Positive Leadership: Authentic Leadership, LMX, PsyCap Analysis

This essay provides a comprehensive analysis of positive leadership, focusing on the interconnectedness of authentic leadership, Leader-Member Exchange (LMX), and Psychological Capital (PsyCap). It examines the core principles of authentic leadership, including self-awareness, ethical behavior, and relational transparency, and how these qualities foster trust and improve employee performance. The essay explores the LMX theory, emphasizing the importance of leader-member relationships and effective communication. Furthermore, it delves into the concept of Psychological Capital (PsyCap), outlining its components – hope, efficacy, resilience, and optimism – and its role in enhancing employee well-being and organizational growth. The analysis extends to the impact of emotions on leaders, managers, and employees, highlighting the significance of emotional control and its influence on decision-making, motivation, and overall performance. The essay also discusses the development of PsyCap across different employee groups and emphasizes the crucial relationship between authentic leadership, LMX, and PsyCap in creating a positive and productive work environment.

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Positive Leadership

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ESSAY
Authentic Leadership, LMX, PsyCap and Emotions
Analysis of the process of leadership
Leadership is a process to make the employee enable to achieve the goals. An
effective leader inspires and motivates others in order to achieve the goals of the
organisation. Leadership is essential in order to utilize the skills of the employee. Leadership
is an art of motivation by which employee are motivated towards the responsibilities of job. It
is related to a process of guiding the behaviour of the subordinates of the company for getting
their best efforts which aims at achieving success to the company. Leadership is important
because it makes the employee enable in learning their job responsibilities in a wide manner.
It generates enthusiasm and job satisfaction within the employee which creates a lot of
contribution in the success of the organisation. It is very important in order to direct and
guide the behaviour of the employee of the company. An effective leadership plays a vital
role in the success of the organisation (McKee, 2014, p. 81).
Critical analysis of authentic leadership
Authentic leadership described as a process of maintaining favourable and ethical
relationship between leaders and their subordinates. It deals with the concept of self-
awareness and moral values of a leader. By building trust and a favourable environment to his
workforce, an authentic leader improves the performance of employee. An authentic leader
can establish commitment, hard work and a good communication inside the organisation by
having a comfortable and transparent relationship with the employee. Authentic leaders are
those persons who collect the people together and empower them to achieve the objectives of
the organisation (P.Dickens, 2011, p. 1143). This type of leaders always gives value to the
input of his subordinates. By making an ethical foundation, the authentic leader always
develops a convenient level between his employees in order to maintain healthy relationship
inside the organisation. The leadership style of old generation like top down approach is not
fruitful in today’s scenario. Now a day employee wants their work should be recognised
inside the company. Employee also wants to feel motivated and appreciated by their
managers. In order to deal with the expectation of employee, the authentic leadership is a
perfect style to work (Avolio, et al., 2017, p. 401).

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Importance of authentic leadership
Authentic leadership makes a transparent and favourable environment of work with
high level of job satisfaction. This procedure leads towards the greater outcome from the
employee. The process of authentic leadership focus over balanced processing of information
with high level of morals and self- awareness. These characteristics improves the decision
making power of employee and managers because of good decisions a high amount of
outcome is received by employee. Authentic leaders are more interested in making the
employee excel in their work rather than overpower them (Hoch, et al., 2016, p. 503). A more
powerful and favourable approach of work can be obtained with the good characteristics like
hope, happiness and enthusiasm. According to the well-being theory, the positive psychology
of employee and managers is highly beneficial for the business of the company. Authentic
leadership is describes as a root element of effective leadership which helps in maintaining a
healthy environment for work (K Xiong, 2016, p. 831). An authentic leader always supports
his employee with the help of his knowledge and experience. He not only maintains a
favourable environment for work but also he makes his employee feel energetic and satisfied
with respect to their work. It can be said that authentic leadership is very important in the
success of the organisation with the help of full support and contribution of their subordinates
(H Leroy, 2015, p. 1679).
Analysis and relationship of LMX (Leader Member Exchange) within organisation
The LMX approach is based up on a two sided relationship between leaders and
subordinates. According to this approach, there is an exchange relationship of thoughts, ideas
and experiences between leaders and employee. The quality of leader-member -exchange
relationship decides the effectiveness of the leadership style (Shim, 2018, p. 445). The
development and establishment of a favourable working environment is based on the
exchange relationship of leader and other members of the company. An effective
communication skill is highly required to maintain a healthy relationship among the staff
members of the company. In this dynamic environment of work, the maintenance of
relationship between employee and leaders is quite difficult (Gregory, 2019, p. 702). The
LMX theory is a relationship oriented theory in which the focus in on the development of
relationships between leaders and their subordinates (Townsend, 2000, p. 459). Leaders focus
over the discussion with their subordinates and focus on the feedback provided by the
employee. Involvement of the employee feedback is one of the major attribute of this theory.

