With a frown or a smile: How leader affective states spark the leader‐follower reciprocal exchange process

Abstract Despite evidence that affect shapes perceptions of workplace relationships, the role of affect in the reciprocal exchange process of leader–member exchange (LMX) theory is often overlooked. We argue that this is likely due to a continued focus on global assessments of LMX quality, rather than examination of the reciprocal, interlocked actions and reactions that take place daily between members of the dyad. A leader's affective state may indeed spark this reciprocal exchange process on a daily level and ultimately shape the state of the leader–follower relationship. In this study, we integrate LMX theory and emotions‐as‐social‐information (EASI) theory to examine how the leader's negative and positive affective states uniquely contribute to the reciprocal exchange process. In doing so, we advance understanding of the distinction of state LMX as well as the unique process for leader's negative affective state within the reciprocal exchange process. Using a 15‐day experience sampling methodology study of 76 leader–follower dyads, we find that a leader's positive and negative affective states transmit effects along the affective and inferential paths posited in EASI theory to influence follower performance on a daily basis. Interestingly, a leader's positive affective state is stronger along the affective path and a leader's negative affective state is stronger along the inferential path. We also find that leaders reciprocate the daily shift in follower performance with OCBI directed toward the follower. Finally, as expected, the reciprocal exchange process alters state LMX (leader rated).