The Leader-Member Exchange Theory
What is the Leader-Member Exchange Theory (LMX)?
The Leader-Member Exchange Theory (LMX) is a process that explores how leaders and members develop relationships that can either contribute to growth or hinder personal development. The theory is divided into a three-step process, as outlined below.
The Three Steps of Leader-Member Exchange Theory (LMX)
This theory involves a three-step process:
- Role Taking
- Role Making
1. Role Taking
- This takes place when a new member joins a team and their abilities are initially assessed by the leader.
2. Role Making
- Evidently, this is where a role is created for the member.
- Building trust is a key factor in this stage.
- The member is classified into one of two groups - the IN-group or the OUT-group. With reference to these groups, the manager subconsciously categorises members into either group based on perceived similarity.
- Members that fall into the IN group are trusted by the manager and will, therefore, receive high-risk tasks, plenty of opportunities for career and skill development and ongoing support and guidance.
- Contrarily, employees that fall into the OUT group will be given unchallenging work as the manager doesnÃ¢â‚¬â„¢t have a high level of trust in them and consequently, they will not be exposed to many opportunities for them to develop their skills and abilities.
- However, a leader should strive to get the best possible results from his/her team and therefore should aim to eventually have the same level of trust in every member in order to
work as an entire IN-group unit.
- This is where routines, norms and expectations are established and both parties get an insight into how they both work.
- The benefits from a manager's point of view are that this process enables you to identify where you might be unfair and help you in avoiding unconscious bias.
- From here, the water can be slowly tested by offering the same opportunities for development.
The Benefits of Having High LMX Relationships
It is advisable for leaders to have a high LMX relationship with team members as there are numerous benefits of having high LMX relationships. Amongst others, a high LMX relationship has been shown to result in:
- Increased job satisfaction and productivity
- Increased confidence
- Stronger mutual trust
- Increased respect and recognition
- More independence
- Easy and open communication
- Increased commitment to the job and business