Overqualified leaders and team performance : a social exchange perspective

Abstract

Overqualification—an employment status in which the qualifications of individuals exceed their job requirements—is an increasingly pervasive phenomenon. The literature to date has focused predominantly on rank-and-file employees, although leaders are in fact more vulnerable to overqualification. Moreover, scholars have concentrated primarily on the task characteristics of overqualification and its effects on the focal individual. However, overqualification also has social implications, especially for leaders. Overqualified individuals cannot receive performance opportunities commensurate with their qualifications from their organization. Thus, overqualification indicates that the norms of reciprocity are violated in the social exchange between the individual and the organization. As leaders serve as linking pins in organizations, those who are overqualified may be less motivated to reciprocate by fulfilling their primary job responsibilities, such as team development. Furthermore, the unfavorable exchange between leaders and their organizations may affect the relationships between leaders and their teams, as the consequences of an exchange relationship with one party have been shown to influence exchanges with other parties. Thus, drawing from social exchange theory, I develop a theoretical model to examine how overqualified leaders affect team performance through the intervening role of team social exchange. Overqualification may first affect the average level of leader-member exchange that a leader develops with the whole team (LMX mean), as overqualified leaders may distance themselves from the team. At the same time, overqualified leaders may differently treat each team member (LMX differentiation) as the sense of resource loss and status consciousness resulting from overqualification increases their sensitivity to employees’ qualifications. Thus, leader overqualification produces decreased LMX mean and increased LMX differentiation. Furthermore, I propose that LMX mean affects task-oriented outcomes (i.e., task performance and creative performance). In contrast, LMX differentiation may have complicated curvilinear effects on relationship-oriented outcomes (i.e., interpersonal organizational citizenship behavior and counterproductive work behavior). Finally, leaders’ jobs and tasks are embedded in another important social relationship with their superiors, known as leader–leader exchange (LLX). High-quality LLX is a crucial resource for elevating an individual’s social standing. Thus, in this study, LLX is included as an interpersonal factor that alleviates the adverse influences of leader overqualification on team dynamics and outcomes. The proposed team-level moderated mediation model is examined using multi-source and multi-wave surveys. The final sample consists of 72 teams from two organizations in northern China. The results suggest that although leader overqualification is not significantly related to LMX mean, LLX moderates the relationship between leader overqualification and LMX mean such that leader overqualification has a stronger negative effect on LMX mean for leaders with low LLX. LMX mean is significantly related to two task-oriented outcomes. LLX moderates the indirect relationship between leader overqualification and two task-oriented outcomes via LMX mean. In addition, leader overqualification is found to be positively associated with LMX differentiation, which has a curvilinear relationship with two relationship-oriented outcomes. LLX does not moderate the relationship between leader overqualification and LMX differentiation. The theoretical and managerial implications are discussed.