Authentic Leadership, Leader-Member Exchange, PsyCap, and Employees

This essay provides a comprehensive literature review exploring the intricate relationships between authentic leadership, leader-member exchange (LMX), and employees' psychological capital (PsyCap). The review delves into how authentic leadership, characterized by honesty and ethical behavior, fosters positive employee outcomes by examining the leader-follower dynamic and the development of intrinsic qualities in leaders. The essay further investigates strategies for building psychological capital across various employee groups, including professionals, administrative staff, blue-collar and white-collar workers, different generational cohorts, and individuals from diverse ethnicities. It analyzes the influence of emotions on employee performance, highlighting the role of emotional intelligence and emotional regulation in leadership effectiveness. The essay synthesizes existing research to offer insights into creating supportive work environments that enhance employee engagement, well-being, and overall organizational success.

Running head: AUTHENTIC LEADERSHIP AND PSYCHOLOGICAL CAPITAL
Authentic Leadership and Psychological Capital
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1AUTHENTIC LEADERSHIP AND PSYCHOLOGICAL CAPITAL
Introduction
Authentic leadership refers to approach in relation to leadership that emphasizes on
building the legitimacy of the leader. It can be done with the help of maintaining of honest
relationship with the followers by building on the aspect of ethical foundation. The authentic
leaders act as positive people who helps in promoting the aspect of openness in an
organization. Leader member exchange is indicative of relationship based approach that
focusses on the aspect of two-way relationship that exists between the leaders and that of the
followers (Shamir and Eilam-Shamir 2018). Psychological capital refers to the development
state which is characterized by the elements of self-efficacy, hope along with resiliency. This
literature review discusses about the relationship that exists in between authentic leadership,
psychological capital and that of leader member exchange. This literature review also
elaborates on how to build up the psychological capital of different kinds of employees like
professionals and the administrative employees. It also discusses regarding the building of
psychological capital of blue colour and the white collar employees. It also talks about how to
build psychological capital of different generational cohort along with the people belonging
to various ethnicities. It also talks about the significance of emotions on the performance of
the employees in an organization.
Relationship in between authentic leadership, leader member exchange and the
psychological capital of employees
Authentic leadership focuses on the aspect of moral quasi-traits that is originated from
the value standards of a person. Authentic leadership equips the leaders with a kind of
thinking pertaining to their own behaviour. According to Leroy et al. (20150, authentic
leadership lays stress on the intrinsic qualities that a leader has which is more salient as
compared to exhibited behaviour of leader. The concept of authentic leadership extends

2AUTHENTIC LEADERSHIP AND PSYCHOLOGICAL CAPITAL
beyond that of authenticity of leader that helps in encompassing authentic relation with the
followers. It has been argued by Wang et al. (2014) that positive psychological capacities that
an authentic leader has helps in fostering positive behaviour in the employees of an
organization. Authentic leadership paves the path for exchange taking place in between
leader and the follower and it helps in the self-development of the employees of an
organization. Authentic leadership paves the path for that of leader-member exchange as it
looks beyond behaviour of a leader and lays more stress on the aspect of the followers of the
leader that helps in facilitating the aspect of leader-member exchange in an organization.
According to Laschinger and Fida (2014), authentic leadership springs from the self-
determination theory that lays emphasis on idea that human nature will show persistent
positive feature by exhibiting effort along with agency. Authentic leaders shows consistency
in relation to values and the beliefs which has positive consequence on the psychological
well-being of the employees of an organisation. The authentic leader displaying good values
can make the employees psychologically happy that would be reflected on their jobs. The
leader-member exchange taking place can help in building psychological capital of
employees that can lead to growth of the organization.
Building the psychological capital of employees
Building psychological capital of professionals and the administrative employees
The psychological capital of the professionals can be built in an organisation by
nurturing the element of trust within an organisation. The leader can build the psychological
capital of the professionals by the help of the aspect of relational transparency along with the
ethical perspective. It has been stated by Sendjaya et al. (2016) that the authentic leader
engaging in the process of balanced processing can instill positive behaviour in the
professionals that can augment performance of the employees in an organization. The leader

3AUTHENTIC LEADERSHIP AND PSYCHOLOGICAL CAPITAL
should be able to prove authenticity by taking recourse to the actions that can help in
developing the capacity of the professions working within the framework of an organization.
The psychological capital of the professions can be built with the help of the aspect of
dominant trust that can help in fostering positive performance of employees. The public
organisations need servants who would be dedicated towards their work. According to Hirst
et al. (2016) that the positive leader should focus on building the strength of the
administrative employees that can help in bringing about positive outcome for the employees
working in an organisation. The authentic leader should instill dimension of hope that can
help the employees in relation to their engagement in the organisation. The authentic leader
should provide hope to the administrative employees that can act as a positive factor that can
help the employees in reaching their organisational goal.
Building of emotional labour in employees
It has been found with the help of research that in the event of the service provider
being able to identify with the work role emotional labour can result into increasing well-
being of the employees in an organisation. Emotion Regulation Theory has stated that
emotional labour can give rise to burnout along with job dissatisfaction of the employees in
an organisation. Suppressing the emotions at the time of social interaction can result into
overworking of the nervous systems of the employees in an organization (Conway 2015). The
authentic leader should show the element of emotion regulation that can help them in
controlling the behaviour of the employees of an organization. It has been found with the help
of research that level of the job demand can have an impact on the stress that are experienced
by the employees of an organization. The authentic leader should have control over the aspect
of emotional displays that can help in facilitating exchange taking place in between the leader
and the employees of an organization.

