Leader and Follower Psychological Capital Effects 1 Running Head ...

Leader and Follower Psychological Capital Effects 1 Running Head: Leader and Follower Psychological Capital Effects

AN INVESTIGATION OF THE RELATIONSHIPS BETWEEN LEADER AND FOLLOWER PSYCHOLOGICAL CAPITAL, SERVICE CLIMATE AND JOB PERFORMANCE

FRED O. WALUMBWA* SUZANNE J. PETERSON Arizona State University BRUCE J. AVOLIO University of Washington CHAD A. HARTNELL Arizona State University

*Address Correspondence to: Fred O. Walumbwa Department of Management W.P. Carey School of Business Arizona State University Tempe, AZ 85287-4006 Phone: 602-543-6240 Email: [email protected]

Personnel Psychology (in press)

Author Acknowledgements: We thank the Action Editor, Frederick Morgeson and three anonymous reviewers for their insightful comments and suggestions regarding this manuscript. All remaining errors are ours.

Leader and Follower Psychological Capital Effects 2 Abstract Using a sample of 79 police leaders and their direct reports (264 police followers), this study investigated the relationships of leader and follower psychological capital, service climate, and job performance. Hierarchical linear modeling (HLM) results revealed that leader psychological capital was positively related to follower performance, with this relationship mediated by follower psychological capital. We also found that the follower psychological capitalperformance relationship was moderated by service climate such that the relationship was stronger when service climate was perceived to be high versus low. Finally, exploratory HLM analyses indicated that leader and follower psychological capital interacted to positively predict rated performance. We discuss implications of these findings, limitations, and directions for future research.

Key words. Psychological capital, positive leadership, climate, job performance, police organizations

Leader and Follower Psychological Capital Effects 3 Research on positive forms of leadership has received increasing attention in the past decade (Avolio & Luthans, 2006; Ehrhart, 2004; Gardner, Avolio, Luthans, May, & Walumbwa, 2005; Hess & Cameron, 2005; Ilies, Morgeson, & Nahrgang, 2005; Yammarino, Dionne, Schriesheim, & Dansereau, 2008). A rise in interest in these positive forms of leadership is due in part to mounting evidence supporting the central role of positivity in enhancing human wellbeing and performance at work (Avolio, Gardner, Walumbwa, Luthans, & May, 2004; Avolio & Walumbwa, 2006; Cameron, Dutton, & Quinn, 2003; Fredrickson, 2009; Luthans, Avolio, Avey, & Norman, 2007; Peterson & Seligman, 2004). For example, initial research (e.g., Liden, Wayne, Zhao, & Henderson, 2008; Peterson, Walumbwa, Byron, & Myrowitz, 2009; Walumbwa, Hartnell, & Oke, in press; Walumbwa, Luthans, Avey, & Oke, 2009) suggests that leaders who possess a variety of positive states or traits, goals, values, and character strengths are able to positively influence followers’ states, behavior, and performance. With the increasing attention being focused on positivity in the workplace and its documented effects, it is important to understand what predicts employee positivity and how employee positivity relates to performance. This knowledge will not only contribute to theory building in the areas associated with positive leadership, but will also help organizations to build effective policies and practices for enhancing employee positivity. Avolio and Luthans (2006) among other authors specifically suggested that to better understand the dynamics of the leadership process, research must examine how the leader’s influence is mediated through the followers they work with over time. Further, because research has yet to systematically examine the context in which employee positivity relates to their performance, we still know relatively little about when employee positivity is more or less likely to enhance performance. Accordingly the first objective of the present study was to extend previous research by

Leader and Follower Psychological Capital Effects 4 examining the process through which a leader’s level of positive psychological capital (Luthans & Avolio, 2003) predicts their followers’ job performance. Psychological capital is defined as “one’s positive appraisal of circumstances and probability for success based on motivated effort and perseverance” (Luthans et al., 2007, p. 550). Researchers (e.g., Avolio et al., 2004; Avolio & Luthans, 2006) have suggested that one key mechanism through which leaders’ psychological capital may influence their followers’ job performance is through followers’ psychological capital. Because leaders are frequently described by followers as role models, when followers perceive their leaders as behaving positively, we expect those followers to behave in a similarly positive fashion in an attempt to emulate their leaders (Avolio & Walumbwa, 2006; Ibarra, 1999; Peterson & Seligman, 2004; Yammarinno et al., 2008). By testing whether leader psychological capital influences follower psychological capital, we elucidate the process through which leader positivity impacts follower performance. In addition, we also aim to provide practical advice regarding the importance of leaders modeling positivity for followers. We know from prior research that positive psychological capital fosters positive work outcomes and also reduces counterproductive work behaviors (Avey, Luthans, & Youssef, 2009; Luthans et al., 2007; Walumbwa et al., 2009). To date, however, research has yet to examine potential boundary conditions that serve to either promote or impede the positive effects of employee psychological capital on performance. As Hackman (2009) observes in his critique of prior psychological capital research, “I look forward to further empirical work on the conditions that most powerfully foster and sustain positive states at work” (p. 321). Climate, such as service climate (Schneider, Salvaggio, & Subirats, 2002), may constitute a potent moderator of the relationship between employees’ psychological capital and their performance because service climate signals to employees what the group values (i.e., customer service) (Liao & Chuang,

