Analyzing the Relationship Between Authentic Leadership, LMX & PsyCap

This essay explores the intricate relationships between authentic leadership, Leader-Member Exchange (LMX), and employees' Psychological Capital (PsyCap), highlighting how authentic leadership positively influences LMX and employee performance. It emphasizes that authentic leaders, characterized by their values-driven behavior and supportive approach, foster employee loyalty and motivation. The essay also discusses the significance of building psychological capital—hope, optimism, self-efficacy, and resilience—among employees, differentiating strategies for professional, administrative, blue-collar, and white-collar workers. Tailored techniques, such as goal-setting for professionals and stress reduction for white-collar employees, are crucial for enhancing PsyCap. Furthermore, the essay addresses the impact of both employee and leader emotions on performance, noting the importance of emotional intelligence in leaders for fostering a positive and productive work environment, ultimately contributing to reduced employee attrition and increased organizational revenue. Desklib provides a platform to access this and similar solved assignments.

Running head: LEADERSHIP
Leadership
Name of the Student
Name of the University
Author Note

1LEADERSHIP
The term leadership, from the perspective of business, can be defined as the strategy that
is used by an individual in order to influence and guide the followers of an organization so that
the goal of the company can be achieved (Parke, Seo and Sherf 2015). The major responsibilities
of a leader involves making sound decisions for the benefit of the company, articulating as well
as creating a clear vision, providing the followers with required knowledge and tools and
establishing achievable goals for the organization. Having appropriate leadership skills is highly
crucial for managers since it helps them to enhance the revenue of the company in the long run.
The topic of this essay is the relationship between authentic leadership, Leader-Member
Exchange (LMX) as well as employees' Psychological Capital (PsyCap. In this essay, the
relationship between authentic leadership, Leader-Member Exchange (LMX) and employees'
Psychological Capital (PsyCap) will be analyzed and evaluated with the help of reviewed
relevant literatures. In this essay, the method of building psychological capital of different types
of the employees along with the impact of the emotions of the leaders on the performance of the
employees will also be analyzed.
In the first section of the essay, the definition and values of authentic leadership,
physiological capital of the employees and leader-member exchange have been discussed.
Authentic leadership can be defined as the approach to leadership that emphasizes on building
the legitimacy of the leader through honest relationship with the followers (Gill and Caza 2018).
This relationship should always be built on an ethical foundation and through demonstrating
value for their inputs. This type of leadership provides intrinsic motivation to the employees,
which, in turn, impose positive impact on their performance and loyalty towards the institution.
When it comes to the Leader Member Exchange theory, it can be said that the concept of the
theory bears similarities with the concept of authentic leadership. According to Wang et al.

2LEADERSHIP
(2014) this theory focuses on the relationship-based approach to leadership that focuses on the
two-way (dyadic) relationship between leaders and followers. Positive physiological capital can
be defined as the positive as well as developmental state of a person and is characterized by high
self-efficacy, optimism, hope and resiliency.
In this paragraph the impact of authentic leadership on the performance of the employees
has been discussed. According to Wang et al. (2014), authentic leadership does impose positive
impact on the Leader Member Exchange (LMX). Followers are found to be highly influenced by
the positive qualities of the leaders and internalize their values as well as beliefs. The behaviors
of the authentic leaders are highly motivated by their own values and one of their major
professional goals includes achieving openness as well as truthfulness in their relationship with
the subordinates. In order to achieve this objective, authentic leaders provides effective guidance
to his or her subordinates and remains physically as well as emotionally connected and
cognitively vigilant during the work performance of the followers. This sympathetic attitude of
the leader along with the constant support motivates the employees to perform well for the
organization and enhances their loyalty towards the same. Gill and Caza (2018) argued that the
performance of the employees are not only affected by the leadership style of leader only and
various factors like the work load and stress also act as a major factors when it comes to the
performance of the employees.
The topic of this paragraph is the relationship between the PSYCHOLOGICAL
CAPITAL and authentic leadership. It has been found that authentic leaders are capable of
influencing the job performance of the employees by virtue of building positive physiological
resources that includes hope, efficiency, reliance as well as optimism. Banks et al. (2016) stated
that the behavior of the authentic leaders come from these positive psychological resources. This,

3LEADERSHIP
in turn, lead to the development of themselves as well as the followers. The researchers stated
that the trustworthiness and hope of the leaders encourages the employee to give the best of their
capacity for the benefit of the organization. Not only this, authentic managers interpret as well as
exchanges information and interactions with the followers from a positive perspective that
evokes the positive emotions of the employees and make them feel empowered. Lee (2017),
argued that the impact of authentic leadership fades away when the positive resources of the
followers are already present. Followers who already possess high PsyCap will give their best
performance irrespective of the influence of the authentic leaders.
The topic to be discussed in this paragraph is the method of building physiological capital
amongst the professional as well as the administrative employees. King (2016), stated that
several differences can be pointed out in the processes of enhancing the psychological capital of
a professional employee to that of the administrative employees. The four chief aspects of
positive capital are Hope, Optimism, Self efficiency and Reliance. In order to enhance the hope
of the professional employees it is highly crucial for the leaders to work with the employees.
This enhances the quality of their goal setting along with their perceived ability to achieve those
objectives. On the other hand in order to enhance the physiological capital of the administrative
employees, training should be given to them so that they can develop a better understanding of
the psychology of their colleagues and subordinates. Along with that being on the administrative
level, these employees should be trained to develop the will to reach the final objective of the
organization. Similarly, in order to enhance the self-efficiency of the employees, more proactive
roles should be given to the employees. Leaders or managers should always involve their
subordinates while making any kinds of effective decision. This in turn will result in employee
empowerment.

