Relationship between Authentic leadership, Leader Member Exchange and Employee’s Psychological Capital

This essay discusses the relationship between Authentic leadership, Leader Member Exchange and Employee’s Psychological Capital. It explains how to build the Psychological Capital of different types of employees and why emotions significantly impact employees’ performance.

Running head: ASSESSMENT 2: ESSAY
ASSESSMENT 2: ESSAY

ASSESSMENT 2: ESSAY 2
Table of contents
Introduction................................................................................................................................3
Authentic leadership...............................................................................................................3
Leader Member Exchange......................................................................................................4
Employee’s Psychological Capital.........................................................................................5
Relationship between Authentic leadership, Leader Member Exchange and Employee’s
Psychological Capital.............................................................................................................6
Explaining how to build the Psychological Capital of different types of employees.............7
Explaining on why do emotions significantly impact employees’ performance....................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

ASSESSMENT 2: ESSAY 3
Introduction
Leadership is a conventional process it is a day to day of leading a group of people having a
common objective. Leading is not restricted to mere management but has a larger extent to
which it operates. Leadership styles and approach may differ from situation to situation.
Leading is process of deriving the best of the capabilities that a employee has to operate
towards a common organizational goal. Leaders within a company motivate the workforce to
work towards a common objective. In this project or assignment there will be discussion over
leadership and different dimension of leadership that is there in a business organization. The
different leadership types will be discussed and relationship between various types of
leadership will be discussed. The impact of effective leadership on employees and workforce
of a company will be discussed.
Authentic leadership
Authentic leadership is a leadership approach that mainly target on building and effective
relationship with the workforce through maintaining honest and trustworthy relationship with
the employees within the organization. Under this leadership approach trust and honesty is
the key element that helps an organization to build up an effective workforce and leader. In
general it can be said that authentic leadership is a leadership process in which leader are
positive personalities and promote the sense of the having trust on there employee which in
turn promotes the emotion of working hard for building trust within the workforce
environment (Forner et al. 2015). It can also be said that according to this leadership style
there are various leadership style there are various ethics that are to be followed in order to be
an authentic leader. One should be of honest and open mind background if there is authentic
leadership approach in mind. The qualities that are seen in authentic leaders are as follows:
Self-awareness: The leader has the quality of self-awareness that is that the leader has his
own strength, experience and intellect to be successful leader. This means that the leader has
skills to become a self dependent leader to make authentic relationship with the employees.
Relational transparency: the leader under this leadership approach is known to be very
transparent to his follower that is that the leader openly shares his thoughts, beliefs and view
with the workforce, does not retain his vision, and makes honest remarks in form of his
visions (Alok, 2017).

ASSESSMENT 2: ESSAY 4
Balanced: The leader under this leadership approach are said to be unbiased, balanced and
free of any unfair views. This means that the leader does not opposing views of any other
person and considers every view with a fair mind.
Morality; the moral backgrounds of leader following the authentic leadership approach are
high on morality which mean the stay honest to the workforce or there followers and never
misguide the following which helps them in building strong relationship with their employees
or followers.
The authenticity and ethics of work that is followed under this aspect of leadership is
immense. The ethical consideration followed by the leader is high. The leader and his
follower or workforce share a relationship of honesty that means everyone in the group is
honest to the leader and the leader to is honest to his workforce. It can be noted that authentic
leadership is based upon the ideology of having a ethical as well as authentic leader. It can be
said that the qualities that are indicated above can be seen in the patterns of behavior that the
leader has (Boniwell & Smith, 2018). Thus it can be said that the leader is insufficient to be
authentic leader if he or she is insufficient perform his duties as the same.
Leader Member Exchange
Leader Member Exchange theory of a basic theory of leadership which defines the the
relationship based leadership approach. It is seen that through efficient use of this theoretical
concept distinguish about the ways in which the leaders approach their subordinates. Leader
member exchange is a process under which people with high and effective performance are
developed into leaders. This theoretical process may help a company to develop efficient
leader through effective performance (Zbierowski, 2016). This is to be stated that this
following theory is used by many organization for the purpose of increasing there operational
effectiveness by employing facility employing this theory the company increase the there
productivity and aim of reaching a goal in rapid pace by recruiting leaders which are
efficient. It can be said that using this process the company is able to employee efficient
leader which have proper knowledge relating to the operational activities which is conduct by
the company. It can also be said that through his use of this theory the company chalks out
the potential leader that will help the company in growing effective workforce helping the
organization to increase their operational efficiency (Ong, 2014). It can be said that there are
chances that the company will have customers which are operationally very active and who
will increase the operational activities of the company. This theoretical concept also feature

