Leader-member exchange theory (LMX) can be likened to cliques in high school, where there is the “in” crowd and the “out” crowd. According to Northouse (2013), LMX involves employees becoming part of an “in” group, or an “out” group depending upon their relationship with the leader, their personality, and their willingness to take on an expanded role to benefit the group (pp. 167-168). After college, I took a customer service position with an insurance company in Dallas and moved from Pennsylvania to Texas. This experience reminded me of leader-member exchange theory, and how the leader-follower relationship can evolve, especially when there is a management change.
The two groups that LMX theory recognizes are based upon the relationship and interaction between the leaders and the subordinates. The in group is characterized by a high quality of LMX, whereas the out group is characterized by low LMX and mediocre results The benefits of the in group include subordinates initiating an expanded role beyond the basic job, reciprocal attention from the leader, and a higher of promotions linked to better performance reviews. The out group experiences formal communication, but little, if any reciprocity or initiative and is primarily self-serving (Gupta, 2009).
When I interviewed for my new job, the supervisor explained that the company was in a management transition and they were trying to elevate the level of professionalism and knowledge available in the customer service area. She had been at the company for one month, and I was going to be her first new hire. All of the existing people on her team were high school graduates that had been working for the company a minimum of ten years and she wanted to start transitioning to college graduates. When I started, I did not have any insurance experience and was eager to learn. Because I was also young and single, I was able to stay late and take on additional projects outside the normal course and scope of my customer service duties. Within three months, I received my first property and casualty certification and I volunteered to put together a formal training manual. Through the entire process, I questioned the workflow of two other departments to gain a better understanding and was assigned to a special project to help re-vamp the underwriting process because of some suggestions and observations that I made. This activity was consistent with high quality of LMX theory because it advanced my personal goals, as well as the goals of my supervisor and the organization as a whole (Northouse, 2013, p. 169).
Without knowing it, my enthusiasm and efforts put me at an advantage in the leader-member exchange, but at a disadvantage with my co-workers. I very quickly became a member of the “in” group with our boss, while my coworkers became the “out” group, and I was also not on their list of favorites either because I was told that I was making them look bad. While they all performed their job duties, there was absolutely no attempt to improve the team or our organization. I agree with Northouse’s (2013) description that out group members act differently in that they only do their set jobs descriptions, or the bare minimum, without ever looking how to expand their role. When the clock struck 4:30, headsets were disconnected and most of the original team was out the door. While these employees may not seem to be ideal, I believe that the original management culture fostered the behavior, and there was little motivation to be proactive, as promotions were not something given to the original group. The job itself was secure and provided a good salary and benefits; so changing the culture was very difficult without hiring new people.
As our supervisor hired more new people, the original staff was transferred to other areas within the company. The new staff were all hired by my supervisor and trained by me, so it became easier to transition the expectations of the group. Overall, this led to fewer departmental complaints from consumers and our CEO actually received some letters commending us for our help and professionalism.
Looking back at this relationship, I wanted to gain a better understanding of how LMX theory actually applied to this situation and quantify it. I rated my supervisor utilizing the LMX 7 Questionnaire and my results were high, 27, indicating a higher quality leader-member exchange (Northouse, 2013, pp. 180-181). This confirmed my initial notion that I was indeed was a part of the in crowd with my boss. My behaviors and the positive nature of our relationship reinforced the notion that a high quality LMX had positive outcomes.
After a year, I ended up leaving the company because I realized that while I like working in insurance, I did not like working in customer service. I was able to gain a ton of knowledge through my initiative that prepared me for a successful career in the industry. Overall, I believe that the high quality of LMX helped me to become a better employee and a better manager.
References
Gupta, A. (2009, June 6). Leader Member Exchange Retrieved from http://practical-management.com/Leadership-Development/Leader-Member-Exchange.html
Northouse, P.G. (2013). Leadership: Theory and Practice. Los Angeles: Sage.