The influence of supervisor bottom-line mentality and employee bottom-line mentality on leader-member exchange and subsequent employee performance

Are supervisors who care more about profits than employee well-being seen by employees as being good exchange partners? How do employees perceive and respond to supervisors who treat the bottom line as more important than anything else? Supervisors who hold a bottom-line mentality (BLM) neglect competing priorities such as employee well-being and ethical practices to focus on securing bottom-line success. We find high-BLM supervisors serve as low-quality exchange partners with their employees, resulting in employee perceptions of low-quality leader-member exchange (LMX) relationships. In turn, employees reciprocate by withholding the very thing the supervisor desires—performance—in order to maintain balance in the exchange relationship. As such, supervisors who possess a BLM could actually be negatively impacting the organization’s bottom line through the harmful social exchange relationships they engender with their employees and their impact on employee task performance. We also examine the moderating role of employee BLM on these relationships. When employee BLM is low, we observe a greater negative effect on employee value judgments of the supervisor (i.e. reduced LMX perceptions) and lower employee performance. We test and find support for all of our hypotheses in two multi-source (i.e. employee-supervisor dyads), time-lagged field studies (N = 189 and N = 244).