User talk:Alinenaroditsky/sandbox/leadermemberexchangetheory

Italic text The leader-member exchange (LMX) theory of leadership uniquely focuses on the two-way (dyadic) relationship between leaders and followers. It suggests that leaders develop an exchange with each of their subordinates, and that the quality of these leader-member exchange relationships influences subordinates' responsibility, decisions, and access to resources and performance.[1] Relationships are based on trust and respect and are often emotional relationships that extend beyond the scope of employment.[2] Leader-member exchange may promote positive employment experiences and augment organizational effectiveness.[3] It is widely used by many managers and is replacing many of its predecessors.

Low LMX relationships are characterized by economic exchange based on formally agreed on, immediate, and balanced reciprocation of tangible assets, such as employment contracts focusing on pay for performance (P. M. Blau, 1964). On the other hand, high-LMX relationships increasingly engender feelings of mutual obligation and reciprocity (Gouldner, 1960; Liden, Sparrowe,& Wayne, 1997), which render such relationships more social in nature. - useful information, we might want to explore these more

Tennley, do we have to keep what's already in the article? It's pretty bad and I feel like it would be easier to scrap it and start from scratch

Hey Aline, not sure when you wrote that, but I just copied everything from the existing page into here and put info into the appropriate sections. I did some editing and fixed some citations when possible. I wish there was a way to insert comments like you can do on Word. But I'm not sure how so I will just write some comments here: Yes, you are right, a lot of the stuff in the history section just sucks and/or has no citations but I'm leaving it for now and you can delete it if you want or we can wait to delete it until we have something else to put there or we find the appropriate citations (so we can just let it take up room for now). I don't know about you, but the articles I have read so far haven't had much history info, but if you have read some history stuff then feel free to delete what is in the history section (it is all from the current LMX page) and add what you want. Also, because of the info I took from the current page, there are now 3 sections that have no citations: the 3 stages of LMX, practical applications, and limitations. So obviously that is an issue. We need to either find the appropriate sources or find sources that talk about these topics and fix/re-write the sections. I have some stuff I can use in the practical applications section, and maybe some stuff for limitations. But nothing I have read so far talks about the 3 stages - did any of the sources you found talk about that? I am going to read the paper that talks about LMX and job behaviors so I will add to and cleanup that section.

History Much of what is called Leader-member exchange theory today can be traced back to the introduction of vertical dyad linkage theory (VDL) in 1975. Previous leadership theories had assumed that all subordinates have similar characteristics and that all supervisors behaved in the same fashion with all their subordinates. [4] Gerstner & Day explain that traditional leadership theories attributed leadership effectiveness to personal characteristics of the leader, features of the situation, or an interaction between the two.[5] LMX seeks to provide a different perspective that treats each subordinate/supervisor pair as an individual dyad with its own relationships. According the LMX, the quality of this dyadic relationship predicts attitudinal and behavioral outcomes at the individual, group, and organizational level.[5] In 1976, Graen published “Role-making processes in complex organizations” in the Handbook of Industrial and Organizational Psychology, further increasing awareness about LMX. [6]

By the 1980s, researchers in this field began transitioning from VDL to LMX, with the primary difference being a new focus specifically on jobs and task domains. [4] By the 1990s, LMX was becoming a substantial theory, integrating Organizational citizenship behavior (OCB) and Perceived organizational support (POS). [4] It was becoming increasingly clear that LMX was correlated with job satisfaction and organizational commitment. [5] In 1995 Graen and Uhl-Bien used four stages to explain the evolution of LMX theory. The first stage involved work socialization and vertical dyad linkage and the focus was on the analysis of differentiated dyads, that is, in-groups and out-groups. In the second stage the focus of LMX was on the quality of the leader-member relationship and its outcomes. The third stage involved the creation of a prescriptive approach to building dyadic relationships. In the fourth stage LMX moved beyond the dyad level and was assessed at the systems-level, that is, group and network levels.[5]

Throughout the 2000s and to present-day, Leader-member Exchange Theory has been researched extensively, adding more correlates and processes. LMX is evolving into a theory that crosses dyad-group levels. [4]

