This study examines the impact of leadership efficacy on workgroup performance by expanding the current framework of leader-member exchange (LMX) to include leader-group interactions. The tangible and intangible leader-controlled resources cited in LMX literature are explored as possible antecedents for the generation of employees' rational and emotional commitment towards leadership and the resulting levels of employee discretionary effort. Using employee engagement as a measure, data were collected from a mid-sized pharmaceutical plant and analyzed by comparing employee commitment levels towards the leader and employee discretionary effort at the department level. Using the proposed framework set forth in this study makes it possible to determine the impact LMX has at the group or department level and which type of leader-controlled resources exert the greatest influence on employee discretionary effort. Analysis revealed that employees working in those departments with higher levels of emotional commitment had higher levels of employee discretionary effort. The conclusion drawn from this study is that department leaders with employees who exhibit higher levels of emotional commitment may be more effective in applying intangible resources (i.e., those that influence emotional feelings) than leaders in departments with employees who exhibit lower levels of emotional commitment.