Before the creation of Leader-Member Exchange Theory (LMX), many thought that leaders treated each follower in a collective way (Northouse, 2018). There were many studies on the leader, follower and situation, but information on the interaction was lacking. Dansereau, Graen, and Haga introduced LMX in 1975. Northouse (2018) explains that Leader-Member Exchange Theory is an approach that conceptualizes leadership as a process that is centered around the interactions between leaders and followers. The focus of the leadership process is the relationship that is developed between the leader and follower. LMX was first described in vertical relationships: the in-group and the out-group.
LMX was originally known as vertical dyad linkage (VDL) theory (Northouse 2018). Early studies established the in-group and out-group of the LMX theory. The in-group followers go above and beyond the their daily activities and take on extra responsibilities (PSU, WC, 2022, L. 8). They tend to be rewarded by the leader through promotions, opportunities and stimulating assignments (Boogaardt, 2020). On the other hand, the out-group follows the formal employment contract and does the minimum requirements, no more or no less than their job entails (PSU, WC, 2022, L. 8). They are not provided with the same promotions and opportunities as the in-group.
The important takeaway from the Leader Member Exchange Theory is the focus of the relationship. Leadership is about relationships and trust between leaders and followers. Followers need to trust their leaders and the leaders also need to be able to trust them. However, trust is earned and needs to be built through a relationship. Being a part of the in-group will secure a way for the leader and follower to build a relationship. Therefore, everyone should strive to be in the in-group. However, some people simply do not want to be a part of the in-group and the paradox is that you can not have an in-group without an out-group.
Boogaart (2020) recommends 4 ways to build stronger relationships with all team members:
- Pay attention to strengths rather than weaknesses
- Hold regular one on one meetings
- Ask Questions
- Actively Solicit Feedback
These tips are for leaders to use on followers to assist in building relationships. While there may always be an out-group, a leader can still continue to build a relationship with them and should strive to improve their relationship with everyone on the team. It is the leader’s responsibility to pull their followers into an in-group and nurture a high quality relationship with them (PSU, WC, 2022, L. 8). This will result in a more positive workplace and higher quality work.
There are many strengths of implementing LMX theory. LMX theory will result in better relationships, improved communication, and overall positive organizational outcomes (Northouse, 2018). Boogaardt (2020) tells that it has been proven that LMX is linked with:
- Increased employee job satisfaction
- Improved employee performance
- Increased and better communication
- Reduced employee turnover
It is important to note that Leader Member Exchange theory has three phases and needs time to progress. Phase 1 is The Stranger Phase. Phase 2 is The Acquaintance Phase and Phase 3 is The Mature Phase. The ultimate goal is to achieve Phase 3. This can be done by being a leader that is pleasant, trusting, agreeable, and cooperative because that is what followers look for in a leader (Northouse, 2018).
Overall, the interaction between a leader and follower is very important. The relationships established can make or break organizations. One should strive to be in the in-group, and it’s critical that a leader nurtures their relationships with their followers. A leader should strive to build good relationships because that is the backbone of team success.
References:
Northouse, P.G. (2018). Leadership: Theory and Practice. 8th Edition. Los Angeles: Sage Publications