LMX theory suggests that group members often separate into subgroups, as some members may have similar interests or personalities. In one of those groups, leaders have special relationships with an inner circle of assistants and advisors, who often get high levels of responsibility and access to resources. This is often called the “in-group,” and their position can come with a price. The other group is known as the “out-group,” and they typically prove to be less motivated or less competent in comparison to the other group. In-group employees are more willing to put in profound efforts, are more committed to task objectives, and share more administrative duties. However, leaders spend more time working with these individuals, value their opinions more than the out-group and also provide them with more resources. In-group members are more likely to report high satisfaction with their role in the group, are less likely to leave the group and are more likely to get promoted than others. They are also expected to be totally committed and loyal to their leader. Conversely, subordinates in the “out-group" are given low levels of choice or influence and put constraints on the leader. Out-group members do what work is necessary in their role, but they contribute less to the group than in-group members. They are less likely to be presented with opportunities to grow and have less challenging work than the individuals of the in-group. The out-group also express less loyalty and support for the leader.

Leader-member exchange does not just define what the exchange between leader and subordinate is, but it also determines what expectations and behaviors the leader will have. Having a good rapport with subordinates is important for the leader because it is through them that the leader reaches the goals of the business.

Psychological research in the theory of LMX has empirically proven its usefulness in understanding group processes. The natural tendency for groups to develop into subgroups and create a clique of an in-group versus an out-group is supported by researcher (Bass, 1990). Those who form the in-group were also found to be more likely to behave in a way that benefits the group. These behaviors include helping other members, supporting changes within the group, and common courtesy[7]. However, the amount of differentiation within a group can vary between groups or organizations. A group may be cleaved into very diverse in-groups or out-groups, while other organizations may be low in differentiation. If a leader can recognize this hierarchy within a group, he or she can improve their relations with their group by minimizing the number of individuals in the out-group (Graen & Uhl-Bien, 1991). Conversely, other research has shown that some differentiation is healthy in a group, as this causes the out-group to recognize that they must work harder to achieve the leader's approval (Liden et al., 2006).

Context

Theory The goal of LMX Theory is to explain the effects of leadership on members, teams, and organizations. According to the theory, leaders form strong trust, emotional, and respect-based relationships with some members of a team, but not with others.[2] LMX theory says that leaders do not treat each subordinate the same. The work-related attitudes and behaviors of those subordinates depend on how they are treated by their leader.[8]

Stages of LMX Soon after a person joins a team and goes through several stages, leader-member relationship are formed. The stages one must go through are as follows:

Role Taking The member joins the team and the leader evaluates his or her abilities and talents. Based on this, the leader may offer opportunities to demonstrate capabilities. This is the stage where a leader is able to gain insight into what areas a member will do best in.

Role Making Role-making according to the Leader-Member Exchange theory expanded role theory beyond the limits of Katz and Kahn’s (1966) “role-taking” which is defined as the process whereby employees accept roles prescribed by their employer and employer’s agent[9]. Graen’s theory hypothesized that particular actor, behavior and context variables increased the probability that employees would form alliances that were instrumental for them, their managers, and coworkers to change their roles. This was different from Graen’s models of Vertical Dyad theory that simply predicted managers would treat their direct employees differently[10]. For example, Leader-Member Exchange theory prescribes that product managers uniquely design their teams for maximum sources of collaboration by proactively fostering unique strategic alliances between the leader and each team member and between each team member before turning to the other big five steps in competing team leadership[11].

In the second phase, the leader and member take part in an unstructured and informal negotiation whereby a role is created for the member and the unspoken promise of benefit and power in return for dedication and loyalty takes place. The theory says that, during this stage, managers sort new team members (often subconsciously) into one of two groups: in-group or out-group. Team members are put into the in-group if they prove to be loyal, trustworthy and skilled. This group is made up of the team members that the manager trusts the most. Managers give this group most of their attention, providing challenging and interesting work, and offering opportunities for additional training and advancement. This group also gets more one-on-one time with the manager. Often, people in this group have a similar personality and work ethic as their manager. Team members are put into the out-group if they betray the manager's trust or prove to be unmotivated or incompetent. This group's work is often restricted and unchallenging. Out-group members tend to have less access to the manager, and often don't receive opportunities for growth or advancement. Trust-building is very important in this stage. Thus, any feelings of betrayal, especially by the leader, can result in the member being demoted to the out-group. This negotiation includes inter-personal relationship factors as well as purely work-related factors. A member who is similar to the leader in various ways is more likely to be put in the in-group, making them more likely to succeed in their job. This perhaps explains why mixed gender relationships are typically less successful than same gender ones. The same effect also applies to cultural and racial differences.