ASSESSMENT 2: ESSAY 5
the qualities which one should acquire prior of becoming a leader. The qualities are as
follows:
1. Open Mindness: It can be said that the leader should have high open mind which
increase its transparency helping the following to be transparent and increase their
knowledge sharing ability.
2. Motivational: The leader has to be motivational in order to be efficient leader. This
will increase the ability of the following to excel at operational activities of the firm.
3. Efficient employee: It can be said that the leader should be an efficient employee and
should know about the operational activities of the company. This will enable the
leader to have efficient knowledge about the work process that is opted by the
employees in the company (Shirey, 2017).
Employee’s Psychological Capital
In this section a detailed discussion regarding the employee’s psychological capital is to be
done thus in order to get the accurate knowledge regarding the capital of the employee’s
theoretical approaches it is important to state the psychological capital. In order to gain the
exact information and understandings of the employee’s psychological capital iit is important
for a researcher to provide a detailed discussion regarding what is the capital that is to be
discussed.
Employees psychological capital is generally considered as the theoretical approaches of the
employees towards the organization and its activities along with their overall performances
during the period (Baron, Franklin & Hmieleski, 2016). The mood and environmental effects
of the employees are also included in the psychological capital factor. In this context it can be
added that the employees psychological capital denotes that factors and aspects that are
related with the capital foundation within the employees regarding self motivation and mental
efforts in order to achieve or perform in a different manner to gather success. It is also to be
added that the employee’s psychological capital is positively and significantly related to
employee’s overall performances and efforts towards the organization (Wijewardena,
Samaratunge & Härtel, 2014).
In an organization it is important to maintain the employee’s psychological capital in order to
gain better and effective results from the employees performances. In this context it can be
added that the employee’s psychological capital is an essential theoretical factors that
motivates and drives the employees of the organization to perform and enhance their abilities,
skills and experiences in the international market and to gain considerable amount of returns

ASSESSMENT 2: ESSAY 6
from such activities and operations. This is only achievable if the organizations are willing to
support the mental and theoretical development of the employees over the years and to
provide them with the essential environment that is required for them to develop their mental
and personal skills over the years (Paek et al. 2015). Thus by providing the requirements that
firm assures to the employees of the organization are well skilled and mentally matured in
order to handle and maintain any kind of activities and operations along with difficult and
fluctuating marketing situations.
Relationship between Authentic leadership, Leader Member Exchange and Employee’s
Psychological Capital
In order to discuss the relationship between the employee’s psychological capitals, authentic
leadership and leader member exchange it is very important to gain information and accurate
knowledge of the terms in respect of the study. In this context it is to be added that the
knowledge of the terms and information would benefit the research in order to establish a
better and suitable relations between the terms and to create efficient link between them.
The leader member exchange theory is considered as relationship based theory in which the
leaders have established a two way based relation (Gu, Tang & Jiang, 2015). In this theory
the leader motivate and innovates and exchange their thoughts and ideas with their team
members and subordinates in order to gain better results and outcomes. In this context, it can
be added that the LMX theory also denotes the facts that leaders have provided the options
regarding their ideas and development strategies to the members where they can accept it or
not. Thus by providing such flexibility in the theoretical approach the overall organization
performances are renganced over the periods (Petrucka et al. 2016).
Employees psychological capital is generally considered as the theoretical approaches of the
employees towards the organization and its activities along with their overall performances
during the period. The mood and environmental effects of the employees are also included in
the psychological capital factor. The LMX theory also plays a vital role in developing the
employee’s psychological capital as the employees are provided with flexibility and
opportunities to develop their skills and mental maturity in order to provide better outputs and
express more of their thoughtful ideas. In this context it should be added that the employees
are the ones who are practically performing the organizational operations thus they can out
think solutions of several situations that are required to be solved. In this context it can be
added that the employees psychological capital denotes that factors and aspects that are
related with the capital foundation within the employees regarding self motivation and mental

