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PERSON-ORGANIZATION FIT AND WORK ATTITUDES: THE MODERATING

ROLE OF LEADER-MEMBER EXCHANGE



BERRIN ERDOGAN
School of Business Administration
Portland State University
Portland, OR 97207-0751

MARIA L. KRAIMER
ROBERT C. LIDEN
University of Illinois at Chicago

INTRODUCTION

The notion of person-organization fit (P-O fit) is based on the interactionist point of view that
employees work attitudes and behaviors are a function of individual and situational
characteristics (Chatman, 1989; George, 1992; Terborg, 1981). Fit is achieved when individual
characteristics are congruent with situational characteristics, which, according to the
interactionist point of view, results in more positive attitudes. Consistent with the prevailing
perspective on P-O fit, we defined P-O fit as the match between the organizations values (or
culture) and the individuals values (Adkins, Russell, & Werbel, 1994; Chatman, 1989, 1991;
Kraimer, 1997; Kristof, 1996; OReilly, Chatman, & Caldwell, 1991). Value congruence is a
significant form of fit because values are relatively enduring beliefs that form a standard for
guiding action, developing and maintaining attitudes, and justifying ones own actions and
judging others (Rokeach, 1968). Achieving high-levels of P-O fit (value congruence) amongst
employees through hiring and socialization is often regarded as the key to retaining a workforce
that is satisfied and committed to the organization (Kristof, 1996).

Despite the prevalence of research supporting the positive impact of P-O fit on work attitudes,
there are still reasons to examine this relation further. For example, Meglino, Ravlin, and Adkins
(1989) found that employee-management work value congruence negatively correlated with
various facets of satisfaction and that it was not related to organizational commitment.
Additionally, the explained variance in the studies noted above tends to be modest. For example,
Chatman (1991) found that P-O fit explained 15% of the variance in job satisfaction, OReilly et
al. found that P-O fit explained between 6% and 12% of the variance in the employee attitudes
examined, and Bretz and Judge (1994) found that P-O fit explained 12-32% of the variance in
job satisfaction and 1% - 9% of the variance in the extrinsic career success measures (salary and
job level) depending on how P-O fit was calculated. One potential explanation for the moderate
effects of P-O fit on work attitudes is that the employees attitudes may also be influenced by
immediate, influential relationships.

One particular work relationship that plays an important role in shaping employee attitudes is the
relationship between leaders and employees (Dienesch & Liden, 1986; Graen, 1976; Graen &
Scandura, 1987). Leader-member exchange (LMX) is defined as the quality of the interpersonal
exchange relationship between an employee and his/her supervisor (Graen, 1976). High LMX
relationships are characterized by mutual liking, loyalty, professional respect, and contributory
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behaviors, whereas low LMX relationships entail a lack of mutual liking, loyalty, professional
respect, and contributory behaviors (Dienesch & Liden, 1986; Liden & Maslyn, 1998). Because
leaders have power and influence over their subordinates in providing extrinsic and intrinsic
rewards, we expect that the quality of that relationship will affect the degree to which P-O fit
relates to subordinate satisfaction and commitment. The purpose of the current investigation was
to examine the moderating role of LMX in explaining the relations between P-O fit, satisfaction
and organizational commitment. We assessed both the job and career dimensions of satisfaction.
It is our general contention that when LMX quality is high, P-O fit will not be related to
employee attitudes. In contrast, when LMX quality is low, P-O fit will be positively related to
employee attitudes. The rationale for this argument is that both organizational cultures and
supervisors are sources of intrinsic and extrinsic rewards. Because the leader-subordinate
relationship is a more proximal relationship than is the organization-person relationship the
leader may have a substantial impact on shaping employee attitudes.

Moderating Role of LMX

The central premise of LMX theory is that, within work units, supervisors develop different
types of relationships with their subordinates. The quality of these relationships determines the
amount of physical or mental effort, material resources, information, and/or social support
exchanged between the supervisor and subordinate (Liden, Sparrowe, & Wayne, 1997). Quite
simply, a high quality LMX relationship involves more exchange of effort, resources, and
support between the two parties, whereas a low quality LMX relationship is characterized by
minimal exchange of effort, resources, and support between the two parties. A consistent finding
of LMX research is that LMX is positively related to job satisfaction and organizational
commitment (see Liden et al., 1997 and Gerstner & Day, 1999, for reviews). We expect LMX to
moderate the relation between P-O fit and work attitudes for primarily two reasons.