Routinization In this last phase, a pattern of ongoing social exchange between the leader and the member becomes established. Habits and routines are formed in this stage. In-group team members work hard to maintain the good opinion of their managers by showing trust, respect, empathy, patience, and persistence. Out-group members start to dislike or distrust their managers. Because it's so hard to move out of the out-group once the perception has been established, out-group members may have to change departments or organizations in order to "start over." Once team members have been classified, even subconsciously, as in-group or out-group, that classification effects how their managers relate to them from then on, and it can become self-fulfilling. Being a successful member or becoming an in-group member usually includes being similar, in many ways, to the leader. The members work hard at building and sustaining trust and respect from their leader. The members are often empathetic, patient, reasonable, sensitive, and are good at seeing the viewpoint of other people, especially their leader. Characteristics that are often shared by the out-group include aggression, sarcasm and a self-centered view.

Antecedents of LMX Dulebohn et al. identify three primary groups of antecedents: leader characteristics, follower characteristics, and interpersonal relationships.[12] Followers are evaluated by their competence, agreeableness, conscientiousness, extraversion, neuroticism, and openness, positive affectivity, negative affectivity, and locus control.[12] Leaders, on the other hand, are evaluated based on supervisor's expectation of followers, contingent reward behavior, transformational leadership, extraversion, and agreeableness. [12] Although the leader takes a dominant role in creating an LMX relationship, the follower also plays an important part in creating the relationship. Variables that may affect this relationship are perceived similarity, affect/liking, integration, self promotion, assertiveness, and leader trust.[12]

Of the follower characteristics, competence, agreeableness, conscientiousness, extraversion, locus of control, and positive affectivity are all positively correlated with LMX.[12] Negative affectivity and neuroticism are negatively correlated with LMX.[12] All of the listed leader characteristics are positively correlated with LMX.[12] With the exception of assertiveness, all of the interpersonal relationship variable correlated positively with LMX.[12] In an experiment run by Dulebohn et al., leader behaviors and perceptions explained most of the variance.[12] This likely means that it is up to the leader to form the relationships necessary for successful implementation of LMX.

The relationship between these antecedents and LMX are not significantly affected by work setting or the physical location, indicating that they are similar around the world.[12]

Consequences of LMX Whether LMX is successful can be measured by a multitude of consequences. Some of the consequences that can be measured include: turnover intentions, actual turnover, overall organizational citizenship behavior, affective commitment, normative commitment, general job satisfaction, satisfaction with supervisor, satisfaction with pay, procedural justice, distributive justice, empowerment, perceptions of politics, role ambiguity, and role conflict.[12] LMX typically decreases turnover intentions and actual turnover, as well as role ambiguity and role conflict.[12] LMX increases the other measures, particularly increasing perceptual and attitudinal outcomes. [12]

Empirical Results

LMX and Job Behaviors In their 1995 meta-analysis of LMX correlates and constructs, Gerstner & Day explain that research has generally found relationships between LMX and positive work performance and attitude measures, especially for members (as opposed to leaders).[5] That is, especially for members, LMX is associated with higher performance ratings, better objective performance, higher overall satisfaction, more satisfaction with supervisor, stronger organizational commitment, and more positive role perceptions. Gerstner & Day's meta-analysis used 79 studies to examine the correlates of LMX. Their analysis found a positive correlation between the member's perceptions of LMX and the leader's ratings of the member's job performance. It also found an even stronger positive correlation between the leader's perceptions of LMX and the leader's ratings of the member's job performance. Gerstner & Day explain that supervisors may have a tendency to rate a subordinate more favorably due to a positive LMX relationship. This can be a good thing for the subordinate. They further explain that LMX perceptions may cause a leader to form positive or negative expectations about an employee which can then affect actual employee performance rather than only performance ratings. This meta-analysis also found statistically significant positive correlations between LMX and objective performance (as opposed to subjective performance ratings), satisfaction with supervisor, overall satisfaction, organizational commitment, and role clarity. It found statistically significant negative correlations between LMX and role conflict and turnover intentions.[5]

