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Authentic Leadership Essay: Leader Member Exchange Theory & Employee Psychological Capital


Task: The following assessment aims to examine how well you understand the relationship between authentic leadership, effective Leader-Member Exchange and management support and the psychological capital of employees of different employee groups. It continues the development of Cultural Competence Learning Outcome and Graduate Attribute by facilitating students’ increased knowledge and awareness about how authentic leadership, effective Leader-Member Exchange (LMX) and management support interact on employees outcomes.

Pick a topic below and write a well-referenced literature review in response. You are expected to use the academic literature to support a well-constructed argument. This assignment must be submitted through the Turnitin link for this assignment.

1. What is the relationship between authentic leadership, Leader-Member Exchange (LMX) and employees’ Psychological Capital (PsyCap)? Critically review the literature that explains how to build the Psychological Capital of different types of employees (such as professionals versus administrative employees, emotional labour, blue collar versus white collar employees, different generational cohort, and/or different ethnicities)? Why do emotions (of for example leaders, managers, employees) significantly impact employees’ performance? or

2. Analyse the leadership and/or employee performance (such as their engagement, turnover, commitment, wellbeing) at your workplace and compare it with the positive leadership and Psychological Capital literature. How similar or different is your workplace from what is potentially possible as per recent research studies? Please consider different types of employees (such as professionals versus administrative employees, emotional labour, blue collar versus white collar employees, different generational cohorts, and/or different ethnicities). Use the positive leadership and/or Psychological Capital literature to suggest how to move your workplace towards being more effective?


Leadership is referred to the action or ability to lead a group or people. In an organization, leaders are responsible for empowering the fellow employees towards their desired performance, while shaping the organizational behavior. Leaders are responsible for having some crucial traits and capabilities, which are important for their behavioral excellence and for shaping the behavior of employees. This authentic leadership essay is referred to a pattern of leadership behavior, which is drawing upon and promoting both positive and “psychological capacities” as well as positive ethical climate for fostering increased self awareness and positive self development of fellows. “Authentic leadership essay plays a crucial role in developing psychological capacity of employees, indicating a significant leader-member exchange. Psychological capacity is referred to “higher order positive state” of an individual, comprising of four aspects, “self-efficacy, hope, resiliency, and optimism” (Chaurasia and Shukla, 2014). It is crucial for the leaders to emphasize upon two-way relationship with employees, for developing psychological capacity, which would further improve performance of employees. Considering this, in the following sections of this authentic leadership essay, a thorough review of literature is conducted, for understanding the relationship between “authentic leadership, Leader-Member Exchange (LMX) and employees’ Psychological Capital (PsyCap)”.

Authentic Leadership Essay

Concept of authentic leadership, leader-member exchange and Psychological capital (PsyCp) of employees
According to Walumbwa et al., (2008), the “authentic leadership” is referred to a leadership behaviour, which is emphasizing upon influencing positive psychological capabilities and promotion of positive ethical climate in the organization. The key purpose is to influence “increased self awareness, an internalized moral perspective, balanced processing of information and relational transparency” in the leaders, working with the fellow employees, thereby promoting the “positive self development” of the employees. The authentic leaders have some key characteristic traits, which distinguish them from others. For instance, the authentic leaders are “self-aware and genuine, they are vision, reliable, persuasive, trustworthy”. They inspire other to follow shared direction, listen to others prior decision making, for ensuring ethical decision making”.

“Psychological capital” is “higher order positive state”, which is comprised of four sub facet, including “self efficacy, hope, resilience and optimism”. PsyCap has positive correlation with the desired employee behaviour, attitude and performance. Here, Sony and Mekoth (2016) discussed “self efficacy” as the confidence of an individual regarding the capability for using “cognitive resource, motivation and action for effectively completing different tasks” in employment. On the other hand, “hope” is referred to “a positive motivational status, which is influenced by interactively influenced sense towards “goal directed energy and the plan to meet the goals”. On the other hand, “resilience” is referred to the capability to return or cope with the failure contexts. Finally, “optimism” has been highlighted as a attitude based trait of an individual, attributable for the positive aspects as “personal and pervasive” and seeking negative events as “external and situation specific”.

“Leader-member exchange theory (LXM)” is a relationship-based approach related to leadership, which is emphasizing upon “two-way relationship” within “leaders and followers”. Day and Miscenko (2015) claimed that LXM theory influences leaders to establish exchange with subordinates, which would empower decisions, responsibilities, resource accessibility and performance of fellow employees.

