Leader-Member Exchange (LMX) Theory

The Leader-Member Exchange Theory focuses on the relationship that develops between managers and members of their teams.

1. Leader-Member Exchange (LMX) Theory It explores how leaders and managers develop relationships with team members, and it explains how those relationships can either contribute to growth or hold people back. Focuses on the quality of relationship between the leader and team members. Each leader member relationship can range from low LMX to high LMX.

2. Followers with High LMX are: More productive More satisfied Less likely to quit Have better mental health More satisfied with their supervisor More committed to the organization More likely to go beyond job duties to help out More successful in their careers More likely to provide honest feedback Highly motivated More influential in their organizations, etc. Note: The opposite is true for low LMX followers.

3. Relationship Development Phases: The theory states that all relationships between managers and subordinates go through three stages. These are: Role-Taking (LMX is low) Role-Making (LMX is medium) Role-Routinization (LMX is high)

4. Role-taking occurs when team members first join the group. Managers use this time to assess new members' skills and abilities. 1. Role-Taking 2. Role-Making New team members then begin to work on projects and tasks as part of the team. In this stage, managers generally expect that new team members will work hard, be loyal and prove trustworthy as they get used to their new role. Cont..

5. The theory says that, during this stage, managers sort new team members (often subconsciously) into one of two groups. In-Group Out-Group Basic difference – Followers in the in-group receive more information, influence, confidence, and concern from their leaders than do out-group followers. Cont..

6. During this last phase, trust and pure partnership between team members and their managers are established. 3. Role-Routinization Cont..

7. The research theory concluded that leaders should make every effort to build high-quality relationships with all followers. Leaders should nurture high-quality exchanges with all employees Rather than concentrating on who they like or not. Leaders need to focus on ways to build trust and respect so that all employees become part of the leader's ingroup. Conclusion: