With pressures to focus on activities that lead to profit optimization, leaders in organizations are left with little time to give attention to peripheral activities, such as developing relationships with their staff beyond the traditional boss/employee contract. The scenario looks like this: leader directs and treats each employee the same and in turn, most employees do only what is necessary to get the job done to earn money for that work, and go home with little emotional connection to their leader or the organization. A few employees will make the initiative to take on more responsibilities by going above and beyond what is expected (Northouse, 2013, pg. 163). In turn, the leader will reciprocate by sharing more information and showing more consideration and concern for those employees. The key here is that this occurs through the employee’s initiative.
However, studies in Leader-Member Exchange Theory (LMX) have proven that leaders need to go beyond the basic exchange explained above, in order to dev
elop employees who are dedicated to the organization, perform at higher levels, achieve promotions, and are given better work assignments (PSU WC, 2015, L. 8, p. 3). According to the LMX Theory this occurs through the one-on-one interactions between the leader and follower in which a reciprocal relationship is developed. In the end, these relationships can lead to content, motivated and dedicated employees. The key however, is the shift of initiative from the employee, to the leader.
How is this achieved? Through relationship building. According to PSU WC (2015, L. 8, p. 6), “leaders should have high-quality relationships with most followers, not just a few.” In order to achieve this, the leader must engage with each employee individually with the goal of making the employee feel like an integral and valued part of the team and greater organization. This happens in steps. Initially, the leader and new employee will start out as strangers. Through offers of “career-oriented social exchanges” (Northouse, 2013, p. 167) by either party, they enter the acquaintance phase. Through relationship testing, when both leader and employee find they can trust each other, they have reached the final phase, mature partnership. It is important to know, attempts at relationship building will not work for every employee. Some employees will be happy to remain in the stranger phase; they do not have the need for connection and only wish to do their job and go home.
When considering the use of this strategy, most leaders will ask, who has time for this? And, while it is a valid concern, when considering the alternative, it will begin to emerge as a necessary strategy. Without a relationship focus, job dissatisfaction and high employee turnover results. In their paper, Jordan and Troth (2011), cited meta-analyses of LMX in which Gerstner and Day “found significant relationships between LMX and job performance, and other variables related to satisfaction and turnover intention.” Considerations for the indirect costs of employee turnover, according to Croucher, Wood, Brewster, and Brookes (2011) are lost production, reduced team performance, the need for remaining team members to work over-time and, the potential loss of team morale. In addition, Iverson, as cited by Croucher et al. (2011) points out the costs and time required to recruit new employees as well as the costs of training in order to bring a new employee to job proficiency.
As a leader who is pressured to constantly be cognizant of the bottom line, from the LMX Theory perspective, it is evident that the time and energy spent focusing attention toward developing mature partnerships with each employee can fend off the monetary costs incurred recruiting and training a replacement employee, as well as losses suffered through failed performance of the team. All costs which would be incurred through the loss of unengaged and uninspired employees.
References:
Croucher, R., Wood, G., Brewster, C., & Brookes, M. (2011) Employee Turnover, HRM and Institutional Contexts. Economic and Industrial Democracy, 33(4), 605–620. doi: 10.1177/0143831X11424768 eid.sagepub.com
Jordan, P. J., & Troth, A. (2011). Emotional intelligence and leader member exchange. Leadership & Organization Development Journal, 32(3), 260-280. doi:http://dx.doi.org/10.1108/01437731111123915
Northouse, P.G. (2013). Leadership Theory and Practice. Los Angeles: SAGE Publications, Inc.
Pennsylvania State University World Campus (2015). PSYCH 485 Lesson 8: Leader-Member Exchange Theory (LMX). Retrieved from https://psu.instructure.com/courses/1486679/modules/items/15963858
This was a very informative post focusing on both sides of the LMX theory. Unfortunately, this theory does require leaders to pay a lot of attention and time to their employees. However, this attention and time typically causes an increase in motivation, performance, trust, and employee satisfaction.
In today’s work culture, people are becoming increasingly emotionally involved into their work for the reasons of finding purpose, developmental opportunities, identity, and responsibility. Therefore, attentive managers and dedicated “in-group” subordinates are necessary for success within an organization. A low turn-over rate, effective work environment, and quality workers are easily worth the time managers should put into creating positive work relationships and unbiased judgments.
You’re spot on with your analysis; I’ve witnessed your examples firsthand!
Each organization does, at its foundation, focus towards a profit maximization (whatever that may be). The individuals who are willing to take on additional tasks put themselves in the leader spotlight, and mark the beginnings of a valuable LMX relationship. It is at this point that each leader must choose their path. The path on the right leader, still focused on the most optimal outcome, allows the remainder of employees to fall to the wayside. These employees feel disconnected and the polarized groups form. The leader wonders to themselves how they will ever get a team packed full of the superstars that have emerged. The path on the left leader, on the other hand, recognizes that the “emergent superstars” are naturally occurring and that, while their contributions are valuable, the remaining employees have value too. This leader possesses the foresight required to ensure the profitability of the organization in the long run. They allow the superstars to shine and begin to develop relationships with the others. Peripheral activities are more profit directed than their face-value!
Great post! I really appreciate your elaboration on leader- vs. employee-initiated relationships. It’s so easy for a leader to “pass the buck” on to the employee to prove themselves valuable of extra attention. While I completely understand this and the fact that their time is extremely valuable, what better investment than mentoring those who can support you in return?
For example, I administer and analyze employee surveys at one of my jobs. Recently, we conducted a survey that was specifically looking at employee engagement ratings by each of their group leaders. The trends were very clear: those who were most satisfied followed up with comments such as “He always takes time to ask how I’m doing” or “She makes sure to answer all of my questions when she gives me a new task.” These leaders, who are consistently rated higher in terms of direction, communication, and accountability, are benefiting directly through nurturing their relationships with their subordinates. They’ve found a way to make everyone a part of the “in-group.”