an and Hadith helped the employees to manage their negative emotions. In this respect, the results here would seem to suggest that the concept of faith in Muslim may play a significant role on how they exhibit the work behaviours that benefit organizational members as well as organizational outcomes. Cultural factors may also have meant that individuals may not have felt comfortable in expressing their true feelings and attitudes. In a recent study on emotional intelligence by Malaysians academia towards work performance Ngah, Jusoff & Abdul Rahman, 11

(2009), suggested culture explained why they obtained insignificant results between work performance and emotional intelligence. This study is subject to a number of limitations. Firstly, the use of a crosssectional research design limits the inference of causation. Future longitudinal studies are needed to identify the nature and direction of the relationships found here. Longitudinal studies could also offer new insights into how dyadic relationships develop over time. Limitations associated with the EI measure we used should also be acknowledged. The peer report measure of WEIP-3 represents one of the few EI measures available that seeks to capture emotional intelligence at the relationship levels. However to date this measure has only been subject to a relatively limited validation compared to the number of studies that have used other EI measures. There are also constraints arising from our use of a measure of follower performance obtained from their leader. Previous research has shown that the quality of relationship between leader and subordinate can influence leader job performance evaluations such that performance appraisal may be subject to bias (Janssen & Van Yperen, 2004; Liden et al, 1997). Moreover, there might be a problem of common method biases between these two results (LMX and in-role performance) because the both predictor and criterion variables were responded by the same source (Podsakoff et al., 2003). Using more objective measures of follower job performance in future studies obtained from non-leader sources would improve on this current study. Finally, this current study is limited to one service industry in Malaysia. Future studies should attempt to replicate this research in other countries and with different types of industries in order to test whether the findings regarding the moderating effects of EI can be generalised to other settings. Implications and Conclusions This study makes a new contribution to the literature on LMX and emotional intelligence by demonstrating that the relationships between LMX and variable outcomes are moderated by emotional intelligence. The findings of this study therefore support and strengthen the theoretical arguments put forward by George (2000), Jordan, Ashkanasy & Daus, (2008), and Prati et al (2003), amongst others on the association between EI and leadership. Previous studies on LMX conducted in Malaysia indicated that LMX is associated with work outcomes (see Ansari, Kee, & Aafaqi, 2007; Lo, Ramayah & Hui 2006). A more recent study also suggested that the LMX quality, supervisory communication and team-oriented commitment in a Malaysia organisation exist at the group level (Abu Bakar, Mustaffa and Mohamad, 2009). Similar to these studies, our findings support the notion that aspects associated with the quality of leader-follower relationship are associated with important workrelated outcomes specifically within a Malaysian context. Uhl-Bien (2006) noted that future research should explore the various types of emotion involving in the leadership emergence particularly for the relational theory of leadership. Our findings that EI can moderate LMX relationships, would suggest that such research should prove particularly insightful. Finally our findings have some important practical implications for organisations. This study found an important role of dyad EI in enhancing the relationship between LMX and work related outcomes. This would suggest that developing the emotional intelligence of both followers as well as leaders may be particularly beneficial within organisational contexts. This is particularly significant given increasing studies suggesting that emotional intelligence abilities may be susceptible to some development in the workplace (Clarke 2006) through 12

interventions such as training (Clarke, in press b) and team-based learning (Clarke, in press c). addressing several calls for future studies investigating potential moderators of the relationship between LMX and its outcomes, this study demonstrated that dyad emotional intelligence moderated LMX-subordinate work-related outcomes. 13

Table 1: Means, standard deviations, Cronbach s alphas, and inter-correlations among variables (N=203 dyad) Variable M SD 1 2 3 4 5 6 7 8 9 1. LMX 87.52 18.81 (0.85) 2. Dyad EI 121.21 20.47 0.66** (0.91) 3. OCB 23.15 2.92 0.11* 0.10 (0.67) 4. Job satisfaction 22.03 3.38 0.34** 0.32** 0.07 (0.79) 5. Organizational commitment 14.42 3.63 0.44** 0.45** 0.12 0.46** (0.81) 6. Turnover intention 7.95 3.07 0.11 0.13 0.02 0.04 0.06 (0.83) 7. PWB(life satisfaction) 8. PWB(subjective happiness) 23.95 4.89 0.27** 0.26** 0.17* 0.52** 0.43** 0.07 (0.78) 20.20 3.35 0.28** 0.18* 0.07 0.38** 0.38** 0.004 0.54** (0.67) 9. In-role performance 30.31 3.71 0.20** 0.23** -0.05 0.11 0.17* -0.06 0.11 0.11 (0.86) Note:Cronbach s alphas listed on diagonal, in parentheses. *p<0.05 (2-tailed); **p < 0.01 (2-tailed). 14

Table 2: Results of hierarchical regression analysis of moderating effects between LMX and dyad EI (Dependent Variables = OCB, Job Satisfaction, Organizational Commitment and Turnover Intention) Step1 Length of supervision OCB Job Satisfaction Organizational Commitment Turnover Intention β R 2 ΔR 2 F β R 2 ΔR 2 F β R 2 ΔR 2 F β R 2 ΔR 2 F 0.044 0.001 0.038 0.001 0.089 0.006 0.083 0.008 Step2 LMX 0.173* 0.228* 0.258* 0.04 Dyad EI 0.114 0.014 0.013* 0.179* 0.129 0.128* 0.305* 0.244 0.238** 0.082 0.024 0.017 Step3 LMX x Dyad EI 0.199 0.023 0.009 1.19* 0.17* 0.179 0.051* 7.64** 0.125* 0.259 0.015* 17.30** -0.077 0.03 0.006 1.53 *p<0.05; **p<0.01; N= 203 dyad 15

Table 3: Results of hierarchical regression analysis of moderating effects between LMX and dyad EI (Dependent Variables = PWB (satisfaction with life), PWB (subjective happiness) and In-role Performance) Step1 Length of supervision PWB satisfaction with life PWB subjective happiness In-role Performance β R 2 ΔR 2 F β R 2 ΔR 2 F β R 2 ΔR 2 F -0.038 0.003-0.028 0.002 0.119 0.011 Step2 LMX 0.172* 0.287* 0.196* Dyad EI 0.185* 0.087 0.085** 0.017 0.078 0.076** 0.214* 0.07 0.059** Step3 LMX x Dyad EI 0.165* 0.113 0.026** 6.32** 0.138* 0.096 0.018* 5.27** 0.209** 0.111 0.041** 6.19** *p<0.05; **p<0.01; N= 203 dyad 16

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