Relationship between authentic leadership, leader-member exchange and employee’s psychological capital
Several studies have identified significant positive link among “authentic leadership, leader-member exchange and employee’s psychological capital”. For instance, Joo et al., (2015) highlighted in his study that both “psychological capital” development among the employees and authentic leadership traits of the leaders, who are influencing psychological capital of the employees, are influencing significant work empowerment and performance excellence of their fellow employees. It has been argued by the author that PsyCap is a comparatively “new construct in POB”, which is referred to “positive psychological state” for “individual development”. The author claimed that when employees are having” higher PsyCap” and perceived a high level of “authentic leadership”, they felt more empowered in their work. However, the findings related to model developed by the authors have also shown that when employees had “high PsyCap level”, the role of “authentic leadership” has comparatively low on work empowerment. It is indicating that PsyCap is itself creating a positive behavioural environment for the employees (Kumar and Shah, 2015). In such context, employees are having high efficacy, hope and optimism, which are influencing their work empowerment and engagement, in absence or little influence from the authentic leaders.

Further, Chaurasia and Shukla (2014) explored the link within psychological capital and the quality of “employee-employer relationship” through the help of “Leader-Member exchange theory” and employee engagement. The findings revealed that high psychological capital and high quality relationship with the leaders is positively influencing “employee engagement” and performance in the organization. It has been claimed in several existing literatures that engaged employees perform well in their work roles. The findings from this article indicated that building psychological capital and positive or two-way relationship within employee and leader are contributing in high engagement and thereby promoting performance excellence of the employees.

In this context, Day and Miscenko (2014) claimed that different types of leadership, including authentic leaders or transformational leadership are enhancing self-efficacy and cohesiveness of the employees, which is promoting their performance level. In addition, the empirical evidence in literatures highlighted that the personality traits of the authentic leaders, i.e. including trustworthy, ethical and motivating, are actually influencing the “psychological capital” through “positive work environment. In addition, the inspiring nature of the authentic leaders is facilitating the fellow employees towards strengthening their psychological capital and surpasses their self interest. It has been argued by the authors that the “authentic leaders” are helping employees for developing self efficacy via the opportunities, in order to explore “success, modelling or learning, social influence and positive feedback, psychological and physiological arousal”; all of which are contributing in their well performance in organization.

Day and Miscenko (2014) claimed that the authentic leaders, considering the LMX theory perspective, are also enhancing “hope” for the employees, through “participative goal setting”, “offering adequate resources, training”, “stretch goals”, “engaging employees in decision making”, “stepping”, “transparent reward system”, and “offering better strategic alignment”. In addition, these leaders can promote “resilience and optimism” of employees for enhancing the PsyCap, through offering clemency in assessment of previous performance outcomes, appreciating them for present performance as well as identifying opportunities for their future growth and development. Therefore, from the analysis or the arguments in the existing authentic leadership essay and literatures, it can be said that the LXM concept or theory is influencing the authentic leaders to emphasize upon two-way leader-follower relationship building (Tosten and Toprak, 2017). They are doing this through empowering the four facets of PsyCap of employees, with the essence of their unique characteristic traits, which differentiate them from other types of leaders. Therefore, in these way three factors, i.e. employees’ PsyCap, LXM theory and concept as well as authentic leadership essay traits are contributing towards the higher employee engagement and the higher employee performance in different organizational context.

Ways to build psychological capital of different types of employees
“Psychological capital” is a positive mindset of employees, which includes four components, i.e. “hope, self efficacy, resilience and optimism”. These components are influencing employee engagement highly. For instance, the administrative employees are playing crucial role in producing quality and relevant graduates and thus, their level of satisfaction is significantly impacting upon their efficiency. Tamer (2015) has highlighted that psychological capital of the administrative staffs could be developed through four key components, including “meaning, competence, self-determination and impact”. It has been argued that all these aspects are additively creating the overall notion of “psychological empowerment” and contributing in PsyCap, which results in the effectiveness of the administrative and managerial staffs. Further, Wickramasinghe et al., (2018) claimed that there are three views of implication of “PsyCap”, including “Quality point of view”, “State class” and “Comprehensive”. It has been revealed from the regression analysis that PsyCap is reducing the turnover intentions among these staffs, by enhancing job satisfaction.

On the other hand, while considering the professionals, Tosten and Toprak (2016) has shown that the teachers, with high positive PsyCap are often displaying emotional labour behaviour. Further, the authors also found that the PsyCap competencies teachers are having a significant impact on their intention for displaying emotional labour behaviours. Tamer (2015) has defined emotional labor as the one, who has control over self emotion at workplace, while having high level of interaction with others in organization or other context, for creating a gesture, which is acceptable to others”. Therefore, it has been revealed from the findings that training and development of the employees to develop emotional intelligence, which would make them an emotional labour, is actually influencing positive psychological capital in the organizational environment. On the other hand, it has also argued by other literatures that the “positive PsyCap” is diminishing negative effects of emotional labours in organizational contexts, which could be influenced through relationship building training of employees and two-way commutation.

