This study investigates the impact of leader-member exchange (LMX) on envy in the workplace and the subsequent effects of envy on work engagement and socially undermining behavior. In addition, the moderating roles of personality traits, such as self-esteem and neuroticism, are examined in this relationship. Paired questionnaires were personally collected from 245 subordinates and 82 of their immediate supervisors. Empirical analysis of the responses revealed: (a) the quality of LMX is negatively related to employee envy in the workplace, (b) employee envy mediates the relationship between LMX and work engagement, (c) self-esteem boosts the relationship between envy and work engagement, but decreases the relationship between envy and social undermining, and (d) neuroticism exacerbates the relationship between envy and social undermining.