Leaders—watch out for LMX differentiation: A multilevel model of leader-related antecedences and consequences of LMX differentiation

Research has shown that leader–member exchange differentiation affects individual and group outcomes. However, it is not yet clear how such unequal treatment affects the team’s perception of their leader in terms of leader-related outcomes, such as perceived leader communication quality, satisfaction with the leader, and perceived leader effectiveness. We analyzed how leader–member exchange differentiation in teams affects leader-related outcomes, and how it is affected by transformational leadership at the team level. Multilevel analyses of data from 92 teams with 831 employees indicated that leader–member exchange differentiation within teams is negatively related to leader-related outcomes, whereas transformational leadership is negatively related to leader–member exchange differentiation. In addition, we found positive indirect effects from transformational leadership to the leader-related outcomes via leader–member exchange differentiation.