The Role of Employee Engagement in the Effect of Leader-member Exchange on Organizational Commitment: a Study From Indonesia

Wirawan Samahita Wirotama ()
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Wirawan Samahita Wirotama: Jakarta, Indonesia

Journal of Human Resource Management, 2022, vol. 25, issue 2, 30-46

Abstract: Purpose – This paper aims to explore the effect of leader-member exchange (LMX) on organizational commitment with employee engagement as a mediator in companies in Indonesia. Design/methodology/approach – This study used a sample of 170 employees in Indonesia and analyzed the data using partial least square-structural equation modelling (PLS-SEM). Findings – The findings showed that LMX has a positive and significant direct effect on organizational commitment and employee engagement. Employee engagement also has a positive and significant direct effect on organizational commitment. Furthermore, employee engagement partially mediates the effect of LMX on organizational commitment. Limitations - First, the sample size is small, and the sample characteristics are skewed to one of the subcategories. Second, this study only employs quantitative methods to describe how LMX influences organizational commitment via employee engagement. Third, this study considers one of the elements that can influence the effect of LMX on organizational commitment, namely employee engagement. Practical implications – Leaders play a crucial role in shaping employee engagement and commitment to the organization. Therefore, leaders should value employees’ contributions to the organization and provide their employees with a supportive environment and mentoring. Moreover, this study will help organizations in designing their employee experience program. Originality/value – This study contributes to the body of knowledge by exploring how LMX, organizational commitment, and employee engagement are related in the Indonesian context and examining the mediating role of employee engagement on the effect of LMX on organizational commitment.

Keywords: Leader-member exchange; Employee engagement; Organizational commitment; Social exchange theory (search for similar items in EconPapers)
JEL-codes: M12 O15 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:cub:journl:v:25:y:2022:i:2:p:30-46

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