Leader-Member Exchange Theory
By Michael Mooney
Organizations function through working roles of people that are often defined through hierarchies of positions, titles, and responsibilities. In one aspect these structures are clearly defined by positions and policies, yet there remain unofficial and ambiguous structures that are defined by interpersonal relations (Betts, p. 115, 2004). People generally embrace work environments from at least one of two perspectives: leader to member or member to member (Chung-Kai & Chia-Hung, 2009). Leader-member exchange theory (LMX) is the focus of such structures in the context of relationships between managers and subordinates. LMX is defined in terms of a series of transactions between managers and subordinates that result in psychological categories of statuses, persuasion, and or lack thereof. The concept is that managers are limited in their allocation of time and resources; therefore pure equality among employees is simply not possible (Deluga, & Perry, 1994). Members find their status’ within favorable or unfavorable groups based upon how well they do or do not work with leadership (Northouse, 2010).
These differentiations of familiarity and preferential treatments are further categorized as “high” and “low” quality, or “in” and “out” groups. Employees who are members of high groups are predictably more productive, strive for excellence, and assume responsibilities beyond their job descriptions. LMX references these behaviors as the likely reasons why they achieve favorable statuses with management. This naturally results in greater notability through increased interactions, and shared work related opinions. Contrastingly, those of the low quality groups will experience minimal interactions with management weakening notability, appreciation, and mutual opinions (Mayfield, & Mayfield, p.74, 1998). This group is not necessarily formed though leadership biases, but rather by the common attitude of not acting beyond their clearly defined job descriptions. Naturally this outlook on the workplace is not well received by leaders who tend to see things in terms of the organization’s interest –in light of big picture thinking (Northouse, 2010).
“Traditionally, leadership is treated as if it were completely determined by a leader’s attributes…toward all workers…In contrast, LMX theory defines leadership as the specific work interactions between a leader and an individual worker” (Mayfield, & Mayfield, p. 73, 1998). The LMX model follows at least four specific behaviors. 1) Individualized consideration, the action of meeting member’s needs from an individual and subjective standpoint. These needs can be emotional, physical, professional, etc. 2) Inspirational motivation, the process of vision casting. 3) Idealized influence, the building of rapport through the expression of personalities. 4) Intellectual stimulation, the leadership’s expression of special knowledge that promotes education of creativity (Chung-Kai & Chia-Hung, 2009).
Day and Crain’s (1992) research shows that traits are very important factors in the overall perceptions leaders hold of members. Such traits are thought of as instruments of impressions about productivity, social acceptance, employee turnover, etc. Favorable and unfavorable characteristics are subjectively considered. However, two predictable elements of leader’s assumptions of quality relations are 1) member’s skills; and 2) leader’s personal favoring of the of members (Day, & Crain, 1992).
Studies by Glasø and Einarsen (2008) observe the expression of emotions within the context of LMX environments. They report that leadership is a highly involved process of emotional exchanges –many of which are not genuinely felt. Notably, a large number of leaders make a distinction between “suppressed” and “faked” emotions. Suppression is regarded as a quality to the application of LMX; whereas faking is perceived as dishonest. More than 97% of surveyed leaders report that they suppress emotions, and in spite of the dishonest opinion, more than 94% report faking them. The most common suppressed emotions are described as negative (frustration, disappointment, etc.), while the most common faked are described as positive (interest, enthusiasm, etc.). It follows that members selected for leadership positions also share a commonality for natural emotional regulation abilities above those not selected as leadership penitential. Contrastingly, once appointed to higher levels of status, leaders are then afforded more room for negative emotional expression, which ironically is often perceived by members as competence (Glasø, & Einarsen, 2008). This obviously leads to perceptions of unjust or unequal circumstances in the work environment.
Piccolo, Bardes, and Judge (2008) report that employees’ attitudes about job satisfaction, commitment, fatigue, and intentions regarding separation are all affected by perceptions of fairness in matters of procedure, distributions, and treatment. Organizational justice is typically viewed through the lenses of procedural and interpersonal transactions with leaders. Procedural judgments are formed around perceived fairness in the enforcement of policies, and interpersonal judgments are formed by interpretations of direct interactions with leaders. It follows that productive outcomes flourish in environments of equability. The key component is that leadership holds the trust of their high quality members. Where trust is low, studies show that even fair conditions have little or no affect on employee cooperation. However when trusted, employees are more likely to dismiss, justify, or at least minimize perceived negative circumstances because of their relationships with leadership. “Exceptional leaders—in terms of their confidence, charisma, and leadership style—motivate followers to focus on aspects of procedural and interpersonal fairness…thus enhancing the utility of organizational justice” (Piccolo, Bardes, & Judge, p. 280, 2008).