4LEADERSHIP
The topic of this paragraph includes the methods of developing physiological capital
among the employees. Considering the fact that that each and every type of employees, be it
administrative, professional, while collar or blue collar, posses both high phyCap as well as low
psycap employees, it is highly crucial for the managers to enhance their physiological resources.
Enhanced physiological capital of the employees of every designation will be highly beneficial
for the organization since it will prevent employee attrition and enhance the revenue of the
company in the long run. Lyons and Schweitzer (2014) suggested that optimism of the leaders
should educate employee to interpret positive events to be permanent, internal as well as
persuasive while considering negative events as temporary, external; as well as situation specific.
In this paragraph, the method of building psychological capital among the blue collar and
the white collar labor has been discussed. The term blue collar employee refers to the employees
who perform manual labor (Martin-Raugh et al. 2016). Some of the job roles associated with the
blue collar employees includes Locomotive Engineer, Elevator Installer and Repairer and
Construction and Building Inspector. When it comes to white collar employees, it includes
employees who work in office or in professional environment. Inglehart and Clark (2018) stated
that in order to enhance the Physiological capital of the white collar employees it is more crucial
for the leader to focus on reducing their physical stress in order to enhance their optimism. For
these, focus should be on recreational activities that will provide physical relaxation. One of the
major examples of this type of activities includes watching optimistic films. Martin-Raugh et al.
(2016) argued that authentic leaders need to apply different technique in order to enhance phycap
for white collar and blue collar employees. For blue Collar employees, physical recreation
activities possess the potential to enhance the leader member engagement along with optimism
and hope.

5LEADERSHIP
In this paragraph, the technique of enhancing physiological capital of employees from
different ethnicities as well as different general cohort has been discussed. According to Laborde
et al. (2014), in order to enhance phycap of the employees from different ethnicity as well as
from different cohort it is crucial to enhance the bonding between them. In order to enhance the
optimism of a multicultural workforce, the leader should introduce ice breaking activities where
both personal as well as professional conversational encouraged. While professional
conversation will enhance the respect of the team members about the professional skills and
knowledge of their team member, unprofessional or personal conversation will help them to
understand each other’s personal background and culture. This in turn will help the employees
to develop respect as well as reliance towards each other. However Gooty et al. (2014), argued
that enhancement of phycap does not depends on ethnicity or generation gap of the employees.
Rather than this factor is highly depended on the efficiency and leadership skills of the team lead
or manager of a specific organization
The topic of this paragraph includes impact of emotions of the employees on the
performance of the same. Parke, Seo and Sherf (2015), opined that emotions plays a major role
in the performance of the employees in case of jobs that includes face to face interactions with
the consumers. It becomes highly necessary for the staffs to maintain balanced emotion in their
approach towards the work. According to Mathew and Gupta (2015), the effect of
demographical variable that includes age, gender as well as academic qualification on the
emotional intelligence of the employees is immense. It has been found that employees who are
more experience and are middle or higher aged possess more emotional intelligence compared to
new and inexperienced employees. The value of self-awareness was found to be more in women
compared to that of men (Parke, Seo and Sherf 2015). Another factor that enhances the

6LEADERSHIP
emotional intelligence of the employees includes education. Employees with higher educational
qualification posses more potential to control their emotions at adverse time compared to
employees with lower educational potential (Parke, Seo and Sherf 2015). Uncontrollable
emotional intelligence posses the potential to reduce the performance of the employee or may
even lead to employee attrition.
This paragraph intends to discuss the impact of emotion of the leaders on the
performance of the employees. Parke, Seo and Sherf (2015) has described emotional intelligence
as the capacity to be aware of, control and express one's emotions as well as to handle
interpersonal relationships judiciously and empathetically. The five major elements of emotional
intelligence include self-awareness, self-regulation, motivation, empathy and social skills. A
leader with higher emotional intelligence possesses the potential to conduct effective
communication with the employees (Gooty et al. 2014). Employees who are being led by an
leader with higher emotional control evidence positive changes in both engagement as well as
production among the employees. Not only that, emotional stability of the managers helps the
employees to experience an emotionally healthier s well as highly satisfying work experience.
Emotionally stable leaders facilitate to create a stable official environment of the employees. The
work culture becomes more inspirational as well as motivating for the employees when they are
not scolded or threatened frequently on the basis of their performance. Gooty et al. (2014) stated
that the performance of the employees under the supervision of an emotionally stable manager
gets enhanced due to the work friendly culture as well as motivation obtained from the
workplace.
This paragraph is comprised of the summary of the above discussion. Authentic
leadership is directly proportional to the physiological Capital as well as leader-member

7LEADERSHIP
exchange. This type of leadership posses the potential to enhance the performance of the
employees. Along with this, authentic leadership reduces attrition of the employees as well as
enhances the overall revenue of the organization. The study also found that diffrent techniques
should be applied in order to enhance positive physiological capital of different types of
employees. In order to enhance the hope of the professional employees it is highly crucial for the
leaders to work with the employees. On the other hand in order to enhance the physiological
capital of the administrative employees, training to understand the capability of their subordinate
should be given. When it comes to the impact of emotional intelligence of the employees on the
performance of the same, it is found that EI depends on several factors that includes age, gender
and education and greater the EI greater is the performance of the employees.

8LEADERSHIP
Reference list
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