First, individuals work attitudes are partly shaped by the receipt of extrinsic and intrinsic
rewards (Herzberg, Mausner, & Synderman, 1959). For example, the research on psychological
empowerment has found that jobs that provide a sense of control (an intrinsic reward) are more
satisfying (Spreitzer, Kizilos, & Nason, 1997) and are associated with greater organizational
commitment (Kraimer, Seibert, & Liden, 1999). Receiving a promotion or salary raise (an
extrinsic reward) is also satisfying (Judge, Cable, Boudreu, & Bretz, 1995; Seibert, Crant, &
Kraimer, 1999). These intrinsic and extrinsic rewards are determined, in part, by the
organizations culture and the leader. That is, the organizational culture defines the behavioral
standards and expectations that will be rewarded as well as what type of rewards will be
provided (OReilly et al., 1991). At the same time, the basic premise of LMX theory implies that
a primary distributor of rewards is the subordinates leader. In fact, research has found LMX to
be positively related to promotions and salary progressions (Wakabayashi, Graen, Graen, &
Graen, 1988; Wayne, Liden, Kraimer, & Graf, 1999) and to supervisory performance ratings (see
Liden et al, 1997 for a review). LMX has also been positively associated with intrinsic rewards
such as autonomy (Liden & Maslyn, 1998), empowerment (Liden, Wayne, & Sparrowe, 2000)
and support (Scott & Bruce, 1994). By definition, those with high P-O fit are more likely to meet
the organizations behavioral standards and expectations for rewards. However, leaders have a
more active role in reward distribution compared to the organization in that, they are often
personally responsible for distributing rewards to employees. Thus, individuals with high quality
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LMX may still be satisfied with their jobs and committed to the organization, even when their P-
O fit is low.

A second rationale for the moderating role of LMX on relations between P-O fit and attitudes is
that leaders may also compensate for a lack of P-O fit by providing employees with a type of
assimilation different than that provided by P-O fit. Socialization theorists assume that
employees are assimilated into the organization when the employees values match the
organizations culture (Chatman, 1991). However, assimilation may also occur if the leader is
willing to provide the employee with sponsorship and access to the leaders informal networks
(Sparrowe & Liden, 1997). According to Sparrowe and Liden (1997), LMX may be viewed as a
sponsorship process through which subordinates are either assimilated into the leaders inner
circle or become isolated from this important informal network. Thus, an individual with a high
quality LMX is likely to be assimilated into the leaders informal network of relationships,
whereas a subordinate with low LMX is not. This type of social assimilation may be just as
important, if not more so, in explaining work attitudes than is assimilation to the organizations
values. Therefore, the lack of P-O fit may more adversely affect low LMX individuals.

The above discussion suggests that when subordinates enjoy high LMX status, P-O fit will have
little effect on work attitudes. That is, in high quality LMX relationships, leaders will have a
more pervasive influence on attitudes, because they will be providing subordinates with rewards
and sponsorship that is tailored to subordinates needs. However, when subordinates have low
LMX, P-O fit will explain variance in work attitudes. In this case, leaders are not providing as
many rewards or sponsorship to subordinates, thus, subordinates will rely on the general
organization for rewards and support.

Hypothesis 1: The relationship between P-O fit and job satisfaction will be moderated by LMX
such that when individuals have high LMX, P-O fit will not be related to job satisfaction. When
individuals have low LMX, P-O fit will be positively related to job satisfaction.

Hypothesis 2: The relationship between P-O fit and career satisfaction will be moderated by
LMX such that when individuals have high LMX, P-O fit will not be related to career
satisfaction. When individuals have low LMX, P-O fit will be positively related to career
satisfaction.

Hypothesis 3: The relationship between P-O fit and organizational commitment will be
moderated by LMX such that when individuals have high LMX, P-O fit will not be related to
commitment. When individuals have low LMX, P-O fit will positively be positively related to
commitment.

