The Leader-Member Exchange Theory (LMX) emphasizes the importance of the reciprocal relationship between leaders and each of their followers. Early studies of LMX found that there are two kinds of relationships in work groups: in-groups and out-groups. Employees who get along with the leader and yearn for more responsibilities at work are categorized as in-group. In-group employees benefit from more information, commitment, involvement, and communication. They receive rewards in return for their extra work and more support from the leader. Employees who only satisfy the responsibilities outlined in their employment contracts are put into an out-group. These employees do not get any special treatment; instead, they are trusted less and communicate less with the leader (Northouse, 2013). More recent studies stress that leaders should strive to have in-group relationships with all of their employees, eliminating out-groups, to create more organizational success. This process is called leadership making (Northouse, 2013). However, it may not be possible or desirable to completely eliminate out-groups from the workplace.
There are two reasons why the elimination of out-groups is not possible or desirable. Firstly, some employees may not want to be in an in-group (PSU WC, 2014, L. 8). During the second phase of leadership making, called the acquaintance phase, either the leader or employee initiates a desire to increase the quality of their exchange. Employees can initiate this, looking for leaders who are able to give them more responsibility. Leaders look for individuals who are out-going and enthusiastic, then offer them opportunities to expand their roles in the organization (Northouse, 2013). At this point, if employees have not initiated the process, and deny the leader’s invitation to the in-group, then there is nothing further that can be done. Employees who do not want to be in the in-group have to remain in the out-group, and there are always individuals that only want to do what is required of them, nothing more. Employees cannot be forced to expand their roles. They are getting paid to satisfy the requirements of their employment contract and are not obligated to do more if they do not want the benefits of being in the in-group.
Secondly, the elimination of out-groups would make in-groups the new norm (PSU WC, 2014, L. 8). If it was possible to get every employee in the in-group, then the preferential treatment that in-groups used to get would become how all leaders treat all employees. This would eliminate groups all together, redefine employment contracts, and increase the amount of information shared at an organizational level. Organizations and groups need different levels of employees in order to dictate how relationships are carried out.
According to Northouse (2013), a major criticism of LMX is that it does not take fairness into consideration. The benefit of realizing that leadership making is not entirely possible or desirable is that the fairness issue of LMX would be erased. The leader can try to have a reciprocal relationship with all employees, trying to treat them all fairly, but if they reject, it cannot be said that the leader is being unfair, or preferential. The employee who rejects in the invitation to the in-group has no interest in being treated like the employees in the in-group, thus cannot complain about being treated differently. Fairness is not an issue if some employees do not want the benefits of being in the in-group.
When I was a general manager of a pizza place, I tried to have a high-quality exchange with all my employees. However, given that it was a demanding job paying minimum-wage, many of my employees were not interested in going above their job description, let alone even satisfying that description. These employees did not need extra information, communication, or support from the managers of the company because they simply wanted to come to work, do the minimum that they had to do, and leave. The contrast between these employees and the employees in the in-group led to even higher-quality exchanges with the more motivated, enthusiastic and participative employees. Seeing the preferentially treatment, rewards, and support they received in contrast to what others did not receive motivated them even more. Without having both groups, no one would feel like they were getting treated better in direct relation to how hard they are working. At the restaurant, the existence of both out-groups and in-groups built confidence, security, and satisfaction for those who went above-and-beyond what was outlined in their employment contracts.
References
Northouse, P. G. (2013). Leadership: Theory and practice (6th ed.). Los Angeles: SAGE.
Pennsylvania State University World Campus (2014). Psych 485 Lesson 8: Leader-Member Exchange. Retrieved from https://courses.worldcampus.psu.edu/fa14/psych485/001/content/08_lesson/printlesson.html
I enjoyed reading your post as the removal of out-groups was my first thought while beginning to read about the Leader-Member Exchange Theory. From a leadership standpoint, dealing with the low motivation and low performance of the out-group is very disheartening and the removal of such out-group would alleviate such frustration. Your post goes along with the reading in that you suggest that the removal of the out-group is not possible or desirable. I believe that there may be ways to counter the prevalence of an out-group, remove it to a point, and then restrict its resurgence.
Your first point is that some employees may not want to be in an in-group (PSU WC, 2014, L. 8). I agree with this, as some employees have personality traits in which the may not strive to go above and beyond the expectations of their supervisor. They may also not aspire to be in the in crowd or in-group in a work setting. The fact that they may not socialize is fine, however if I am their supervisor I will demand that they perform to a level that is on par with their peers, regardless of the bare minimums. (Similar to the “Pieces of Flare” scene from Office Space) The withdrawal behavior and negative attitudes that are often held by members of the outgroup are detrimental to both productivity and the workplace as a whole. Once the out-group is identified, I would give them a chance to correct their behavior to be a part of the team. If they continued to operate on a level that is below that of their peers then I would speed up their turnover rate by terminating them.
Your second point is that the elimination of out-groups would make in-groups the new norm (PSU WC, 2014, L. 8). I believe that this could be circumvented by positive re-enforcement of the in-group and the correct use of reward power. To restrict the resurgence of a newly formed out-group, I would work to continue to motivate the workforce with attainable sales goal quotas and bonuses that they would increase productivity to attain. I feel that a motivated individual will remain motivated if they are both challenged and treated well.