ASSESSMENT 2: ESSAY 7
efforts in order to achieve or perform in a different manner to gather success (Megeirhi et al.
2018).
In respect of the above study, it is observed that authentic leadership includes both the LMX
theory and employee’s psychological capital as the theory mainly focuses on developing
sustained and steady relationship between the leaders and members over the years. Thus, it
can be added that the theories that are discussed in the study are interlinked and mainly
concentrates the development of the employee's personal and mental skills along with
establishing stable and suitable relationship between the leaders and team members over the
years where they can achieve better and smoother results in the organizational aspect.
Explaining how to build the Psychological Capital of different types of employees
In order to establish suitable capital of the employees it is important to identify and
understand the types of the employees that are to be motivated. Most of the common factors
are generally used in the segments in order to establish the relations and maturity.
As for the corporate sectors the employees are generally motivated with basic targets and
returns at the primary level. As they matures and gather experiences over the time they are
provided with higher and better paid targets that would generally put several profits in their
account and thus they are motivated and make efforts for the achievement of such target
achievement over the years (Goldsmith, Darity Jr & Veum, 2018). In this context it can also
be said that he employees are also provided with several facilities and flexibilities that hey
tale as positive way and thinks of their organizational welfares. Thus the development
process and target making process in the industries are provided over the years through the
application of the theory (Zbierowski & Góra, 2014).
Explaining on why do emotions significantly impact employees’ performance
Emotions are personal elements which an individual has and which derives there good or bad
activities. Every individual in an workforce has there own emotion which derive their
operations at workplace. Emotion such as happiness, frustration, and motivation are the key
elements that determine the performance of the employee at workplace. It can be said that
emotions of one individual affects his or her operational or physical activities. It can be said
that emotions determine the approach of different individual. In general terms it determines
the mood in which the employee works in the company. Emotions are developed through
series of events that occur in person life. Emotion steps on how an individual thinks about
something. For example if one person thinks that certain things are bad or unethical other
person can think that it is good perform. Thus, it can be said that the thinking process of an

ASSESSMENT 2: ESSAY 8
individual is determined through the emotions that it has. Hence, saying that emotion of an
individual affect the operational activities of the same. The performance of an individual may
also decides the emotion that the following has while conducting the operations.
Emotions are stigma that derive the ways in which the person performs at workplace. It can
be said that if the individual has bad emotion he or she will be unable to deliver the work in
an efficient manner. However if a person has emotion which are highly motivated the person
will automatically deliver work in an efficient manner. Motivation is what derives the the
employees to perform at workplace. It can be said that there various aspects of emotions
which can affect an individual’s operation as well as performance at workplace (Whittington,
2017).
Management of emotions are very important to ensure that the person can perform well
consistently. It is both the responsibility of the manager or leader as well as the employee to
make sure that the emotions do not affect workplace activities. Hence keeping oneself
motivate at workplace will always help the individual to perform well at workplace.
Managing emotion at workplace will also help the individual to stay away from personal
problems at workplace that will increase the focus of the same on the operating activities of
the organization.
Hence it can be said that emotion of an employee can have b impact in both and good and in
bad way. It is important that the emotions of the individual are maintained. It can also be said
that through efficient use of emotion management skills the employees can efficiently
manage their emotions at workplace which will ultimately ensure that the employee
performance at his best.
Conclusion
Concluding in the light of above context it can be said that leadership is a process through
which a company is able to develop their workforce which increase there operational
activities of the organization. It can be said that leaders have an huge influence on their
subordinates and workforce. Hence it is important that leaders derive the best out of their
employees which is why the leader should motivate their followers and workforce. The leader
should build an efficient relationship with their employees that will ensure that there is an
effective relationship between both the leader and the workforce of the company.

ASSESSMENT 2: ESSAY 9
References
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ASSESSMENT 2: ESSAY 10
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