Are you really doing good things in your boss's eyes? Interactive effects of employee innovative work behavior and leader–member exchange on supervisory performance ratings

Organizations increasingly depend on employee efforts to innovate. However, the quality of relationships between leaders and employees may affect the recognition that employees receive for their innovative work behaviors. Drawing from a social cognition perspective, we tested a model in which leader–member exchange (LMX) moderates the impact of employee innovative work behavior on supervisory ratings of employee performance. Results from two multisource studies combining self, colleague, and supervisor ratings consistently showed that employees receive more favorable performance ratings by engaging in innovative work behavior when they have high‐quality LMX relationships. Moreover, we found that this interactive relationship was mediated by leader perceptions of innovative employee efforts, providing support for a moderated mediation model. Implications for the literatures on performance appraisal, LMX, and innovation are discussed.     

The cross‐cultural study of LMX and individual employee voice: The moderating role of conflict avoidance

This article examines the role of national culture, measured by conflict avoidance, on the relationship between leader–member exchange (LMX) and individual employee voice. Using data collected from automotive industry employees in the United States and Korea, the findings show that conflict avoidance is negatively related to employee voice and also moderates the relationship between LMX and employee voice in the Korean sample. In particular, the relationship between LMX and voice becomes less positive when conflict avoidance is high. On the other hand, conflict avoidance does not have a direct effect on employee voice as well as an interactive effect with LMX on employee voice in the U.S. sample. This study, therefore, highlights the importance of the national culture in the comparative study of employee voice.     

The role of assessment centers in job satisfaction and organizational commitment: a case of the Korean government

While many studies have shown how assessment centers affect employees’ career success or job performance, these studies do not demonstrate how employees’ attitudes are affected by their perception of assessment centers. This study aims to investigate the influence of employees’ perception of assessment centers on their job satisfaction and organizational commitment, which are the key elements in predicting working behaviors, such as job performance, job involvement, and turnover intentions. To analyze the nature of the influence, 306 employees who had been evaluated by an assessment center in the Korean Rural Development Administration (KRDA) were surveyed. Regression analysis revealed that although there is no influence on their organizational commitment, employees with a positive perception of assessment centers experience higher levels of job satisfaction (p < .01). These results suggest that the positive perception of assessment centers affects the general feeling of organizational members about their work even though it does not affect their emotional attachment to the organization or dedication to organizational values. Thus, assessment centers can be used as a tool not only to select capable candidates but also to yield positive effects on organizational members’ job attitudes.     

Measuring Inflation Anchoring and Uncertainty: A U.S. and Euro Area Comparison

We use several U.S. and euro‐area surveys of professional forecasters to estimate a dynamic factor model of inflation featuring time‐varying uncertainty. We obtain survey‐consistent distributions of future inflation at any horizon, both in the U.S. and the euro area. Equipped with this model, we propose a novel measure of the anchoring of inflation expectations that accounts for inflation uncertainty. Our results suggest that following the Great Recession, inflation anchoring improved in the United States, while mild de‐anchoring occurred in the euro area. As of our sample end, both areas appear to be almost equally anchored.     

Investor behaviour and reaching for yield: Evidence from the sterling corporate bond market

We provide evidence on how corporate bond investors react to a change in yields, and how this behaviour differs in times of market‐wide stress. We also investigate ‘reaching for yield’ across investor types, as well as providing insights into the structure of the corporate bond market. Using proprietary sterling corporate bond transaction data, we show that insurance companies, hedge funds and asset managers are typically net buyers when corporate bond yields rise. Dealer banks clear the market by being net sellers. However, we find evidence for this behaviour reversing in times of stress for some investors. During the 2013 ‘taper tantrum’, asset managers were net sellers of corporate bonds in response to a sharp rise in yields, potentially amplifying price changes. At the same time, dealer banks were net buyers. Finally, we provide evidence that insurers, hedge funds and asset managers tilt their portfolios towards higher risk bonds, consistent with ‘reaching for yield’ behaviour.     

Close relationship with the supervisor may impede employee creativity by suppressing vertical task conflict

Leader‐member exchange as a form of supportive leadership is expected to foster employee creativity. However, empirical evidence suggested this relationship is complex. This study attempts to address this complexity by proposing and testing a curvilinear mechanism, which attenuates the overall positive effect of LMX on creativity by transmitting a curvilinear indirect effect via vertical task conflict. Results drawn from a sample of 276 supervisor–subordinate dyads provided support for the hypothesized curvilinear indirect effect. Specifically, LMX was found to negatively influence employee creativity by suppressing vertical task conflict for subordinates in high‐quality LMX relationships, while the indirect effect was not significant for subordinates in low‐quality LMX relationships.     

State‐Dependent Forward Guidance and the Problem of Inconsistent Announcements

Forward guidance can be provided as an unconditional promise, i.e. commitment to a specific low policy rate. Alternatively, the promise may include an escape clause, i.e. a condition defining the state of the economy under which the central bank would not keep such a low rate and, instead, it would revert to setting policy under discretion. The escape clause can be expressed as a threshold in terms of a specific variable. The present paper shows that, when such a threshold is expressed in terms of an endogenous variable (e.g. output, inflation), there are cases where it becomes impossible for the central bank to act in a way that is consistent with its promise. Consistency imposes limits on the policy rate that can be set since reverting immediately to the optimal discretionary rate can be incompatible with exceeding the threshold.