This essay delves into the relationship between authentic leadership, leader-member exchange (LMX), and the psychological capital (PsyCap) of employees. It highlights how authentic leadership, characterized by openness, self-awareness, and ethical behavior, fosters trust and motivation among followers. The essay explores the leader-member exchange theory, emphasizing the two-way relationship between leaders and followers based on respect and trust. It discusses how authentic leaders influence followers' performance through positive psychological states, particularly by contributing to their PsyCap, which includes efficacy, hope, optimism, and resilience. The analysis also addresses the role of PsyCap as a moderator between authentic leadership and job performance, noting that the impact of authentic leadership is more pronounced when followers' PsyCap is relatively low. Furthermore, the essay examines the antecedents of PsyCap, identifying factors such as demographics, personality differences, job characteristics, and supervision that can predict levels of PsyCap at work, underscoring the importance of positive factors in organizational and individual development. This document is contributed by a student and published on Desklib, a platform providing study tools for students.