METHOD

Subjects and Procedure

Teachers working in 30 public high schools in Istanbul, Turkey were surveyed. Government
regulations control teacher selection and salary increases in these high schools. However,
superintendents, the immediate superiors of teachers, still have an important role in school
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administration and resource distribution such that, they are responsible for all the day-to-day
activities such as class scheduling, selection of teachers for various committee works, selecting
teachers for developmental activities, and evaluating performance of employees. They may ask
for the transfer of a teacher out of their school, or they may request performance bonuses and
formal recognition letters for high performers. Schools were approached by a team of high
school consultants. All teachers who were present on the data collection day were asked to
participate. Within-school response rates ranged between 57 and 100%, with an overall response
rate of 80%. All surveys were administered in Turkish. In each school, teachers who were
present during data collection were randomly given one of two surveys. The first survey asked
subjects to report their perceptions of organizational values. Within each school, 5-17 teachers
completed the culture survey for a total of 253 respondents from 30 schools. The second survey
assessed organizational culture preferences and work attitudes. A separate group of 5-18 teachers
in each school completed this survey, with a total number of 271 respondents. Teachers who
completed the culture survey were 57.1% female and had an average of 9.64 years of work
experience in their current schools. Teachers who completed the culture preference and work
attitude survey were 56 % female and had an average of 9.91 years of work experience in their
current schools.

Measures

Organizational Culture. Teachers were asked to respond to the Organizational Culture Profile
(OCP) developed by OReilly et al. (1991). The OCP is a measure utilizing Q-sort methodology.
Respondents placed 54 organizational values of OCP into 9 categories ranging from 1=very
uncharacteristic of my organization to 9= very characteristic of my organization. Respondents
were asked to put a specified number of values into each category and the required item-category
pattern was 2-4-6-9-12-9-6-4-2 as utilized by OReilly et al. (1991). We conducted a principal
component analysis of the culture survey with oblique rotation. In the final solution, 16 values
loaded at .40 or higher on seven culture dimensions and explained 62.5% of the variance. Two
factors represented respect for people. The other culture dimensions were innovativeness,
outcome orientation, team orientation and aggressiveness, which paralleled OReilly et al.s
(1991) original dimensions. An action orientation factor emerged, appearing to be the opposite of
the original stability factor. The 16 values retained as a result of factor analysis were used to
construct organizational culture profiles for each school. Responses within each school were
aggregated to construct a single profile for each school consisting of 16 values (range of
respondents: 5-17, mean = 8). In order to warrant aggregating individual reports of observed
school culture and to form school culture profiles, we assessed interrater agreement in culture
profiles using rwg (James, Demaree, & Wolf, 1993). For the seven culture dimensions, median
rwgs ranged between .61 and .81. Only one of the dimensions measuring respect for people and
action orientation had median rwgs below .70, providing justification for aggregating individual
reports of organizational culture to the school level.

Organizational Culture Preferences. Respondents sorted the 54 values of OCP into 9 categories
describing how desirable each value is in the organization in which they would prefer to work.
The answers ranged from most desirable to least desirable. Respondents were asked to put a
specified number of values into each category and the required item-category pattern was 2-4-6-
9-12-9-6-4-2 as suggested by OReilly et al. (1991). The 16 values representing the items that
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survived the factor analysis of organizational culture surveys were retained to represent the
organizational culture preferences of the subjects.

Person-Organization Fit. Consistent with OReilly et al. (1991), we used the correlation between
individual culture preferences and organizational culture profiles to represent P-O fit. When
calculating these correlations for each individual, only the 16 values surviving the factor analysis
of organizational culture surveys were used.

Leader-member exchange (LMX). LMX quality was measured with the 12-item LMX-MDM
scale developed by Liden and Maslyn (1998). Respondents used a 7-point Likert type answer
format ranging from 1= strongly disagree to 7 = strongly agree (Cronbachs alpha = .94).

Satisfaction. Job satisfaction was measured with six items from the Minnesota Satisfaction
Questionnaire (Weiss, Dawis, England, & Lofquist, 1967). Career satisfaction was measured
with five items from Greenhaus, Parasuraman and Wormley (1990). A 7-point Likert type
answer format was used (1= strongly disagree, 7 = strongly agree) for both measures. The item
measuring satisfaction with progress toward income goals was dropped from the career
satisfaction scale because it had a negative effect on reliability. In a principal components
analysis of job and career satisfaction items using oblique rotation, 64.88% of the variance was
explained by two factors, and job satisfaction and career satisfaction emerged as two separate
factors. One of the job satisfaction items had a cross-loading over .40 on career satisfaction, and
this item was dropped. (Cronbachs alpha = .79 for job satisfaction, .88 for career satisfaction).

Organizational Commitment. Six items from the affective commitment scale of Allen and Meyer
(1990) were used to measure organizational commitment. A 7-point Likert type response format
was used (1= strongly disagree, 7 = strongly agree; Cronbachs alpha = .75).