Leader and Follower Psychological Capital Effects 5 2007; Schneider, Ehrhart, Mayer, Saltz, & Niles-Jolly, 2005). In the present study, we begin to address Hackman’s challenge to research on psychological capital by focusing on the moderating effect of service climate, which we define as employees’ collective perceptions of the policies, practices, and procedures that are rewarded, supported, and expected concerning customer service (Schneider et al., 2002). Thus, our second objective was to examine the cross-level moderating effect of service climate by targeting the relationship between employees’ psychological capital and their performance. By focusing on service climate as a cross-level moderator, we add to the emerging theoretical and empirical research on psychological capital by highlighting the importance of incorporating situational or contextual factors and, in doing so, help broaden psychological capital theory and practical utility in terms of enhancing service performance. Our third and final objective was to begin to examine how leader and follower psychological capital interact to predict performance. In particular, an exploratory aspect of our study focused on examining whether leader positivity provided a more or less optimal context for the effects of follower positivity on their performance. Although prior leadership research has been frequently criticized for not taking a more integrative view of theory building and research (Avolio, 2007), including an interactive perspective, scant research has examined whether leadership is a more or less optimal context for the effect of followers’ positivity on their performance. Our exploratory analysis aims to address this gap in the literature. If the degree to which follower positivity is associated with performance varies as a function of leader positivity, then organizations should consider psychological capital development at multiple levels, taking into account both followers and their immediate supervisors.

Leader and Follower Psychological Capital Effects 6 Theory and Hypothesis Development Psychological Capital Psychological capital represents an individual’s positive psychological state of development that is characterized by four psychological resources: efficacy (confidence to take on and put in the necessary effort to succeed at challenging tasks), hope (one’s ability to persevere toward a goal), optimism (a positive expectation about succeeding now and in the future), and resilience (being able to sustain and bounce back to attain success when beset by problems and adversity) (Luthans et al., 2007). A key distinguishing factor between psychological capital and other positive core constructs that already exist in the organizational literature is that psychological capital is conceptualized to be state-like and open to development, differentiating it from the more fixed, trait-like constructs such as core self-evaluations. In support, Luthans and his colleagues (e.g., Avey et al., 2009; Luthans et al., 2007) have provided initial evidence suggesting that psychological capital is distinct from core self-evaluations, positive affectivity, and the “Big Five” personality traits. Evidence regarding the discriminant validity of psychological capital with respect to core self-evaluations and the “Big Five” personality traits is particularly important because each has been associated with a variety of positive employee behaviors including performance (e.g., Bono & Colbert, 2005; Kacmar, Collins, Harris, & Judge, 2009; Judge, Bono, Ilies, & Werner, 2002). Although the four psychological capital dimensions have each received considerable research attention in the psychological literature, recent theory and empirical research suggests that combining these four resources into a core construct results in a common synergistic capacity or resource. For example, Stajkovic (2006) argued, “that the four constructs share a common confidence core that exists at a higher level of abstraction” (p. 1212). In line with this

Leader and Follower Psychological Capital Effects 7 argument, Luthans, Avolio, Walumbwa, and Li (2005) pointed out that although being optimistic may certainly help with one’s motivation and performance, it is not as powerful as combining optimism with hope, resilience and/or efficacy. Thus, consistent with recent theoretical and empirical evidence (Luthans et al., 2007), we examine psychological capital as a higher order construct comprised of the four positive resources of hope, optimism, efficacy, and resilience. From Leader Psychological Capital to Follower Psychological Capital Recently, researchers have suggested that psychological capital may play an important role in explaining the leader-follower relationship and how followers subsequently behave (e.g., Avolio & Luthans, 2006; Luthans & Avolio, 2003; Walumbwa et al., 2009). Not only should leaders who score higher in psychological capital display more positive attitudes and higher performance themselves, but such leaders should also serve as role models for followers by displaying higher levels of positivity about their work. According to Bandura’s (1977) social learning cognitive theory, individuals learn by attending to and observing the behavior of credible role models. In organizations, supervisors often have higher status and power than their followers, and thus, are influential sources of information to employees regarding what behavior is important and appropriate to potentially model. Therefore, to the extent that followers respect their supervisors’ status and performance within the organization, they will be more likely to emulate their leader’s behavior to attain similarly positive behavioral outcomes (Bandura, 1977). With respect to psychological capital, leaders who are more hopeful tend to set more alternative goals, are highly motivated to achieve those goals, and find ways around obstacles to goal achievement (Peterson et al., 2009). Similarly, leaders who are efficacious, optimistic, and resilient put forth the effort and persistence needed to succeed, tend to have positive expectations about their environment, and bounce back from adversity or failure. As followers observe the

Leader and Follower Psychological Capital Effects 8 combined positive impact of these four resources in action, they are more likely to emulate the behaviors associated with their leader’s psychological capital. Specifically, we would expect followers to mimic their supervisors’ behavior such that the positive supervisor states are transferred to their followers (Yammarino et al., 2008). This transfer may occur through the process of emotional contagion whereby positivity displayed by leaders may ‘rub off’ on followers (e.g., O'Neill, Harrison, Cleveland, Almeida, Stawski, & Crouter, 2009; Sy, Côté, & Saavedra, 2005). Supporting the link between leader and follower emotion, Bono and Ilies (2006) found that leaders’ positive emotional expressions were positively associated with follower moods, concluding that the leader’s behavior is a salient source of information that can influence followers’ perceived psychological resources. Therefore, in this study, we suggest that leaders exhibiting higher levels of psychological capital act as attractive and credible role models for followers to imitate these positive states/behaviors (Bandura, 1977). Specifically, leaders who report having higher levels of efficacy, hope, optimism, and resilience would be expected to ‘transfer’ those levels to followers, by serving as exemplary guides to their followers’ behavior (Ibarra, 1999). We examine this possibility in this study and propose the following hypothesis: Hypothesis 1: Leader psychological capital positively relates to follower psychological capital. Follower Psychological Capital and Job Performance Research has generally supported a positive relationship between psychological capital and performance (Avey et al., 2009; Luthans et al., 2007; Walumbwa et al., 2009). The positive relationship between psychological capital and performance is explained by suggesting that when the four facets of efficacy, hope, optimism, and resilience combine to form an individual’s

Leader and Follower Psychological Capital Effects 9 level of psychological capital, they trigger a synergistic agentic capacity considered to be critical to goal accomplishment, motivation, success and resulting performance (Stajkovic, 2006). Support for this combined agentic capacity can be found in psychological resource theories (see Hobfoll, 2002). Hobfoll posits that psychological resources have support synergies that operate between and within the various components, creating higher-order ‘resource caravans’ or in this case, psychological capital. Similarly, Fredrickson (2001) in her broaden-and-build theory of individual potential suggests that higher levels of positivity will contribute to maintaining higher levels of individual motivation and performance. Fredrickson makes this assertion based on the assumption that higher levels of positivity can ‘build’ an individual’s intellectual, physical, social, and psychological resources to help them cope with and address varying challenges in work situations, thereby enhancing their performance. Thus, based on theory and past research, individuals who score higher in psychological capital can be expected to put forth extra effort and perseverance based on greater confidence (efficacy), more willpower and energy to generate multiple solutions to problems or goal blockages (hope), will be more likely to voice positive expectations about results (optimism), and will respond more positively to adversity and setbacks (resilience). In other words, higher levels of psychological capital should facilitate a stronger motivational force aimed at the successful accomplishment of goals and tasks, which should lead to desired performance outcomes. Thus, we expect psychological capital comprising efficacy, hope, optimism, and resilience to improve follower performance by enhancing an individual’s overall motivation and perseverance. We propose the following hypothesis: Hypothesis 2: Follower psychological capital positively relates to their job performance. Extending previous research on psychological capital and following the logic of

