The performance of an employee depends on the organisation and their ability to provide guidance and motivation to them so that the desired results could be produced by the employees. The report will critically analyse the relationship between authentic leadership, employees’ psychological capital (PsyCap) and leader-member exchange (LMX), after shedding light on the three concepts individually. The report will further derive the ways that the psychological capital of employees can be increased followed by the emotions of leaders or managers that create an impact on the performance of the employees.
Wong and Laschinger (2013) states authentic leadership as a kind of management type where the people are true to themselves and act in a genuine manner. Leaders who follow authentic leadership are able to gain the trust and the loyalty of their followers. Authentic leaders have the capability to get the best results due to the authenticity of path that they follow. This result is often said to be good for long term situations.
It is always evident that a leader does not always follow the same the kind of relation with each of their followers. The bonding between a leader and his followers is different for every individual in spite of being in the same team. Martin et al. (2016) in the article says that the leader-member exchange theory states that leadership is when the leader has several dynamic relation with his followers which is based on loyalty, trust, obligation, religion and others. The theory divided the group of subordinates into two groups namely in-group and out-group. The subordinates of the in-group are favoured by the leader and are given more attention as opposed to the out-group who are not favoured by the leader and does not receive as much resources as the in-group. These groups are distinguished by the leader based on their personal characteristics as well as their professional achievement.In this theory there are three stages that forms the relationship between the leader and the follower.
The first stage is the role taking stage where the leader assess the strengths and the weaknesses of any new member who joins their team. The second stage is role making where the members start working in a projects and completes the task allocated by the leader. This is the stage where the members can gain the trust of the leader and prove their loyalty towards him (Dusterhoff, Cunninghamand MacGregor 2014). The second stage forms the two groups – in group and out group based on the impression that they have created on the leader. The last stage of the theory is routinization. This stage builds up the routine of the team members. The members of the in-groupwork hard to maintain their relationship with their manager. The out-group may not like their leader any longer due to their lack of bond with him.
The psychological capital constitutes of four pillar which are Hope, Efficacy, Resilience and Optimism, known as HERO. These four pillars measures both job and life satisfaction of en employee. PsyCap is the reason for the growth and well-being of an individual. The concept was developed by Pioneer Fred Luthans who stated that it was important to determine the psychological state of an employee rather than their knowledge development to enhance their growth in the organisation (Newman et al. 2014).Luthans argued that there are two types of knowledge that are possessed by employees which are explicit knowledge and tacit knowledge. Explicit knowledge was skill that was derived from experience and educating oneself. However, tacit knowledge was developed by socializing with people in the organisation and is anovertime process. It was a source of competitive advantage for the employees and hence, should be invested in more by the employees.
Authentic leadership has been recognized as the new approach to an ethical leadership in current times that can help to overcome the challenges that are often faced by organisations. An authentic leader would be able to help an employee to thrive and grow in the organisation with maximum support and guidance. Wang et al. (2014) derives that employees who receive proper guidance from their leaders are seen to be more engaged in their work with high level of commitment towards the organisation.
Work engagement from the employees helps the organisation to retain the important talent, improve on the quality of service and enhance job performance.When an employee perceives a leader to be ethical and open in their approach to guide them, the employees feels an immediate bond of trust and loyalty with the leader and therefore work harder to prove themselves to the leader.They determine the leader as being competent enough to guide them and therefore follows the guidance and the command of the leader in hopes of proving their ability to the leader. Authentic leadership has a huge effect on the performance of the employees. These leaders are able to pass on their strong traits to the followers and inculcate positive traits among them. This strengthens the team and they function with the same moral values that the leader follows, thereby, establishing a strong performance as compared to any other team.
There is seen a relationship between authentic leadership and PsyCap. This relationship can be seen as the authenticity if the leader helps to improvethe psychological state of the employees. The employees would like to work under such a leaderwho follows an ethical oath and leads in a proper manner without any biasness and unethical approaches. Under the guidance of an authentic leader, the employees can find various ways to grow and enhance their already present skills. Laschinger and Fida (2014) further states that the leader would be able to build a positive psychological approach in the employees which will be helpful in their job performance. Moreover, authentic leaders not only has the ability to engage the followers into a trustworthy relationship but would also help them into following a path which would help them get positive outcomes which will be helpful in the long run. The leader-member exchange also has a relationship with both authentic leadership and PsyCap.
This relationship all interlinked where the positivity of the leader would help to build a strong relationship between the leader and the employee. The leader would be able to build an in-group based on their positive attitude and it may so happen that every team member would belong to the in-group. This happens when the leader does not distinguish their followers and treats everyone equally (Joo, Lim and Kim 2016). This motivates the employeesto work hard and give their best performance so that they can remain in the good books of the leader. They realise that the leader would be able to provide them with the best path that would help them in the process of their growth and this also enhances their psychological state and keep them motivated towards their work.
The relationship between the three concepts helps the organisation to build a strong workforce which will provide them with the best outputs in their work. The employees will be filled with positive traits and this would enable the organisation to retain the best talents that they have in the company. The employees would be satisfied with their job and their performance and the profitability of the organisation will also highly increase and also their competitive advantage. Therefore authentic leadership has a positive relationship with both leader-member exchange (LMX) and the psychological capital of employees (PsyCap).
It is important for every organisation to concentrate on building the PsyCap of each of their employees.There are different kinds of employees such as blue collar employees, white collar employees, professional employees, administrative employees and others. White collar employees often sit in offices therefore they need to be motivated through incentives and awards while blue collar employees conduct manual labour and hence their psychological capital may be increased through increasing the wage. Professional employees work under their won professional expertise and needs to be psychologically increased through developing their own field and administrative employees deal with the policies of the organisation and hence needs to be psychologically increased through an increase in salary and incentives. All of these kinds of employees need to improve their psychological capital to inculcate positivity in the workplace and to enhance their growth in the organisation.