Control variables. Organizational tenure in years was controlled because it may be related to
satisfaction and commitment.
RESULTS

P-O fit was significantly correlated with career satisfaction (r = .13, p<.05). LMX was positively
correlated with job satisfaction (r=.29, p<.01), career satisfaction (r = .17, p<.01) and
organizational commitment (r = .39, p<.01). P-O fit was not correlated with LMX quality,
indicating that teachers who have a higher quality relationship with their superintendents do not
necessarily have higher levels of P-O fit. To investigate whether LMX moderated the
relationship between P-O fit, job satisfaction, career satisfaction and organizational commitment,
we conducted three hierarchical moderated regression analyses. In the first step, organizational
tenure was entered as a control variable. In the second step, P-O fit and LMX were entered after
they were centered (Aiken & West, 1991). In the final step, the interaction term was entered into
the equation. For job satisfaction, the interaction term in the third step was significant (beta= -
.13, t = -2.30, p<.05; change in R
2
= .01, change in F = 5.31, p<.05, Adj. R
2
= .10, F = 8.58,
p<.01), supporting hypothesis 1. LMX was also related to job satisfaction (beta= .28, t = 4.82,
p<.01). For career satisfaction, a similar pattern of results were found (beta= -.20, t = -3.45,
p<.01; change in R
2
= .04, change in F = 11.92, p<.01, Adj. R
2
= .12, F = 10.06, p<.01),
supporting hypothesis 2. Organizational tenure (beta=.22, t = 3.88, p<.01) and LMX (beta=.16, t
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= 2.82, p<.01) were also related to career satisfaction. No support was found for hypothesis 3
(beta= -.10, p>.05; change in R
2
= .01, change in F = 2.82, p>.05, Adj. R
2
= .15, F = 12.99,
p<.01). LMX was the only significant predictor of organizational commitment (beta= .38, t =
6.76, p<.01).

Post-hoc analyses described by Aiken and West (1991) demonstrated that P-O fit was positively
related to job satisfaction when LMX was low (beta= .16, t=2.04, p<.05) and was not related to
job satisfaction when LMX was high (beta= -.09, t = -1.13, p>.05). Similarly, P-O fit was
positively related to career satisfaction when LMX was low (beta=.27, t = 3.62, p<.01) but was
not related to career satisfaction when LMX was high (beta=-.10, t= -1.17, p>.05). These results
provide support for hypotheses one and two.

DISCUSSION

Consistent with hypotheses one and two, LMX moderated the relations between P-O fit and both
job and career satisfaction. P-O fit served to increase job and career satisfaction for individuals
engaged in low LMX relationships as hypothesized. This effect was pronounced for career
satisfaction, as low and high LMX teachers reporting high P-O fit did not differ on this
dependent variable. This suggests that for career satisfaction, a high degree of congruence with
the values of the organization may ameliorate the negative effects typically associated with low
LMX status. The expected moderating effect of LMX on the relation between P-O fit and
organizational commitment was not supported, possibly due to the strong main effect for LMX.

The results have theoretical implications both for the LMX and culture/P-O fit literatures. The
integration of LMX with culture represents a response to the call for research on the interaction
of LMX with contextual variables in the explanation of outcomes (Dunegan, Duchon, & Uhl-
Bien, 1992; Liden et al., 1997; Yukl, 2002). Relatively little research explored how situations
influence the dynamics of the LMX process. We chose P-O fit for inclusion in the current
investigation due to its broad coverage of many characteristics of organizational situations.
Although LMX research has provided theoretical rationale for research on P-O fit (Vancouver &
Schmitt, 1991), we are not aware of any studies that have integrated measures of LMX and P-O
fit. Results of the current study extend LMX theory by demonstrating that for job and career
satisfaction, fit with the organization can compensate for poor LMX relationships. Results also
enhance the P-O fit literature through the integration of LMX. In the current study, high LMX
individuals with low P-O fit were more satisfied with their jobs and careers than were low LMX
individuals with low P-O fit. These results are salient because they suggest that the effects of
poor fit with the organization on job and career satisfaction are reduced for individuals who have
established a healthy relationship with the immediate superior.

Our investigation has contributed to the LMX and P-O fit literatures by demonstrating the way in
which LMX and fit interact to influence job and career satisfaction. This result suggests promise
in examining the interaction between LMX and P-O fit with respect to other outcome variables,
as well as extending the P-O fit literature through the integration of research on social exchange
relationships.

REFERENCES AVAILABLE FROM THE AUTHOR
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