Transforming Workforce Dynamics: The Power of Leader–Member Exchange (LMXQ) Quality in Health Care

This study examines the impact of leader–member exchange (LMXQ) quality on key employee outcomes in the service sector, focusing on job involvement, employee empowerment, and employee retention. This work also explores the moderating role of service climate in the relationships between employee empowerment and retention and between job involvement and retention, particularly within the service context. Grounded in leader–member exchange theory, which emphasizes the quality of leader–subordinate relationships as a critical determinant of organizational effectiveness, this research adopts a quantitative approach. Data were collected from employees in Pakistan’s health care sector and analyzed using structural equation modeling (SEM). The results reveal that high-quality LMX significantly enhances employee empowerment and job involvement, which in turn positively influence employee retention. However, the moderating effect of service climate on these relationships was found to be nonsignificant. The findings offer valuable insights for human resource and organizational leaders in developing economies, highlighting the importance of fostering supportive leadership relationships to enhance employee engagement and retention. This study contributes to the literature by providing empirical evidence from a developing country perspective and clarifying the limited moderating role of service climate in the LMX–employee outcomes framework.