Positivity in the organisation is a very important factor which helps to build a strong workplace. In the highly competitive environment where intense competition is seen among different employees, it is mandatory for each organisation to have their own competitive advantage which would help them to maintain their foothold in the market.Roche, Haar and Luthans (2014) argues that the priorities of employees has changed with the change in the market and the technological advances that the world is seeing. More pressure is being put on the employees to give their best so that the organisation may be able to derive the best results. However, this pressure can lead to a number of negative traits within the employees such as stress, fatigue, lack of interest in work and depression. These negative traits would lead the organisation to lose their talented workforce and hence decrease their competitive advantage. To ensure that the organisation is able to retain their workforce, they would have to take certain measures which will help the employees and workers to reduce the stress and pressure that they have been feeling in the organisation. It is necessary for organisation to retain their talent to succeed in the market.
The increase in the psychological capital of the employees who work in the organisation is of major benefit. The confidence of the employees has to be increased for them to believe in themselves and to determine that they have the knowledge to do the work that has been designated by the organisation to them. Confidence is a key factor in the psychological build-up of an employee. With confidence the employee will be able to function properly and efficiently and fully utilize the talent that they incorporate within themselves. Moreover, optimism among the employees is also necessary for the increase in psychological capital of the employees (Abbas and Raja 2015). No matter what the kind or type of job the employee does, optimism is very important to have faith in themselves and to believe that they possess the required knowledge. Optimism about theorganisation is also needed to have belief that the organisation would provide them with the proper leader, guidance and opportunity that would help them to thrive in the company. The measures taken by the organisation would help the employees to shed all their inhibitions about their work or the opportunities that would be given by the organisation in their benefit.
Emotions are present in every human being irrespective of their characteristics. In an organisation, an employee is highly affected by the emotions that is being portrayed by the management and his peers. The behaviour that they receive in their workplace is seen in their performance. The temperament of the employee in the workplace is the reason for their performance both good and bad. If the leaders of a team behaves with the employees in a rude manner then the employee will suffer a lot of pressure and stress regarding the work. In an environment of extreme stress the employee would not be able to operate properly(Vidyarthi, Anand and Liden 2014). They will not be able to use their talents in the right direction since they would be receiving demotivating treatment from their leader. In such a scenario the employee would not be able to give the best of their performance and might even leave the organisation if they feel; too demotivated from their leader. On the other hand, if the leader is one who motivates the team then the employees would be able to operate to the best of their abilities. A good leader would find the right ways to lead and guide the team and enhance their skills which would show them the correct path which the employees could follow to reach great heights. The employees will receive motivation from the leader and will be able to function properly since they will have a happy and supportive environment in the organisation. Therefore, good behaviour on the partof the leaders and the managers will have a good impact on the employees.
Conclusion:
Hence, it can be said that the performance of an employee depends solely upon the treatment that organisation do with them. An authentic leadership will help the employee to receive the right guidance so that they can develop their skill set in the organisation.A good leader would help to create a good relationship with the employee and increase their psychological capital which will be beneficial for the organisation in the long run. Moreover, it has been determined that the emotions of the leaders and the management in an organisation creates an impact on the performance of the employees, hence, the organisation should ensure that positive vibes are received from the managers and leaders to the employees so that they may be able to give good performance.
References:
Abbas, M. and Raja, U., 2015. Impact of psychological capital on innovative performance and job stress. Canadian Journal of Administrative Sciences/Revue Canadienne des Sciences de l’Administration, 32(2), pp.128-138.
Dusterhoff, C., Cunningham, J.B. and MacGregor, J.N., 2014. The effects of performance rating, leader–member exchange, perceived utility, and organizational justice on performance appraisal satisfaction: Applying a moral judgment perspective. Journal of business ethics, 119(2), pp.265-273.
Joo, B.K., Lim, D.H. and Kim, S., 2016. Enhancing work engagement: The roles of psychological capital, authentic leadership, and work empowerment. Leadership & Organization Development Journal, 37(8), pp.1117-1134.
Laschinger, H.K.S. and Fida, R., 2014. New nurses burnout and workplace wellbeing: The influence of authentic leadership and psychological capital. Burnout Research, 1(1), pp.19-28.
Martin, R., Guillaume, Y., Thomas, G., Lee, A. and Epitropaki, O., 2016. Leader–member exchange (LMX) and performance: A meta?analytic review. Personnel Psychology, 69(1), pp.67-121.
Newman, A., Ucbasaran, D., Zhu, F.E.I. and Hirst, G., 2014. Psychological capital: A review and synthesis. Journal of Organizational Behavior, 35(S1), pp.S120-S138.
Roche, M., Haar, J.M. and Luthans, F., 2014. The role of mindfulness and psychological capital on the well-being of leaders. Journal of occupational health psychology, 19(4), p.476.
Vidyarthi, P.R., Anand, S. and Liden, R.C., 2014. Do emotionally perceptive leaders motivate higher employee performance? The moderating role of task interdependence and power distance. The Leadership Quarterly, 25(2), pp.232-244.
Wang, H., Sui, Y., Luthans, F., Wang, D. and Wu, Y., 2014. Impact of authentic leadership on performance: Role of followers’ positive psychological capital and relational processes. Journal of Organizational Behavior, 35(1), pp.5-21.
Wong, C.A. and Laschinger, H.K., 2013. Authentic leadership, performance, and job satisfaction: the mediating role of empowerment. Journal of advanced nursing, 69(4), pp.947-959.
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