Leader Member Exchange

1. Leader Member Exchange

2. Leader Member Exchange Theory (LMX) • Leadership asprocess • Centered on interactions between leaders and followers • Relationship between leaders and followers the focal point. • Focus also on possible differences between leaders and followers • Leaders cannot treat all followers the same

3. LMX • Two kinds of follower relationships • In groups – based on expanded and negotiated role responsibilities • Followers go far beyond their formal job description • Leader in turn does more for these followers • Out groups– based on the formal employment contract • Followers not interested in taking on new and different job responsibilities.

4. S S S S S S S S S S S S S Subordinate Leader Member Exchange • In-Group • more information, influence, confidence & concern from Leader • more dependable, highly involved & communicative than out-group Out-Group In-Group Leader • Out-Group • less compatible with Leader • usually just come to work, do their job & go home

5. LMX (Gerstner & Day, 1997) • High quality leader member exchanges produce: • less employee turnover • more positive performance evaluations • higher frequency of promotions • greater organizational commitment • more desirable work assignments • better job attitudes • more attention and support from the leader • greater participation • faster career progress over 25 years • When leaders and followers have good exchanges, they feel better, accomplish more, and the organization prospers.

6. LMX

7. Stranger • Interactions within the leader-subordinate dyad are generally rule bound • Rely on contractual relationships • Relate to each other within prescribed organizational roles • Experience lower quality exchanges • Motives of subordinate directed toward self-interest rather than good of the group

8. Acquaintance • Begins with an “offer” by leader/subordinate for improved career-oriented social exchanges • Testing period for both, assessing whether • the subordinate is interested in taking on new roles • leader is willing to provide new challenges • Shift in dyad from formalized interactions to new ways of relating • Quality of exchanges improve along with greater trust & respect • Less focus on self-interest, more on goals of the group

9. Mature Partnership • Marked by high-quality leader-member exchanges • Experience high degree of mutual trust, respect, and obligation toward each other • Tested relationship and found it dependable • High degree of reciprocity between leaders and subordinates • May depend on each other for favors and special assistance • Highly developed patterns of relating that produce positive outcomes for both themselves & the organization

10. Leader Member Exchange Strengths • Makes sense by describing work in terms of those who contribute more and those who do the bare minimum. • Unique because it is the only theory to identify the dyadic relationship. Effective leader member exchanges are important • Notes the importance of communication in leadership • Reminds leaders to be fair about who they let into the in group – this is based on work performance not race, sex, ethnicity, religion, etc • Large amount of research supports this theory

11. Leader Member Exchange Criticisms • On the surface this theory doesn’t seem “fair” • Does not treat everyone equally. • Can support the development of privileged groups in the work place. • Fails to explain how high quality exchanges are created • Scant research uses dyadic measures to analyze the LMX process