‘Distance separates only the bodies, not the minds’ – The effect of the quality of Leader-Member Exchange on the relationship between Physical Distance and Job Satisfaction and Organisational Commitment

Abstract

Recently a Dutch bank/insurance company has decided to stimulate employees to work from their homes half of their work time. Top management raised the question what effect a low frequency of interaction in person between leaders and members has on the job satisfaction and organizational commitment of members. This research expects a moderating effect of the quality of Leader-Member Exchange (LMX) on the relationship between physical distance and job satisfaction and organizational commitment. 557 of the 1096 employees (51%) who received an invitation to participate in the research completed the 43 item questionnaire. After factor analysis and reliability analysis, hypotheses were tested using hierarchical regression analysis. The results show that LMX mediates the negative effect of physical distance on job satisfaction. Job satisfaction turns out to be a partial mediator between LMX and organizational commitment. The most important conclusion of this research is that when leaders and members do not often interact in person, investing in a good relationship quality is more important than in traditional office settings.