Now, it is noteworthy that “psychological capital” can be developed in different ways for “white and blue collar employees”. Wickramasinghe et al., (2018) revealed that for the corporate white collar employees, psychological capital could be developed through providing them the opportunities, where they could prove themselves, the challenging tasks or the scope of creativity and innovation in the organization, which would enhance their self-efficacy. On the other hand, when authentic and ethical leaders in the organization are directing their path towards desired goals, the develop hope and trustworthiness towards the organization. When they would get opportunities to represent themselves in the organization beyond to attain success, resilience would be developed. However, in case of the blue collar staffs, appreciating their contribution and hard work enhance their hope and self efficacy. Therefore, the leaders should be more polite, show emotional intelligence and able to deal with employees’ conflicts. These components would help the employees to develop resilience and trust over the leader and the organization.

The impact of emotion upon employees’ performance
There is a long held expectation, which indicates that people should keep their emotion out of the workplace. “Emotions” are wholesome “human psychological experience”. It is argued by Pervez (2010) an employee is highly affected by the behaviour they face in the organization. The emotions and personality of the employee determines “job performance, decision making skills, team spirit, and leadership and turnover”. This is indicating the importance of emotion for employee and organization. If an employee feels happy and satisfied, they will express their emotion in such a way that it would influence the positive dynamic in the organizational environment. It has been claimed by the author that emotions are directly influencing decision making, interpersonal interactions and creativity of the employees. The study by Joo et al., (2016) found that emotions of employees in workplace are being addressed as significant determinant for employees’ wellbeing and job satisfaction. Anger and anxious emotional outcomes of the employees have been noticed to lead towards dissatisfaction towards “colleagues”, while sadness leads to “dissatisfaction with the job”. Further, the author has also claimed that emotion, such as anger or showing interests or trust is neither instant reaction, nor this is the long term reaction like mood. Instead, emotion is has been argued as a concise episode of harmonized changes in mind as well as bodily reactions of an employee, which is affecting the employees’ performance.

In the above authentic leadership essay, the key emphasis was reviewing the literatures on the “psychological capital, authentic leadership and the Leader member exchange theory”, for gaining understanding how these notions are contributing in influencing the employee engagement and employee performance. In this regards, it can be concluded from the literature review that positive psychological capital is influencing employee performance and organizational behaviour significantly. In this context, authentic leadership essay is helping the leaders to develop “PsyCap” among the employees, based on the principles and ideas of “leader member exchange theory”. Authentic Leadership Essay are being prepared by our management assignment help experts from top universities which let us to provide you a reliable assignment help online service.

Reference List
Chaurasia, S. and Shukla, A., 2014. Psychological capital, LMX, employee engagement & work role performance. The Indian Journal of Industrial Relations, pp.342-356. URL:

Day, D. and Miscenko, D., 2015. Leader-member exchange (LMX): Construct evolution, contributions, and future prospects for advancing leadership theory. The Oxford handbook of leader-member exchange, pp.9-28. URL:

Joo, B.K., Lim, D.H. and Kim, S., 2016. Enhancing work engagement: The roles of psychological capital, authentic leadership, and work empowerment. Leadership & Organization Development Journal, 37(8), pp.1117-1134. URL:

Kumar, M.M. and Shah, S.A., 2015. Validation of the psychological capital construct on the white collar employees of the human service organizations. Indian Journal of Positive Psychology, 6(4), p.344. URL:

Pervez, M.A., 2010. Impact of emotions on employee’s job performance: An evidence from organizations of Pakistan. OIDA International Journal of Sustainable Development, 1(5), pp.11-16. URL:

Sony, M. and Mekoth, N., 2016. The relationship between emotional intelligence, frontline employee adaptability, job satisfaction and job performance. Journal of Retailing and Consumer Services, 30, pp.20-32. URL:

Tamer, I., 2015. The effect of positive psychological capital on emotional labor. International Journal of Research in Business and Social Science (2147-4478), 4(2), pp.20-34. URL:

Tosten, R. and Toprak, M., 2017. Positive psychological capital and emotional labor: A study in educational organizations. Cogent Education, 4(1), p.1301012. URL:

Walumbwa, F.O., Avolio, B.J., Gardner, W.L., Wernsing, T.S. and Peterson, S.J., 2008. Authentic leadership: Development and validation of a theory-based measure. Journal of management, 34(1), pp.89-126. URL:


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Authentic Leadership Essay

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