Leader–member exchange (LMX) theory
Leader-member exchange (LMX) theory examines the dynamics between leaders and their subordinates, highlighting that interactions are not uniform across all relationships. Developed in the 1970s by researchers including George B. Graen and Mary Uhl-Bien, LMX theory identifies the varying quality of exchanges between leaders and team members, which range from high-quality relationships characterized by trust and mutual respect to low-quality exchanges marked by a lack of engagement and support. The theory unfolds in three developmental stages: role-taking, where new members are assessed; role-making, where initial collaboration begins and members are often categorized into in-groups and out-groups; and routinization, where established patterns of interaction solidify.
High-quality exchanges tend to foster professional growth and provide opportunities for advancement, while low-quality exchanges can limit engagement and development for those in the out-group. The theory underscores the importance of leaders recognizing their unconscious biases in sorting team members and encourages efforts to build stronger relationships with all employees, particularly those in the out-group. By acknowledging and addressing these dynamics, managers can enhance team morale and productivity, fostering a more inclusive workplace environment.
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Leader–member exchange (LMX) theory
Leader-member exchange (LMX) theory is based on the observation that leaders behave differently with various people who work for them. The leader-member exchange model, or vertical dyad linkage theory, charts the relationships between leaders and subordinates.
A great deal of management study has taken place in the United States. Many of the most influential research projects took place in American industry during the early to mid-twentieth century. By the 1970s and early 1980s, as foreign competition in the auto and technology industries increased and corporate takeovers became increasingly common, American ideas about management were challenged.
Background
Studies of management and leadership date to the late nineteenth century. Interest in management was mostly based on economics and efficiency. An efficient operation was likely to result in financial success; therefore, industries became interested in how to achieve this state. They wanted to know the qualities of good leadership—what makes a good boss—to improve efficiency and profits. Early efforts to study management and leadership tried to examine the workplace from a scientific perspective. Management, it was determined, should find the most efficient means to complete a task and convey this to the workers. The workers were expected to work as hard as they could to complete as much work as possible because maximum output meant maximum profit. Their input into the work process, however, was not seen as important.
During the 1920s and 1930s, industry began to focus on the human relations of work. Several studies found that the relationships leaders and workers had with one another were also an important factor in productivity. Specifically, a relationship in which workers were free to share their input about tasks and processes, and felt their input was valued, resulted in increased productivity.
Some of the most influential work began during the 1950s. A series of studies at Michigan University detailed critical characteristics of effective leaders. Tasks performed by effective leaders include planning and organizing; their relationships with subordinates should be supportive and helpful, and allow workers room to complete their tasks; and effective leaders use a participative style, which allows them to work equally well managing individuals and groups and building teams that work in harmony. Studies at Ohio State University found that effective leadership requires consideration, or friendly and supportive approaches to subordinates, as well as development of structure and definitions of roles of the leader and workers in achieving objectives. The work Mary Parker Follett had conducted during the 1920s also drew new attention. Follett had advocated a cooperative supervisor-worker relationship, which suited 1950s society.
Despite the evidence showing that worker involvement correlates with productivity, many major corporations and organizations, including General Motors and the United Automobile Workers labor union, shunned these ideas. In the years after World War II (1939–45), however, social classes in the United States were becoming less pronounced. The traditional boss-worker employment relationship was also less common.
Overview
LMX theory arose during the 1970s. American psychologist George B. Graen, professor of management Mary Uhl-Bien, and other researchers initially developed the theory. Research involved studies on work socialization and vertical dyad linkage (VDL). Vertical refers to the position of a leader above a subordinate; dyad refers to the focus on two people; and linkage refers to interrelated actions between them. This model shows the interactions between the leader and their subordinates, and indicates these exchange relationships are not the same with each worker. Work socialization theory explains the process of an individual learning a workplace culture, including how to relate to authority in an organization.
Early VDL studies found that multiple workers described the same manager in different ways. Their relationships covered a wide spectrum, from interactions of mutual trust, respect, and obligation (high-quality exchanges) to low trust, respect, and obligation (low-quality exchanges). High-quality exchanges often allowed subordinates to grow beyond their job descriptions, while low-quality exchanges often involved subordinates who simply did work they were required to do. These study results led researchers to more closely examine leader-member exchange.
LMX looks at how these relationships develop and how they affect performance. The three stages of relationship development are role-taking, role-making, and routinization. Role-taking occurs when an individual joins a group. This is a time of assessing the person's abilities and skills. Role-making takes place when members start to work together on projects. New members are expected to work hard to prove themselves, and managers begin to sort them into groups: the in group and the out group. This sorting may be unconscious. The in group comprises the loyal and trustworthy individuals who have the skills to do the work. Managers rely on this group and give its members most of their attention, including support and advice, as well as interesting opportunities. Members of the in group may share traits with the manager. Managers put people who do not meet expectations, are not regarded as reliable, or who lack the necessary skills into the out group. Managers rarely offer interesting challenges or opportunities for advancement to those in the out group. The third stage, routinization, is when the interactions between managers and team members become set.
Once team members have been sorted into the in group and out group, managers establish their interactions with them. The manager relies on the in group and spends little time encouraging or supporting members of the out group. Those in the out group rarely have a chance to move into the in group. An out group worker's only chance for advancement may be to leave the team, either by transferring to a new department or leaving the organization completely.
Managers can improve their effectiveness by being aware of the tendency to sort workers and recognizing which workers they have placed in each group. Managers should re-examine the workers in the out group in particular. Reflect on each worker—for example, why is this individual in the out group? Was it a specific event, or series of events? Was it due to actions at work such as poor interpersonal skills or a quick temper? Does this individual have the skills necessary, but lacks motivation? As a manager, is the perception of this worker in line with the facts?
Acknowledging one's unconscious sorting of workers offers a manager the opportunity to improve relationships. As the leader, a manager should try to foster a better relationship with those in the out group. Managers may also be able to offer coaching to out group members. By interacting with them one on one, a manager may boost morale of the whole team. This may also increase productivity.
Bibliography
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