Leader-Member Exchange Theory (LMX)
The Leader-Member Exchange Theory (LMX) is premised on the belief that, by understanding the relationship between a leader and followers, one can appreciate how leaders influence employees. Different leaders forge varying types of relationships with their employees. In LMX, these relationships are categorized as high-quality or low-quality (Winkler, 2010).
High Quality LMX
In a high-quality LMX relationship, there is mutual trust, warmth, helpfulness and respect between the leader and followers. Moreover, both parties transcend their job-descriptions, in helping one another to achieve personal goals. This relationship is a combination of professionalism and mutuality. Such workers are more productive than others because they enjoy the support of their leader (Lussier & Achua, 2010).
Low Quality LMX
On the other hand, a low-quality LMS relationship is devoid of fondness, dependence or goodwill between the leader and the followers. Employees perform their duties as stipulated and receive concomitant rewards or sanctions from the leader. However, they are not expected to be loyal or obligated to the leader, beyond the confines of formal employment (Winkler, 2010).
In-groups and Out-groups
LMX involves the existence of in-groups and out-groups in organizations. In-group members are close to the leader and receive more resources and support. There are often rated highly during performance appraisals than out-group members. The latter are not as close and do not enjoy favors from the leader. Their survival in the firm is premised on good performance. Anything less earns a reprimand or other form of sanction (Winkler 2010).
Application of LMX Theory
Jonathan has created a high-quality LMX with his employees and is, therefore, liked by workers. Stephanie is happy and positive about the tasks she is assigned. Jonathan trusts workers and gives them freedom to make decisions, like re-ordering materials from vendors. He also creates a motivating working environment by rotating employees in different sections of the supermarket. Followers receive monetary rewards for extra work. For example, Stephanie expects to make a $75 bonus for selling bottles of truffle oil. She feels confident because her leader is encouraging and motivating her.
In contrast, Dan has a low-quality LMX with his employees because he does not motivate his employees. Alex complains about Dan’s high-handedness and rigidity. Unlike Stephanie, Alex does the same task every working day. Dan treats his staff like slaves or automatons. He expects them to take lunch within thirty minutes and not the forty-five they are entitled to. He also practices favoritism. He has an in-group of people like Denise, who work across various sections and are paid extra. Apparently, Denise flatters the boss, but Alex is not willing to sink that low. Alex is even better than Jean, who earns less and has worked in one section of the supermarket for seven years. Dan’s verbal communication is denigrating and demoralizing, as is evident when he confronts Alex during lunch break. Alex’s action of spoiling Dan’s sandwich epitomizes the extent of deterioration of relationship between Dan and his staff.
In conclusion, the two leaders have created different types of relationships with employees, and this influences how employees feel and behave. The high-quality LMX between Jonathan and his workers has resulted in the latter being highly-motivated, happy, more productive and free. Dan, on the other hand, has a low LMX with his employees, which has resulted in low-levels of motivation and frustration among his staff.
Lussier, R., & Achua, C. (2010). Leadership: Theory, Application, & Skill Development. Mason,
OH: Cengage Learning.
Winkler, I. (2010). Contemporary Leadership Theories: Enhancing the Understanding of the
Complexity, Subjectivity and Dynamic of Leadership. New York: Springer.