THE INFLUENCE OF LEADER MEMBER EXCHANGE TOWARD WORK ENGAGEMENT AND EMPLOYEE PERFORMANCE

THE INFLUENCE OF LEADER MEMBER EXCHANGE TOWARD WORK ENGAGEMENT AND EMPLOYEE PERFORMANCE I Ketut Sudarnaya¹, I Wayan Gede Supartha², I Gede Riana², I Made Artha Wibawa². 1Doctoral Program of Management, Faculty of Economics and Business, Udayana University, Indonesia 2Departement of Management Faculty of Economics and Business, Udayana University, Indonesia Received: 11.03.2020 Revised: 12.04.2020 Accepted: 28.05.2020 Abstract Employee performance is one of the factors that play an important role in achieving organizational and individual goals. This study aims to investigate the relationship of leader member-exchange (LMX) in the values of Tat Tvam Asi, on work engagement and employee performance. This study uses quantitative approach, which leads to empirical rational principles with explanatory research. The population of this study are all of full time employees of Village-Owned Enterprises (VOEs) in Bali, with a total sample of 229 employees, analyzed using XSTAT-PLS. The results showed that LMX has a positive and significant influence on work engagement and employee performance, as well as work engagement has a positive and significant influence on employee performance. The theoretical implications of this study have been able to build a theoretical model of the relationship between leaders and subordinates in the values of Tat Tvam Asi. The practical implications it can provide more understandings the role of local values practices by leaders and subordinates in enhancing employee performance. Based on the results, theoretical implications for human resource management and recommendations for further research are discussed. Keyword: Leader Member-Exchange (LMX), Work Engagement, Employee Performance