LMX and Culture Rockstuhl et al's 2012 meta-analysis of LMX theory and national culture correlates found that in Western cultures LMX is more strongly correlated with organizational citizenship behavior (OCB), justice perceptions, job satisfaction, turnover intentions, and leader trust than in Asian cultures.[8] This meta-analysis used 253 studies conducted in 23 countries to compare the differences in how LMX influenced work-related attitudes and behaviors such as task performance, OCB, distributive justice, procedural justice, interactional justice, job satisfaction, affective commitment, normative commitment, and turnover intentions between two different cultural configurations: horizontal-individualistic (Western countries) and vertical-collectivist (Asian countries). The analysis found that the relationships between LMX and citizenship behaviors, between LMX and justice outcomes, between LMX and job satisfaction, between LMX and turnover intentions, and between LMX and leader trust are stronger in horizontal-individualistic cultures than in vertical-collectivist cultures. The analysis also found that there is not a cultural difference in the relationships between LMX and task performance and between LMX and affective and normative organizational commitment. [8]

LMX and Citizenship Behaviors Ilies et al's 2007 meta-analysis of LMX theory and citizenship behaviors found a positive relationship between LMX and citizenship behaviors.[7] The meta-analysis also found that the target of the citizenship behaviors has a moderating effect on the magnitude of the relationship between LMX and citizenship behaviors. That is, citizenship behaviors targeted at individuals are more strongly correlated with LMX than are citizenship behaviors targeted at an organization.[7]

Practical Applications

When joining a team, it is important to join the inner circle, take on more than your share of administrative and other tasks in order to gain trust from your leaders. [citation needed]

The quality of the LMX relationship varies. It is most efficient on one of the two ends of the spectrum: either extremely low or extremely high. The size of the group, financial resources available, and the overall workload are also important. The theory can also work upwards as well. The leader can gain power by being a member of his or her manager's inner circle, which the leader can then share with subordinates. [citation needed]

The Leader-Member Exchange Theory can be utilized outside of the workplace. It can be applied to group projects for school, clubs, etc. By using LMX in such circumstances, you can learn more about how you see your team members. First, you must determine who your out-group consists of. When you do this you have to make sure you know how they ended up under this title. Compare facts with your perception of the events. The next step you must take requires you to re-establish the relationship with those in the out-group. In doing so, you will gain respect as a leader. It may also boost morale for those members of the out-group. However, make a mental note that those members will have their guards up at first when you try to give your support to them. Make it sincere by approaching each member one-on-one. Take time to get to know a little more about them. This can also help you learn more about what drives them. From that point on, try to keep the reconnection going by keeping in touch with those members. Make an effort to offer your guidance on any of their tasks if they need assistance. Your third and final step to apply the Leader-Member Exchange Theory is to offer some form of mentoring or coaching. This allows a type of opportunity for the member to advance in the group. Start first with low risk assignments. [citation needed]

Interventions IS THIS TOO SIMILAR TO PRACTICAL APPLICATIONS?

Boundary Conditions and Limitations The main limitation of leader–member exchange research is that it is not particularly helpful in describing the specific leader behaviors that promote high-quality relationships. At best it only implies generalities about the need for leaders to show trust, respect, openness, autonomy and discretion. Additionally, the theory involves the assumption that each individual is worthy of the same amount of trust, chance of project responsibility, and opportunity for advancement. This is not always the case. The members with the most talent will receive the better opportunities than those in the out-group, perhaps. Because of this reason, the leader must make sure that he or she is using the theory to help themselves be objective in the manners in which they deal with others. [citation needed]

Pros • This theory is dynamic and points to possible ways for employees or managers to either weaken or strengthen relationships. • It provides a structure for both modeling specific situation and solutions to the problems • The theory explains the mechanics of loyalty to leader and corruption [citation needed]

Cons • The theory does not account for the leader's personalities • It does not account for the fact that values also affect group dynamics. It does not state clearly how values will affect the relationship between the leader and group. • Theory assumes competency of all individuals and likely also maturity of organisation. [citation needed]

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