Leader and Follower Psychological Capital Effects 10 Hypotheses 1 and 2 above, we examined leader psychological capital as a more distal predictor of followers’ job performance. We believe that leader psychological capital is likely to play a role in followers’ performance by enhancing their psychological capital reservoir (Walumbwa et al., 2009; Yammarino et al., 2008). By affecting follower psychological capital, leader psychological capital behavior becomes an indirect antecedent of followers’ job performance. Supporting this argument, Carmeli, Ben-Hador, Waldman, and Rupp (2009) examined how leader relational behavior cultivates social capital, reporting that employees’ social capital played a significant role on how relational leadership subsequently predicted employee job performance. Similarly, Walumbwa et al. (2009) found that employee psychological capital served as a potential mediator in the relationship between leaders described as authentic and performance. Based on these findings, we expect employees’ psychological capital to serve as a mediator of the relationship between leader psychological capital and employee job performance. We therefore propose the following hypothesis: Hypothesis 3: Follower psychological capital mediates the positive relationship between leader psychological capital and follower job performance. Follower Psychological Capital, Service Climate, and Performance Although narrow measures of climate show a direct effect with specific performance outcomes (Carr, Schmidt, Ford, & DeShon, 2003), we argue that service climate has broader and direct utility within service organizations because customer service is an implicit facet of an individual’s performance. In the most general sense, most sales employees’ performance is typically evaluated based on customers’ satisfaction with their service. For example, a common performance evaluation measure for healthcare professionals is the patient experience or level of satisfaction. Similarly, hospitality employees’ performance is commonly assessed based on

Leader and Follower Psychological Capital Effects 11 ‘guest’ comments regarding their service. Police officers or firefighters, in a similar manner, provide service to their communities and society by competently enforcing the law and positively engaging with their constituents. Part of the motivation for embedding police officers in neighborhoods through community outreach or locating neighborhood precincts has been to develop a more positive relationship with their constituents. This is because police officers, fire fighters and other service professionals are seen by their constituents as being an important part of their satisfaction with living in their communities. Also, when these service professionals perform exemplary service, they are often rewarded with medals, promotions, salary increments, etc. In contrast, when they fail to serve their community in a satisfactory manner, they are often publicly reprimanded or punished. Given these examples, we expand the literature’s traditional definition of customer service performance to include the extent to which service professionals competently carry out their jobs (i.e., delivering the expected or beyond expected levels of service), a more germane evaluation of customer service performance in the context of police organizations. Service climates are seen as being an integral source of information to employees by elucidating what behavior is desirable, expected, and rewarded (Schneider et al., 2005). Thus, positive service climate is likely to provide specific, positive cues to employees that direct their attention toward achieving superior service performance. For instance, service goals such as building positive customer relationships and providing excellent customer service, are salient in a high service climate. In support Liao and Chuang (2007) investigated and found that service employees thrived in a service-oriented environment that promoted higher quality service to clients and customers. Thus, employees in a positive service climate are more likely to focus their effort in attaining those outcomes by being cognizant of how they perform their duties such

Leader and Follower Psychological Capital Effects 12 that they deliver or exceed the expected level of service. Employees with high psychological capital are more likely to persist in their effort to enhance performance in a positive service climate because they believe they have the ability and desire to meet their customers’ as well as their colleagues’ expectations. Further, employees in a positive service climate would be expected to aim to attain high performance standards to reinforce and contribute to the positive psychological environment that the service climate imbues. Consequently, a positive service climate should motivate employees with high levels of psychological capital to perform their duties with excellent service because the cues from their work group would signal that such behavior is both meaningful and valuable to both the unit and to its external customers. Conversely, when service climates are low, employees are less likely to attain high performance standards because the social context provides either negative or ambiguous cues that would inform employees about what they shouldn’t do or how they should behave. When expectations are more negative or unclear, employees may either reduce their effort or behave in a manner that they expect will be rewarded, which could run counter to meeting customer expectations. Although employees with high psychological capital may still exert effort to improve their performance, they may be less likely to be recognized or rewarded as being high performers. Therefore, we argue that employees’ psychological capital would interact with the positive service climate to amplify individual job performance. Although we are not aware of any prior research that has examined the interaction between follower psychological capital and service climate in predicting follower performance, one recent study is relevant in supporting our proposition. Walumbwa et al. (in press), using data from multinational companies operating in Kenya, reported that a positive service climate

