Leader-Member Exchange Theory (LMX), first appeared in 1975 developed by Dansereau, Graen, and Haga, seeking to explain leadership through the analysis of relationships between managers and team members (PSU WC, L. 8, 2019). Relationships are developed through leader-follower interactions, constituting the behavioral influence leaders and followers have on one another (Northouse, 2016). This approach is not about what kind of traits leaders have, but rather how the quality of the relationship between leader and subordinate affects job productivity and satisfaction. LMX is the chemistry between leader and follower (PSU WC, L. 8, 2019).
The characteristics of followers define two distinct groups: the in-group and the out-group (Northouse, 2016). The in-group members, as described by Northouse, typically go above and beyond their normal job responsibilities (2016). The out-group members do the minimal amount of work required to complete a task (Northouse, 2016). In contrast, the in-group thrives on challenging new tasks and the out-group shies away from new and different job responsibilities. According to the PSU WC lesson commentary (2019), these follower behaviors influence the type of connection between leader and follower; based on an employee’s aspirations a leader will offer opportunities to achieve higher levels of success, or in the absence of ambition not consider an employee for opportunities. Research has found there is an association between LMX and performance (Graen & Uhl-Bien, 1995; Gerstner & Stilwell, 1993), high-quality leader-member exchanges result in stronger follower commitment and increased satisfaction.
LMX theory also focuses on the development of leader-member relationships over time (Northouse, 2016). Graen & Uhl-Bien (1991) describe this development in three-phases: stranger, acquaintance, and partnership. In the first phase, the exchanges are low-quality because the leader and follower are not familiar with each other’s behaviors and expectations. The follower is focused on self-interests at this time and closely follows the instructions given by the leader. As Northouse (2016) explains in the text, over time, trust develops based on interactions between the leader and follower, expectations of behavior have been established and the relationship has moved to the acquaintance phase. The last phase is achieved when the leader tests this relationship by offering a new challenge to the follower. Finally, if the leader and member establish a healthy acquaintanceship relationship, the leader may test partnership by putting more trust in the member (Northouse, 2016). Partnership relationships are noted by their reciprocal nature, high-quality interactions, and established respect (Northouse, 2016). LMX is an excellent framework for understanding relationships between leaders and followers because it provides both a description of leadership, the existence of in- and out-groups and their effect on the relationship, and a prescription for leadership through relationship testing and building (PSU WC, L. 8, 2019).
The in-group becomes the leader’s go to people for any additional tasks and projects that they need assistance with. It is wonderful to have a leader you get along with and has ultimate confidence in you. While being part of the in-group does require you take on more responsibility, you are also more likely to receive more rewards. These rewards not only take the form of monetary gain but also as a wider range of opportunities. I have been in this position before; I met Peter when I started working at “Company X” he was a co-worker/ peer of mine. This was the “stranger” to “acquaintance” phase of our relationship. I found him to be a nice guy with a great attitude and he was ambitious. One day he was promoted to be the supervisor of our group. I was happy for him, so were others from our group, but not everyone felt that way. There were some who felt Peter wasn’t the best choice for the position. Peter attempted to make peace with these individuals; he tried to gain their confidence and respect. It didn’t work; these out-group members didn’t want to be a part of Peter’s group or plan to improve our processes. The more Peter tried, the more they dug in their heals; this was when Peter started to lean on others in the group for support. Our relationship shifted to the “partnership” phase, as I was part of the in-group he relied on to do the heavy lifting. Regardless of the out-group’s constant complaints about the changes we were making, we completed several projects which lead to improvements in our efficiency. Upper management took notice of our accomplishments and when it came time to report the details of our efforts, Peter trying to be the “nice guy” included the out-group members to receive credit. A few of the out-group members felt guilty and their attitudes towards him softened, but others saw it as an opportunity to do even less.
A criticism of the LMX theory is the in-group can be seen as a clique formed by the leader; this can put the out-group at odds with the leader and in-group(Northouse, 2016). But the reality is, not all out-group want to be a part of the in-group. So how do you get the most out of these individuals? How do you get them to participate? My suggestion would be to apply the psychodynamic theory. To attempt to understand what drives these individuals, once you understand what motivates them, you can tailor your approach to lead them (Northouse, 2016).
Northouse, P. G. (2016). Leadership theory and practice (7th ed.). Los Angeles, CA: Sage.
Pennsylvania State University World Campus. (2019). Lesson 8: Leader-Member Exchange Theory (LMX). PSYCH485: Leadership in Work Settings. Retrieved June 14, 2019, from https://psu.instructure.com/courses/1985970/modules/items/26589530