Due to social comparison in the team, leader-member exchange (LMX) differentiation has been shown to play a crucial role for explaining follower outcomes. LMX differentiation may be beneficial for some followers, but also detrimental for others, when perceived as unfair. In order to understand the impact of LMX differentiation on work-related outcomes, LMX differentiation should be described by three properties (relative LMX position, LMX variability, and team-level LMX). The aim of the study is to focus on LMX differentiation and test relationships between different properties of LMX and followers’ psychological strain. In sum, 75 teams with 322 followers answered an online survey about their leaders’ LMX and their individual levels of psychological strain. Results of multilevel modeling showed that the relative LMX position was negatively related to psychological strain on the individual level. This relation was moderated by LMX variability and team-level LMX. However, we did not find significant relations between team-level LMX and team-level psychological strain. The present study extends previous research by looking at relations between LMX and psychological strain on an individual follower level as well as on the team level. Our results suggest that the relative position of LMX within a team seems to play a crucial role for individual follower psychological strain. Results imply that leaders should aim to improve LMX relationships within their team and to reduce differences between team members. Leadership trainings should impart knowledge and skills to improve LMX quality and include elements about LMX differentiation, its origins, as well as consequences.

This article is published in the Journal "Current Psychology" (2024).