By: Christopher Boyne
Many leadership theories either focus on the leader or the followers, and few incorporate both viewpoints. Leader-member exchange theory is unique in that the main focus of the theory is on the interactions between the leader and followers (Northouse, 2013, p. 161). This is an important theory to study when examining leadership because it shows that the interactions with a leader can be different for followers, and not every leader-follower exchange is the same.
In earlier research studies on this theory, researchers found that a vertical dyadic relationship between the leader and their followers exists. This involves the leader and a specific group of followers. Within this dyadic relationship, a working relationship is developed, where “…exchanges between the leader and subordinate define their dyadic relationship” (Northouse, 2013, p. 162). Through these early studies, researchers found that there were two distinct relationships that the leader forms with their followers called the in-group or the out-group. The in-group included individuals who had “…expanded and negotiated role responsibilities….” Individuals who have a relationship with their leader that is only based on the formal employment contract are part of the out-group (Northouse, 2013, p. 163).
In later studies, researchers analyzed whether “…leader-member exchange was related to organizational effectiveness” (PSU WC Lesson 8, 2014, p. 4). High quality leader-member exchanges resulted in better employee evaluations, less turnover, better job attitudes, and more organizational commitment (PSU WC Lesson 8, 2014, p. 4). These exchanges could be thought of as interactions between the leader and in-group. The exchanges, which resulted in followers only doing what is required of them, and not being given special attention, would describe the interactions between the leader and the out-group (PSU WC Lesson 8, 2014, p. 5). Leader-member exchange is an important and useful theory to use when examining leadership within the workplace, and this theory can be applied to the vallet staff at a four star resort in Los Angeles.
Tom is a 23-year-old valet manager at a resort, and has 15 valet attendants that work under him. Tom has worked at the resort for the last four years and was recently promoted to manager and has ten close friends that have also worked at the resort for multiple years. There is a group of five valet attendants who were just hired for the busy summer months, and they are much older than Tom and the other young valet attendants. Most of the employees have noticed that only the young group of valet attendants go out to the bar near the hotel after work, or participate in other non-work related events, while the new group of older valet attendants do not participate in any non-work activities and simply do the jobs they are asked to perform, but nothing more. Leader-member exchange theory can be applied to this situation in that this theory specifically examines the interactions between different followers and their leader.
Tom’s friends that are around his same age and have worked with him for years seem to get preferential treatment in terms of scheduling, and Tom often enables them to choose their own schedules, whereas the new group of older valet attendants often have to work the unwanted shifts. Tom’s employees who get this treatment and have a relationship with Tom that extends beyond work are considered part of the in-group. The new employees who are older are considered part of the out-group because they only have a relationship with Tom based on the formal employment contract (PSU WC Lesson 8, 2014, p. 3).
When examining the employment history of the valet department, its is obvious that when a younger valet is hired and develops a personal relationship with Tom and the in-group of young valets, there has shown to be a low rate of turnover, high performance evaluations, better jobs attitudes, more support from management and greater sense of organizational commitment. This can be described as high-quality leader-member exchanges, which are beneficial for the organization (PSU WC Lesson 8, 2014, p. 4).
The in-group and high quality leader-member exchanges are important to analyze when examining this theory because there must be an in-group for an out-group to exist. The challenge that organizations are faced with is trying to make every interaction between leaders and followers a high quality leader-member exchange. Some followers simply do not want to be part of the in-group, but as studies have shown, if followers are happy with their leaders, they do good work, and if leaders are happy with the followers, then they are rewarded (PSU WC Lesson 8, 2014, p. 4).
References
Northouse, P.G. (2013). Leadership: theory and practice. Los Angeles: Sage Publications
Pennsylvania State University World Campus. (2014). PSYCH 485 lesson 8 Leader-member exchange theory. Retrieved from https://courses.worldcampus.psu.edu/sp14/psych485/001/content/08_lesson/01_page.html