From a social hierarchy perspective, leader-member exchange differentiation (LMXD) establishes an informal hierarchical structure within a team, where team members maintain varying relationship qualities with their leaders and occupy different positions accordingly. Given that legitimacy is regarded as a fundamental attribute that shapes individuals’ responses to social hierarchy, how team members construct their perceptions of legitimacy concerning LMXD can significantly impact their behaviors within a team. Integrating legitimacy literature and team norm research, this paper examines team members’ evaluation of LMXD legitimacy and their subsequent behavioral responses. Specifically, we propose that LMXD has an inverted U-shaped relationship with perceived LMXD legitimacy (i.e., the extent to which team members perceive that their peers' LMXs are aligned with their contributions to the team), which further enhances employees’ in-role performance and interpersonal helping. Furthermore, we expect that the curvilinear effect of LMXD is moderated by leader group prototypicality. Results from a field study largely support our hypotheses. We found an inverted U-shaped relationship between LMXD and perceived LMXD legitimacy, which then mediated the curvilinear effect of LMXD on team members’ in-role performance but not on interpersonal helping. Additionally, the upward trend of the hypothesized inverted U-shaped curve was stronger when leader group prototypical was high (vs. low) while the downward trend was stronger when leader group prototypicality was low (vs. high). Theoretical implications and future research directions are discussed.