Leader and Follower Psychological Capital Effects 13 moderated the relationship between employee commitment to the supervisor and organizational citizenship behavior. Specifically, they found that positive service climate enhanced the individual-level influence of commitment to the supervisor on citizenship behaviors exhibited by employees. Therefore, because climate signals the valued behavior desired from employees and what typically gets rewarded (Schneider et al., 2005), we expect a positive service climate to strengthen the relationship between followers’ psychological capital and their performance. We propose the following hypothesis: Hypothesis 4: Service climate moderates the influence of follower psychological capital on their performance, such that the influence of follower psychological capital is more positive when service climate is high than when service climate is low. In addition to the above cross-level moderating effect of positive service climate (Hypothesis 4), we also explored the interactive effects of leader and follower psychological capital in predicting follower performance. For example, one could argue that the follower psychological capital-performance relationship is moderated by the leader’s psychological capital, such that when both leaders and followers have positive psychological capital, performance is higher (i.e., a cross-level interaction). Such a cross-level interaction would suggest that leader psychological capital behavior constitutes a contextual enhancer that further strengthens the positive effect of follower psychological capital on their performance. The basis for this exploratory analysis comes from earlier work that has shown that group leaders may help shape followers’ attitudes through recurring practices that translate formal policies and procedures (Zohar, 2000). Wang and Walumbwa (2007), using a sample of employees from China, Kenya, and Thailand examined how transformational leadership behavior shapes followers’ reactions to family-friendly policies, and how these responses relate to followers’

Leader and Follower Psychological Capital Effects 14 attitudes and behaviors. Providing evidence of the potential moderating effect of leadership, Wang and Walumbwa found that transformational leadership positively moderated the relationships between employee perceptions of family-friendly policies and both organizational commitment and work withdrawal. Specifically, the relationship was more positive for organizational commitment and more negative for work withdrawal when supervisors demonstrated more transformational leadership behaviors. Additional support for exploring this research question comes from social exchange theory (Blau, 1964). According to social exchange theory (Blau 1964), leaders and followers who each exhibit more psychological capital would be more likely to reciprocate by displaying further positive resources that in turn would enhance performance. This is because leaders who create and encourage positive exchanges with their followers would also encourage followers to express themselves openly in interactions with their leader resulting in more energy and commitment (Avolio & Luthans, 2006). Thus, there is reason to suspect that the relationship between follower psychological capital and their performance is likely to be stronger when they have leaders who rate themselves higher on psychological capital. We examined this potential cross-level interaction in an exploratory fashion. Research question: Does leader psychological capital influence the relationship between follower psychological capital and their performance? Figure 1 summarizes the relationships tested in this study. In general, we propose that leader psychological capital positively influences follower individual performance and does so by enhancing follower psychological capital. We also test the cross-level influence of service climate in the relationship between follower psychological capital and their performance. Finally and as indicated by the dotted line in Figure 1, we explore the cross-level interaction between

Leader and Follower Psychological Capital Effects 15 follower and leader psychological capital in predicting follower performance. -----------------------------------------Insert Figure 1 about here -----------------------------------------Method Participants and Procedures Participants for this study were police officers from a large metropolitan city in the southwestern United States. Prior research has emphasized the importance of positive leadership when leading in pervasive crises—a context particularly germane to the police organization (Fredrickson, 2009). Therefore, we believe that the police organization setting provides a dynamic context for the study of psychological capital, especially how leader and followers’ psychological capital relates to performance. Data were collected from leaders (i.e., lieutenants) and their direct followers (i.e., sergeants). To be included in the study, a leader had to satisfy at least two criteria: (1) he or she had to have at least three of his or her direct reports rate his or her leadership behavior (for internal training and development) and (2) the leader had to complete a measure assessing his or her psychological capital and later provide an assessment of their direct reports’ job performance. Of the 105 identified, 79 volunteered to participate in this study representing approximately 75% effective participation rate. All surveys were completed on-line during regular work hours. The leader averaged 44 years of age and had been with the police force on average 10.2 years, and all had at least two years of college education. Ninety percent were males. Seventy four percent of the leaders were white Caucasians, 12% Hispanics, 6% Blacks, and 8% others. Ninety-four percent of participants were males and had on average 2 years of