4AUTHENTIC LEADERSHIP AND PSYCHOLOGICAL CAPITAL
Psychological Capital of Blue Collar and the White Collar Employees
White colour refers to a person who carries out professional along with managerial
work. The jobs related to white collar can be carried out either in an office or within the
administrative setting. It has been argued by Martin et al. (2016) that the people having need
of the power can teach and provide encouragement to the others that can help in achieving
their objective. The authentic leader should take care of the fact that the knowledge workers
are assigned the tasks that can help them in experiencing a feeling of achievement. The Needs
Theory of David McClelland states that the knowledge workers should be motivated by need
of achievement that can contribute in increasing the psychological capital of the white collar
employees working within an organisation. The management of a knowledge organization
should focus on the aspect of continuous innovation that can help in increasing the efficiency
of the employees working within an organisation.
Blue collar worker on the other hand refers to the working class people who are
instrumental in performing manual labour. Blue collar work involves the works related to
manufacturing, commercial fishing, food processing along with recycling. The two factor
theory of Frederick Herzberg focuses on the aspect of motivation along with the hygiene
factors. This theory focusses on the importance of working conditions that can help in
satisfying the employees working in the sector of blue collar. According to Wang et al.
(2015), authentic leader should be able to create the ideal conditions that can help in building
on the aspect of psychological capital of the blue collar employees working in an
organization. Hygiene factors concentrates on fulfilment of the human needs that can increase
the efficiency of work of the employees.
Psychological capital of various generational cohort
Generational cohort refers to group of the individuals who have to undergo identical
political along with cultural events. They share the same kind of values and they have the

5AUTHENTIC LEADERSHIP AND PSYCHOLOGICAL CAPITAL
same kind of attitude in relation to life and work. The people in the different cohorts can
acquire the same kind of personalities owing to the factor of shared experiences. According
to Cropanzano, Dasborough and Weiss (2017), demographic changes taking place within the
workplace can cause the business to address the issue of employee diversity. Authentic leader
should be able to harness skills of the old workers that can indirectly help in developing skills
of the younger employees working in an organisation. It has been argued by Breevaart et al.
(2015) that the leader should be able to create a flexible workplace that can help in managing
talent among the various generations in an organisation. The leaders should be competent in
the various mechanics at work that can increase the psychological capital of the employees
working in an organization. According to Herman and Dasborough (2016), high employee
turnover can occur in the event of the management of an organisation not being able to
address the unique needs of the different generation of workers. Training along with
development opportunities should be provided to the employees of various generations by the
leadership of an organization that can increase the psychological capital of the employees of
an organization.
Building Psychological Capital of employees of different ethnicities
The cross-cultural interaction taking place in an organization can pave the path for
negative outcome like conflict along with failure. On the other hand, cross-cultural
interaction can lead to positive outcome like that of increased responsibility. An authentic
leader should be able to instill adaptive capacity in the employees that can help them in
overcoming the aspect of stressful events. According to Bouckenooghe, Zafar and Raja
(2015), a leader should be cross-culturally resilient that can help in encouraging employees of
different cultural backgrounds in an organisation. It has been argued by Karatepe and
Karadas (2015) that resilience can help in increasing the performance of the employees and it
can promote the aspect of pro-active learning within an organisation. Cross cultural training

6AUTHENTIC LEADERSHIP AND PSYCHOLOGICAL CAPITAL
should be provided by the leader that can help in carrying out the process of exchange in
between a leader and his employees in an organisation. Psychological training should be
provided by the leader to the employees that can help in building psychological capital of
employees coming from different cultural background.
Effect of emotions on performance of employees
The management scholars have pointed out to the fact that there exist a relationship
between the factor of emotional intelligence and that of effective leadership in an
organisation. The organizations in the present age are embracing the concept of emotional
intelligence that can help an organization in sustaining in the competitive environment.
According to Jung and Yoon (2015), leadership can encourage the individuals along with the
teams for giving their best that can help in the achieving of the desired result. It can be said
that the process of leadership is emotional and the leaders being able to recognize the
emotional states of the followers can help in managing the emotional states of the followers.
It has been argued by Li et al. (2015) that the emotional intelligence can act as the
determinant in relation to effective leadership and the emotional intelligent leaders should be
able to promote the aspect of effectiveness at various levels within an organization. It has
been found that there exist positive correlation between the factor of emotional intelligence
and leadership outcome within an organisation. The leaders being able to manage the
emotions of the leaders can increase the efficiency of performance of employees working in
an organisation. According to Rizvi (2016), emotionally intelligent leaders can perform better
within the organization because they are more committed to the organization. Positive
emotions demonstrated by the leader can instill enthusiasm and co-operating in the
employees that can increase the overall performance of the employees in an organization.

7AUTHENTIC LEADERSHIP AND PSYCHOLOGICAL CAPITAL
Conclusion
The concept of authentic leadership can help in building aspect of legitimacy of the
leader. Authentic leader exhibiting positive psychological capacities can instill positive
behaviour within the employees working in an organisation. Exchange taking place in
between leader and employees can help in the developing of employees in an organization.
Trust should be built by the leader of an organization that can augment the performance of
employees in an organization. Relational transparency can prove to be of great benefit in
facilitating leader-member exchange taking place within the framework of an organization.
Leader being competent in different mechanics at that of the workplace can augment
psychological capital pertaining to employees within an organisation. Adaptive capacity
should be possessed by the leader that can help him in overcoming stressful situations taking
place within an organisation. A leader being cross-culturally resilient can encourage the
various employees within an organisation. Leaders should be able to recognize emotional
states pertaining to the followers that can manage emotional states in relation to followers.
The leaders who are emotionally intelligent are found to be more committed to the values in
an organization. Positive emotions of the leader can help in instilling enthusiasm in the
employees that can augment employee performance in an organization.

8AUTHENTIC LEADERSHIP AND PSYCHOLOGICAL CAPITAL
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