Toward an understanding of the relationship between LMX and performance over time: the role of trust in leader and appraisal satisfaction

PurposeThe purpose of this two-wave longitudinal study was to examine the impact of leader–member exchange (LMX) on employee performance through trust in leader and appraisal satisfaction both cross-sectionally and after one year, and the reciprocal effect of employee performance on LMX one year later.Design/methodology/approachA full panel data design was applied and the sample consisted of 289 employees of a Peruvian insurance organization. Structural equation modeling (SEM) was used to test the research hypotheses.FindingsThe results show the relationship between LMX and performance was sequentially mediated by trust in leader and appraisal satisfaction on both occasions. Additionally, employee performance at Time 1 positively influenced LMX at Time 2.Originality/valueThis study highlights the dynamic and complex relationship between LMX and employee performance over time while identifying relevant variables that influence it.