Leader and Follower Psychological Capital Effects 16 college education. We contacted a total of 338 followers (sergeants) and 264 completed the surveys, yielding a 78% response rate. The names of the sergeants were provided by their respective leaders (3-5 followers per leader). The followers’ average age was 31 years, with an average tenure of approximately 6 years. Sixty eighty percent of the followers were Caucasians, 16% Hispanics, and 16% other. Eighty one percent of participants were males and at least 91% had at least an equivalent of a community college diploma. Time 1: Psychological capital. Both leaders and followers received an email containing a cover letter from the researchers and endorsed by the Police Chief. The cover letter explained the purpose of the study and provided assurances of the participants’ confidentiality. As an incentive to participate, participants were informed that they would receive a timely feedback report on their leadership behavior as part of an ongoing effort by the police organization to develop leadership within its ranks. This feedback session was held after all data collection was completed. Participants were given a measure that evaluated their own level of psychological capital. The psychological capital measure assessed the extent to which participants (i.e., police officers) exhibited efficacy, hope, optimism, and resilience. They also provided personal information such as age, sex, tenure, race, etc. Participants were told they would be receiving another short survey in approximately six weeks (performance evaluations to be completed by leaders and service climate to be completed by followers). Participants were assigned a random number to be used as identification and matching purposes for data to be collected at a later time. Time 2: Service climate. Each follower was asked to evaluate the service climate of their respective work group.

Leader and Follower Psychological Capital Effects 17 Time 3: Supervisor rated job performance. Approximately two weeks after Time 2 data were coded, each leader rated at least 3 followers’ (3-5) job performance. The job performance measure assessed how well followers performed in working with their patrol officers, as well as in fulfilling their respective job duties. We were able to obtain performance ratings from all the 79 leaders contacted, representing a 100% response rate. Measures Psychological capital. We used a modified version of the recently validated psychological capital questionnaire (PCQ; Luthans et al., 2007). Each dimension was represented by four or five of the most relevant items for the police context based on discussions with the client organization. The result was a 19-item Likert-type survey from the original 24 items. Participants were instructed to indicate their degree of agreement from 1 (strongly disagree) to 5 (strongly agree) for each item. Sample items included: (1) Efficacy: “I feel confident in representing my work area in meetings with management”, and “I feel confident helping to set targets/goals in my work area”; (2) Hope: “Right now I see myself as being pretty successful at work”, and “If I should find myself in a jam at work, I could think of many ways to get out of it”; (3) Resilience: “When I have a setback at work, I have trouble recovering from it, moving on (R)”, and “I usually take stressful things at work in stride”; and (4) Optimism: “ I always look on the bright side of things regarding my job”, and “If something can go wrong for me work-wise, it will (R)”. The internal consistency reliability (alpha) estimate for the composite psychological capital was .75 for leaders and .88 for followers. Although we used only 19 items, our overall scale reliability is comparable to that reported by Luthans et al. (2007). Because our hypotheses were concerned with the leader’s level of psychological capital in a general sense, and not its specific manifestations, we collapsed the four dimensions of

Leader and Follower Psychological Capital Effects 18 efficacy, hope, optimism, and resilience into a single construct as suggested by Stajkovic (2006). This strategy has both theoretical and empirical support. Law, Wong, and Mobley (1998) noted that because latent models are defined in terms of the commonality among the dimensions, there has to be evidence that the dimensions are correlated to justify the summing of component dimensions into a single overall representation of those dimensions. In this study, the average correlation among the four dimensions was .58 and .61 for leaders and followers, respectively. We further examined the dimensionality of the construct by conducting a principle axis factor analysis with varimax rotation. This analysis obtained a one-factor solution in which all 19 items had high loadings on the single factor. The factor explained 65% and 69% of the total variance in the items for followers and leaders, respectively. These results and the single measures high reliability suggests that the psychological capital items used in this study form a reliable scale. Service climate. Service climate (α = .80) was measured with a 5-item scale developed by Schneider, White, and Paul (1998). The items asked followers to respond to each question based on what they have personally observed in their work group (1 = poor, 5 = excellent). Sample items are, “How would you rate the job knowledge and skills of employees in your workgroup to deliver superior quality work and service?” and “How would you rate efforts to measure and track the quality of the work and service in your workgroup?” Because service climate is formed through bottom-up emergent processes (Liao & Chuang, 2007; Schneider et al., 1998), we used the referent-shift consensus approach (e.g., Chan, 1998) to aggregate followers’ scores of service climate to the work group level represented by each leader. We computed the internal consistency reliability estimate for service climate at the work group level and the internal consistency estimate was .85. We further assessed both between-group differences and within-group agreement, using two intra-class correlations (ICCs)

Leader and Follower Psychological Capital Effects 19 (e.g., Bliese, 2000) and rwg (e.g., James, Demaree, & Wolf, 1984). The ICC (1) was .39 and ICC (2) was .71 (p