The Positive Leader: Authentic Leadership, Leader-Member Exchange, and Employees' Psychological Capital

The positive leader 1
The positive leader
Name
Student ID
Institutional Affiliation

The positive leader 2
Introduction
Positive organizational behavior exists in diverse ways and it influences the relationship
between co-workers and leaders. Positive organizational behavior is application or study of
psychological capacity and positively oriented human resource strengths that can be managed or
developed for improving performances. Leadership is a strategy used by a person for influencing
others in order to achieve a target. Leaders who utilize their knowledge and leadership skills
facilitate the leadership process. Furthermore, leaders should practice authentic leadership in
order to influence the positive psychological capital of employees. Through the authentic
leadership practice, the trust is experienced in the organization with subordinates trusting their
leaders for their production. The authentic leaders are not born but made if a person has a desire
of becoming an effective leader. In addition, a leader with positive psychological capital
develops in a non-ending and slow process involving education, self-study, education and
training. In order to maintain leader-member exchange (LMX), authentic leaders must be
creative, obedient, trustworthy, innovative and have effective communication. These features are
essential in the development of (LMX), authentic leaders and employees’ Psychological Capital
(PsyCap). Therefore, the paper seeks to determine the relationship that exists between authentic
leadership, leader-member exchange and employees psychological capital, critically review
literature explaining “PysCap” of some different types of employees and why emotions
significantly influence employees performances.

The positive leader 3
What is the relationship between authentic leadership, Leader-Member Exchange (LMX)
and employees’ Psychological Capital (PsyCap)?
According to Shamir and Eilam-Shamir (2018 p.51), authentic leadership is an approach
to leadership that focuses on the creation of a leader’s legitimacy through a truthful relationship.
Furthermore, authentic leaders are positive and dedicated people with their leadership being
based on self-concept: clarity, self-concept: her or his knowledge, person role merger, self-
concordance and the degree that self-concept of leadership is expressed in her or his behavior.
According to Hooper and Martin (2008 p.20) Leader-Member Exchange (LMX) is an approach
to leadership that emphasis on the relationship that exists between followers and leaders.
Furthermore, the theory suggests that leaders are developed in an exchange with each of their
subordinates and therefore Leader-member exchange quality influences the subordinates
decisions, responsibilities and access to resource and performances. Employees’ Psychological
Capital (PsyCap) is a concept developed in an organization with four pillars of optimism, hope,
resilience and Efficacy and has been associated with life and job satisfaction.
A research conducted by Coxen, van der Vaart and Stander (2016 p.1-13) indicates that
there is a significant positive relationship that exists between authentic leadership, leader-
member Exchange (LMX) and Employees’ Psychological Capital (PsyCap). From the research
finding, it is clear there is the relevance of authentic leadership to (LMX) and (PsyCap) and
utility of effects on both performance and trust.
Authentic relationship increases Employees’ Psychological Capital (PsyCap). Authentic
leaders create Employees’ Psychological Capital (PsyCap) as a key developmental change
among their followers (Luthans, Norman, Avolio and Avey, 2008 p.119). Therefore, the change

The positive leader 4
is considered to be brought by the effect of authentic leaders on organizational work climate. In
addition, the outcome of authentic leadership has received greater empirical attention with the
influence of authentic leader’s behaviors being controlled by other factors like an aspect of the
work environment and subordinate characteristics. Furthermore, authentic leader’s enables an
individual psychological state to have confidence, be prepared to face challenges by putting more
efforts and working toward a goal.
Both Authentic leadership and Employees’ Psychological Capital (PsyCap) are also
positively related to leader-member Exchange (LMX). A research conducted by Luthans,
Norman, Avolio and Avey (2008) further showed that Employees’ Psychological Capital
(PsyCap) mediate the relationship that exists between leader-member Exchange (LMX),
employee performance and authentic leadership. The leader-member Exchange (LMX)
relationship makes the employee be effectively committed to the organization as their needs are
addressed appropriately and they have confidence in their authentic leaders. Furthermore, as a
result of Employees’ Psychological Capital (PsyCap), authentic leaders have the desired impact
on the employee’s actual performance. In addition, leader-member Exchange (LMX) and
authentic leadership result in satisfactory and task interdependence positively influencing the
level of commitment to the team.
Higher authentic leaders engage in positive appraisals of their situation with LMX
relationship. The positive appraisals promote authentic leadership and strengthen the relationship
with followers. Furthermore, the relationship is strengthen because positive leaders are likely to
have increased trust and confidence with follower’s ability of conducting their duties and
responsibilities in a timely manner The effect of psychological Capital (PsyCap) on employee