*2.2. Leader-Member Exchange*

The relationship between leader and employees is a necessary determinant of work attitude and behavior because leaders are those *who inspire their followers through quality relationships and support by providing them with a friendly culture, which then results in employees producing high-quality work* Surucu and Sesen (2019). An authentic interaction between leaders and employees (or high-quality LMX) increases employees' sense of cohesion and trust, while trust between leader and employees is an important prerequisite for better performance. LMX reduces people's fear and gives them confidence so they can perform above-standard and high-quality work. High LMX levels within an organization make employees feel secure in the knowledge that if they perform well, their output will be acknowledged, but even they fail, their leader will encourage them. Employees in high LMX are closely associated with their leaders who supply them with more technical support, expertise and knowledge. This knowledge and skill may inspire employees' cognitive processes and encourage them to take an active role in task performance Mumford et al. (2002). Furthermore, employees involved in high-quality LMX tend to encourage their colleagues to behave proactively in order to fulfill job responsibilities: when the observer's perception is stretched towards cognitive equilibrium, those individuals having close relationships with a notable person in the team (e.g., the leader) are more likely to be warmly welcomed by other team members. As a result, the focus member's reputation and trustworthiness within the team will increase Lau and Liden (2008).

LMX plays a vital role in increasing staff productivity by providing effective assistance but also strong support. The growth of leadership caliber may offer a strong foundation for the development of employee attributes within a company, either via direct or indirect links between employee performance and leadership. Existing literature Duan et al. (2017) confirms that LMX has a positive influence on high-quality work, resulting in better performance. The explanation for this interaction is based on Emerson's social exchange theory Emerson (1976) which states that employees feel grateful to match their leaders' efforts by engaging in additional work role behavior. As a result, employees respond by participating in proactive actions that promote the business goals. In addition, LMX may encourage proactive behavior among workers and provide employees with a sense of security Huynh et al. (2019) which may be an important incentive to achieve higher performance levels.

#### **Hypothesis 2a.** *Leader-member exchange has a positive impact on employee task performance.*

There is a concern that LMX may have an impact on employee performance through organizational commitment. We believe that generating such a commitment through friendly, supportive and high-quality relationships with employees cultivates the intention to do work. Kozlowski and Doherty (1989) mention that supervisors and leaders are representatives of organizational policies, strategies and procedures; thus, employees consider their supervisors' actions to be corporate policies. As a result, any encouraging action taken by a leader is regarded as an organization's support which creates a sense of affiliation to the firm. However, even though a relationship between LMX and organizational commitment has been studied so far, how organizational commitment mediates the relationship between LMX and employees' performance is still poorly investigated.

**Hypothesis 2b.** *Leader-member exchange is positively linked to employee performance, provided that organizational commitment is supportive of higher employee performance.*

#### *2.3. Organizational Commitment and Employee Performance*

One more literature record refers to the positive impact of organizational commitment on employees' performance Khanet al. (2010). An organizational commitment is defined as a cognitive interpretation of organizational values Smith and Meyer (2009) and refers to a psychological relationship.

Provision of essential resources to realize an idea is critical for commitment, and their distribution is another indicator to the organization of the assistance of high-quality employee relationships. The relationship between high quality LMX, commitment and employee performance is also rooted in social exchange theory Emerson (1976): when leaders interact in a trustworthy and appreciative manner, generalized reciprocity appears. The social exchange theory's principle of restricted reciprocity can be used to explain how organizational commitment leads to high employee performance. Employees' commitment to the organization creates reciprocity in the context of intentions to perform tasks, quality work, or more work. As a result, we believe that in reciprocity employees become more

productive and have better intentions to work; this is the stage at which employees feel committed to the organization and perform well.

#### **Hypothesis 3.** *Organizational commitment have a positive impact on employee performance.*

All five hypotheses are represented by a single model depicted in Figure 1. It also contains a framework along with hypothesized relationships between observed variables.

**Figure 1.** Summary of research framework.

#### **3. Data and Methodology**

While existing research on employees' quality of work and its antecedents have been undertaken from a western viewpoint, in our paper we would like to investigate the influence of leaders' expectations and leader-member exchange in motivating employee performance in an environment which is different from Europe and the US in terms of economy and environmental and social aspects. Pakistan was chosen for our research due to its diverse and collectivist nature Khan (2022) so we expect to record those cultural attributes that may impact the context of LMX and leadership expectations. As long as cultural values act as normative rule guides for employees, dictating the guiding rules and norms in both personal and professional life Walumbwa et al. (2007), individual values show how anyone is impressed and influences others, as well as how leadership is considered and evaluated. Consequently, by targeting the case of Pakistan, this study adds to the literature by considering the role of leadership in employee performance.

The target population for this research includes all employees at the middle level of management (branch, area and operational managers) in the top ten banks, including public, private and multinational corporations, in Pakistan over a ten year period (2010– 2020). We focused on middle-level managers because they have a double role—on the one hand, they are leaders to their juniors and, on the other hand, they act as employees to the senior level management. With 8761 branches in the country (for all top ten banks), nearly a third of them are located in three major cities of Pakistan—Karachi, Lahore and Islamabad—with almost ten thousand employees.

For the purpose of this study, the data was gathered at the primary level by a questionnaire. Our questionnaire includes two main sections. First, employees were asked to answer four demographic questions (gender, age, experience, qualification). In the second stage, employees expressed their opinion on over 21 questions covering four major topics:


• leader-member exchange (LMX), covering seven items from Scandura and Schriesheim (1994).

The responses from the target audience were gathered using a seven-point Likert scale ranging from strongly disagree (1) to strongly agree (7). In order to fit the questionnaire to the Pakistan context, the wording for some of the questions was changed. After that, the questionnaire was distributed to 650 mid-level management employees (branch managers, area managers and operations managers). A total of 350 filled questionnaires were returned (response rate 54%). After screening, 70 responses were dropped, leaving us with 280 valid responses to analyze (valid response rate 43%).
