Being the lowest level of government after Federal and State governments, local governments are considered as the managers of urban environment due to their multifarious services functions which drives the economic growth and social development of a particular district. The heterogeneous services provided are constantly being reviewed and appraised by the public where statistics from Public Complaint Bureau showed worrying numbers with high number of complaints being recorded for four consecutive years ending 2012. Hence, the goal of this study is to analyse the impact of leader-member exchange (LMX) and organizational citizenship behaviour (OCB) on job satisfaction using 212 respondents from local governments’ employees in east coast Malaysia. The findings showed that LMX and OCB were predictors towards job satisfaction with LMX being the strongest predictor compared to OCB. Mean differences on job satisfaction, LMX and OCB according to selected demographic variables revealed significant mean differences were noted in service group for LMX and dyadic tenure for OCB. Based on these findings, nurturing quality relationship and promoting the occurrence of OCB among local government employees are warranted as empirical evidence proved that they are important ingredients in provoking employees’ job satisfaction.
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