Source: http://faculty.css.edu/dswenson/web/lead/lmx-vdl.html
Readers, welcome back to another week of the Educated Leadership Blog! We are looking at the Leader-Member Exchange (LMX) theory of leadership, the Vertical Dyad Linkage (VDL), in-group, out-group and their impact on performance.
First, let’s review the basics of LMX. Rowe and Guerrero stated, “Whether we view the LMX theory of leadership as descriptive or prescriptive, it works by emphasizing the dyadic relationship that both leaders and followers see as special and unique” (2013, p. 203). “From a descriptive sense, LMX theory implies that we need to understand that in-groups and out-groups exist in groups and organizations and that as leaders, we participate in their development” 2013, p. 202).
Looking at the prescriptive perspective, Rowe and Guerrero noted a leader should attempt to, “develop relationships with all subordinates who are similar to those described for in-group members” (2013, p. 203). Northouse commented that LMX has several positive features. “First, LMX theory is a strong descriptive approach that explains how leaders use some followers (in-group members) more than others (out-group members) to accomplish organizational goals effectively” (2016, p.157). The second feature is that it focuses on the leader-member relationship (Northouse,2016). Conversely, LMX theory does run counter to principles of fairness normally expected from leaders and the theory does not prescribe the manner of building the deep relationships with in-groups (Northouse, 2016).
As we can see in the diagram above (Swenson), the probability for higher performance increases with the in-groups and faces distinct challenges with the out-group. The interaction and the relationship that encompasses the leader and the in-group acts as a catalyst, increasing performance. Given that humans will generally be more apt to work harder for people with whom they have a relationship than for those they do not. I have also heard this phenomenon compared to a gas tank or bank account of loyalty. The leader employs the techniques indicated on the downward arrow to make deposits that are repaid to the leader in loyalty, commitment, and assistance at a rate that may exceed the amount deposited by the leader. In practice, there is a risk that the in-group becomes the “go-to” team that eventually suffers burn-out or the leader overdraws the account and resentment begins to build in the in-group.
I have quite a bit of experience in the LMX theory. The dynamic in my organization sets up in many places in the manner of LMX with in-groups and out-groups along with the need to build special relationships with work groups on the periphery. I can also attest to the admonishment with which Rowe and Guerrero close their chapter on LMX, “We encourage each of you to be willing to lead others but to also understand the responsibility you take on for developing special, unique relationships with each of your subordinates” (2013, p. 203). Given the possibility of those in the out-groups to perceive the special relationships as biased or unfair, the repercussions could be destructive. Additionally, some cultures have expectations from closer relationships that may lead to disappointment for some in-group participants.
I have worked for managers that built dyadic linkages with the members of their team. I was compelled to work harder because the repayment of the effort via increased opportunity and responsibility was very addictive. Over time, though, the leader failed to be able to maintain the level of reciprocal input and I felt overworked and underappreciated. Interestingly, when I throttled back my performance to rebuild my desire and commitment I was quickly rebuked for the change by the leader. It was apparent to me that I was being taken for granted and I began to look for another leader for whom to work. I relate this story to act as a warning to those looking at the LMX theory. It takes work and dedicated monitoring of the relationships. Make sure to make deposits in the loyalty tank of those reporting to you. Lastly, look for opportunities to place in-group members into leadership positions, that an excellent gift of trust.
There are implications for the members of the in-group and out-group. The in-group, as stated above will expect more opportunities and responsibilities, as time moves on. They may also expect other “quid pro quo” types of gifts and opportunities. Signs of burn-out and alienation must be looked for regularly by the leader so they can be counteracted as soon as they begin to appear. The out-group will likely struggle with the detrimental effects mentioned in the graphic above. There is an out-group in my organization and the exhibit the characteristics of alienation, apathy, and low performance. I have also seen higher turn-over rates, more health issues, and antagonistic behavior manifested in that group. Last, but by no means least, the out-group is regularly filing complaints with Human Resources citing perceived slights or preferential treatment of others by management. Northouse’s point mentioned earlier that striving to eventually treat all employees as in-group members stands out as excellent advice for some of my leaders, given what I have seen.
Thanks for stopping by and I’ll see you next week!
Northouse, P. G. (2016). Leadership - Theory and Practice (M. Masson Ed. Seventh ed.). Thousand Oaks, CA: SAGE Publications, Inc.
W. Glenn Rowe, L. Guerrero. (2013). Cases in Leadership (L. Todorovic-Arndt Ed. 3rd ed.).
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