Idiosyncratic deals leader-member exchange and employee performance among selected information communication technology companies in Kampala, Uganda

Abstract

In the ICT sector, one of the challenges to organizational performance is traced to low levels of employee performance. Organizations have taken up the granting of customized work conditions to meet individual work preferences in form of idiosyncratic deals (I-deals) in a bid to improve employee performance. Empirical research has confirmed the positive relationship between Idiosyncratic deals and employee performance, and yet the situation among ICT companies in Uganda has remained persistent, even with the granting of these I-deals. This study therefore sought to investigate the effect of Leader-member exchange quality on the relationship between idiosyncratic deals and employee performance. The specific objectives of the study are to examine the effect of; financial Idiosyncratic deals, flexibility Idiosyncratic deals, development Idiosyncratic deals, and task and responsibilities idiosyncratic deals on employee performance as well as to examine the moderating role of Leader-Member exchange quality on the relationship between Financial, Flexibility, and Tasks and Responsibility Idiosyncratic deals and employee performance among staff in ICT companies in Uganda. The theoretical underpinning of the study is built on the I-deals theory, LMX theory, Social Exchange Theory, and the Tasks and Contextual Performance Model. The study used a Positivism philosophy and an explanatory research design. The target population was 680 employees and the study sample was 325 respondents determined using systematic sampling techniques. Quantitative data was collected using a questionnaire and Hierarchical Multiple regression analysis was done to test the hypotheses of the study. The findings revealed that all the direct effects of Financial (β 1 = 0.085, p< 0.05), flexibility (β 2 = 0.259, p <0.05), development (β 3 = 0.377, p< 0.05), and tasks idiosyncratic deals (β 4 = 0.140, p< 0.05), on employee performance were positive and significant. LMX quality significantly moderated the relationship between Development Idiosyncratic deals and employee performance (β= 0.085; ρ= 0.004). The moderating effects of LMX quality on the relationships between Financial (β= -0.005, ρ= 0.839), Flexibility (β = -0.030, ρ=0.210), and tasks (β= 0.060, p= .083) idiosyncratic deals and employee performance were not statistically significant. This means that LMX quality is mostly needed when negotiating development idiosyncratic deals for improved performance. The study recommends that managers of organisations grant customized work conditions to employees so as to meet the unique needs of individuals, and develop interpersonal and leadership skills to enable the building of good quality LMX relationships and ultimately, customized employee development opportunities and employee performance to thrive. The study contributes to the existing literature on Idiosyncratic deals, Leader-Member Exchange quality, and Employee performance. The study also extended the I-deals, Social Exchange, and LMX theories, as well as the Tasks and Contextual Performance Model and informs policy and practice in the ICT sector in Uganda.