Previous research suggests that affiliative humor is constructive while aggressive humor is destructive. However, this assumption warrants reconsideration, as employees may interpret their leader’s humor differently depending on the relational context. This paper explores the role of the relational context in humor processing, explicitly examining how leader-member exchange (LMX) moderates the effects of leader affiliative and aggressive humor on employee emotional exhaustion through the lens of employee authentic living. By integrating cognitive dissonance theory (CDT) and the framework of organizational authenticity, we conducted a time-lagged field study (N=618) and two experiments (N=132 and N=138) to test our hypotheses. Specifically, we found that when LMX was low (high), leader affiliative (aggressive) humor led to more employee emotional exhaustion through decreased employee authentic living. Our findings provide valuable insights for leaders and organizations, highlighting the importance of understanding the relational context in determining the effectiveness of leader humor and the significant role of employees’ authentic living in this process.