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A very good understanding of the various cultures and knowledge of different language is
must. It can be stated that leader membership gives a new meaning to the relationships of
leaders and its subordinates (Epitropaki, 2019, p. 501).
Analysis of Employee psychological capital and its relationship with the members of
organisation
Psychological capital is described as a psychological state of a person which leads
towards the positive development in the growth of the person. In this state, motivation took
place inside the person in order to give his best efforts towards the goals of the organisation.
Psychological capital helps the employee to cope up with the problems in their daily job
responsibilities. It helps the employee in sorting out various challenges of the job and
creating a new, fair and favourable environment for work. Moreover, psychological capital
helps the leaders and other employee to respond in an effective manner even under the
pressure of work. A positive environment with high level of psychological capital is essential
for a stabilized growth of the organisation (F Luthans, 2007, p. 11).
Analysis of the process of building psychological capital in the employee, managers and
leaders
Achieving psychological capital is a process of establishing higher job satisfaction and
commitment with increased positive interpersonal behaviour. It also refers in minimizing the
employee absenteeism and job quitting tendencies. Employee with a high level of
psychological capital tends to be more productive and beneficial for the company. An
effective leader can develop the psychological capital inside the employee by interact with
them in a positive attitude. The four major resources of the psychological capital are Hope,
Efficacy, Resilience, and Optimism (F Luthans, 2007, p. 11).
 Hope is defined as a feeling of enthusiasm towards achievement of success. It helps
the person in persevering towards the goal and continues to focus on the tasks related
to job responsibilities.
 Efficacy is having a confidence to put maximum efforts to get the success in the day
to day tasks related to job responsibilities. It also helps the person in the
accomplishment of challenging tasks.

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 Resilience refers to a quality with the help of it; a company can adjust or reform from
an unwelcome position. It is a power of the company by which it can restructure itself
after having problems and obstacles.
 Optimism defines as making a positive attribution towards the success of the
company. It plays an important role in the long term success of the firm. With the
help of full dedication and self-regulations, the psychological capital can be
established (Cole, et al., 2009, p. 467).
Development of psychological capital in different employee group
Low level employees: Usually workers of the firm are involved at this level. Although
they are getting less payment but still they are the integrated source of the company. A lot of
concern and employee appraisal is needed to develop a psychological capital inside these
employees. By recognising and appreciating their work, a favourable mental stage can be
achieved. Providing incentives, fringe benefits and perks could also a method to generate
happiness in the employee. Communicating and interacting with the employee helps in
problem solving of the employee. Involving their opinion in important decisions leads
towards the maintenance of a psychological capital and by this the efforts of the employee is
maximised (F Luthans, 2007, p. 11).
Middle level employees: Generally branch managers, team leaders, officers are involved
at this level of employees. To develop the psychological capital in these types of employees,
job enrichment and skills development programs are required. With the help of increasing
responsibilities and giving them authority to take important decisions are the key methods to
create enthusiasm in these employees. The major responsibility of these managers is to
communicate between low level managers and high level managers. The basic characteristics
of authentic leadership are essential for this level of employees. A very good communication
skill requires establishing an understanding level between low level managers, middle level
managers and high level managers (F Luthans, 2007).
High level managers: Developing psychological capital in high level managers is
essential to maintain a cordial relationship between high level managers and middle level
managers. It is very much required for the proper growth of the organisation with the help of
good relationship within the organisation. By having an optimism attitude in their behaviour,
the high level of manger will be able to look for the future of the company. Psychological
capital is stated a satisfactory confidence in the managers and at this level, a high decision