In this day an age, I feel that in order for a company to succeed, it must have every employee giving everything they have to offer. To reach success it must streamline by “trimming the fat”. The first employees to go should be the out-group. The negative aspects of the out-group can spread like a virus throughout a workforce and for that reason, it must be eradicated. As out-groups begin to reemerge in the newly formed team, they must be dealt with correctively. If an employee is persistent in being a member of an out-group then it will be for a different employer.
Reference
Northouse, P. G. (2013). Leadership: Theory and practice (6th ed.). Los Angeles: SAGE.
Hi,
Great post, well thought out, I enjoyed reading it. I do however completely disagree with both your “reasons why” and your examples as an explanation for in and out groups (I’m hungry for a burger).
First, I believe that it is possible to eliminate our-groups and I have a perfect example (although maybe an outlier), google! In a recent podcast from the Harvard Business Review (9/25), Eric Schmidt, the Executive Chairman of the company stated that every year, he shared the annual presentations made by and to the google board of directors to all employees – no other company does this. This is non-public information and with over 50,000 people working at the company it would seem easy to have this information leaked to the public, and you know what? In the years that the company has been doing this it has never been leaked. Now I can’t say that is indicative of an elimination of out-group member, it is however, a reflection on a subset of in-group members that encompass the entire company. This idea fits nicely with your second example that the elimination of out-group members would: “redefine employment contracts, and increase the amount of information shared at an organizational level.” What you said is true in the context of google. Is that a bad thing?
It’s also important that you don’t mix out and in-group members with “different levels” of employees as you state. Simply being in an in-group’er doesn’t mean that your level (whether it be staff, manager, director, etc) changes. It simply changes the social contract that you have with your leader (PSU WC, 2014, L. 8). Don’t forget, this is in and out-group between leadership, not the organization. As for employee’s who rejecting the in-group invitation, I foresee places that have strong leadership principles push those workers out.
Finally, the example you give is not very strong because you’re not comparing apples to apples. Being paid minimum wage and giving a minimum wage effort is not the same as being out-of group. If your employees respected you, appreciated your feedback, and cared when you spoke to them, then they were part of the in-group (Northouse, 2013). Not wanting to achieve advancements isn’t necessarily a reflection on their group, however if (as you say) your employees weren’t interested in working to their job descriptions, even after being coached to do so, it could be said that they’re officially out of group. Though it’s not clear from your example if those employees where coached. As for building confidence and security, it’s one thing to always have a person doing worse than you. This helps to know that if anyone got fired it would be them. Yet that would be like comparing yourself to the worst. Sure, it’s OK to say the Jets have more wins the Jacksonville Jaguars, but that would be an accurate reflection of their status when compares to the Patriots. It’s more effective to compare yourself to those above you, regardless of what is happening below you. That way your gauge on performance is inspiring, not reassuring.
References
Green, Sarah (Producer). (2014, September 25) HBR IdeaCast, How Google Manages Talent
Retrieved from http://blogs.hbr.org/2014/09/how-google-manages-talent/
Northouse, P. G. (2013). Leadership: Theory and practice (6th ed.). Los Angeles: SAGE.
Pennsylvania State University World Campus (2014). Psych 485 Lesson 8: Leader-Member Exchange. Retrieved from
https://courses.worldcampus.psu.edu/fa14/psych485/001/content/08_lesson/printlesson.html
I concur with the author of this post that the existence of both the ‘in-group’ and the ‘out-group’ members in a work setting does not necessarily incur the presence of unfairness and discrimination. The criticism on the grounds of a potential difference in a leader’s treatment between the in-group and out-group followers does not endure when we take into account the needs of followers. Some employees satisfy their needs of social belonging, self-esteem, and self-actualization in other areas of life, outside of their job; therefore, they are not willing to accept the in-group status. I would also argue that the relationship between in-group membership and high job performance is questionable. In my job experience, there was a situation when the work performance and job effectiveness of the out-group employees exceeded the performance of the in-group employees. I was the supervisor of a project that involved the design and construction of a shopping mall. I led weekly meetings of all participating parties such as contractors, architects, engineers, and builders. Even though the person who was responsible for the electrical engineering on this project was the out-group member, I still demonstrated my professional respect for him. The person who was in charge of the construction phase was the in-group member because he was my friend. After couple of months working with these two people, meetings with the electrical engineer were more effective and efficient, and his progress on the project was better than with my friend, the builder. During the meeting with the electrical engineer, I focused only on the business issues and I openly criticized the parts of his performance that were not satisfactory. In return, he adjusted his performance to the company’s standards and constantly improved. On the other hand, I wasted my work time during the meetings with the in-group member by chatting about trivia. I always felt uncomfortable to reprimand him for a backlog in his performance. By the end of the project, I was able to speak very bluntly about shortcomings in the construction phase that led to constant verbal fighting with my friend. In short, I found that working with the out-group member was more effective for the company and less emotionally exhausting for me than with the in-group member. Although I cannot draw a conclusion based only on my personal experience, I still consider that out-group members might perform at a higher level and produce a positive outcome for a company.