The impact of LMX differentiation on perceptions of team conflict and procedural justice climate

The fundamental tenet of Leader Member Exchange (LMX) theory is that leaders develop different quality relationships with each of their employees; however, to our knowledge, no study has investigated the impact of LMX differentiation on teams. Drawing upon the justice literature, we suggest that fostering different quality LMX relationships runs counter to principles of equality' and consistency, which are important for maintaining social harmony in groups, and perceptions of procedural fairness. We therefore propose that differential treatment of employees by the leader (as indicated by within-team variability in LMX relationships) will have a negative effect on team reladons, and percepdons of procedural jusdce climate. Two samples of employed individuals are used to invesdgate the hypothesized reladonships. Sample A consists of 74 individuals from a variety of occupadonal and organisadonal backgrounds, and Sample B consists of 152 individuals from an Australian organisadon dealing in the sale and service of heavy machiner)'. In both samples, high LMX variability within teams is associated with higher reports of team reladonal conflict, and lower reports of procedural jusdce climate. The results suggest that leaders may need to be caudous about fostering special relationships with only a select subset of employees.