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making quality is essential. High level managers need to deal with important and crucial
decisions of the company, on which the future of the company is based. Futuristic decisions
involved the widening of the business of the company. Moreover, merger and acquisitions
and other crucial financial decision also attached at this level. The success of new product
development, pricing and marketing decisions and other important managerial decisions of
the company are based on the decision taking power of the managers. That is why
psychological capital is required for the high level managers in order to take correct decisions
with their positive mind-set (Cole, et al., 2009, p. 466).
Relationship between authentic leadership, LMX and PsyCap
As discussed in above paragraphs, authentic leadership focus over the cordial
relationship between employees, managers and leaders. All of these are the major factors of
organisational behaviour. LMX is also described as an exchange of thoughts between leaders
and members inside the organisations (Lee, et al., 2017, p. 38). PsyCap is defined as
establishment of positive environment of work among leaders, employee and managers with
positive mind-set (F Luthans, 2007, p. 11). All of the three concepts coincide in maintaining a
favourable environment of work by having a good communication and relationship among
the employees, managers and leaders (H Jiang, 2015, p. 240).
Analysis of human emotions
Emotions are described as a feeling of happiness, sadness, anger, surprise, joy,
excitement and other behavioural response. Emotions are result of the mental state which is
associated with the various incidents and experiences took place in the life of a person. The
business person has to maintain a stable position of emotion in his behaviour otherwise it
may affect his business and his tasks. Emotions are the disposition of feelings which have a
direct impact over the performance of a person (Othman, et al., 2008, p. 33). Psychological
capital derives a positive and balanced set of emotions in order to continuation of daily tasks
of job responsibilities (Cole, et al., 2009, p. 466).
Impact of emotions over leaders, managers and employees will be analysed.
Impact of emotions on leaders: Emotional control is highly required for the overall
success of high level managers. Some negative emotions like anger, frustration and irritations
may results in degrading the performance of the person. Moreover if a leader possesses these
types of negative emotions, his subordinates may get demotivated and may leads towards job

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quitting or dissatisfaction. The major responsibility of a leader is to control and direct the
behaviour of the employee. For effective fulfilment of his duties, a high level of positive and
supportive behaviour is essential. Sometimes positive emotions like extremely happiness may
also results in the incorrect decisions taken by the leaders. Moreover a balanced set of
positive emotions should be opted by the leaders (Grandey, 2016, p. 695).
Impact of emotions on mangers: Managers has to communicate between leaders and
employee. The negative emotions may severely affect the communication skills of the
managers. The understanding and response may degrade because of anger and frustrations.
Mangers has to deal with their job responsibilities on a daily bases. Negative emotions stop
the growth of the managers because it demotivates their subordinates and obstruct their
performance. With the help of balanced and positive emotions, managers may obtain a good
communication skills and confidence in order to achieve their goals and establish a
psychological capital inside the organisation (Ahuja, et al., 2018, p. 1005).
Impact of emotions on employees: Negative emotions could prove fatal for the
performance of employee. They have to deal with their job responsibilities and daily task.
Target achievement on daily or monthly bases is expected from employee (L Agote, 2015, p.
63). Negative emptions may cease the confidence of the person and degrade his performance.
Control on the emotions and get relief from stress, tensions, aggressions and angers leads
towards establishment of psychological capital and with the help of positive environment the
employees would be able to work efficiently and effectively (Grandey, 2016, p. 695).
It can be concluded on the bases of the above analysis, that by adapting the concept of
authentic leadership, LMX and PsyCap with stable set of emotions, the organisation would be
able to achieve its objective. These concepts not only related to a higher job satisfaction but
also lead towards greater productivity and benefits for the organisations. Positive
characteristics of the staff members also help in their personality development and make
them successful in their personal and professional lives.

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