Leader- Member Exchange

1. Leader-Member Exchange By Justin DeMerchant February 15, 2010

2. What We’ll Cover • Introduce major areas of research • Answer logical questions • Over-arching reviews of the literature • My opinion • Practical implications

3. Dyadic Level Analysis • Vertical Dyad Linkage (VDL) • Leaders do not adopt a single leadership style • Behave differently towards different group members • Alternative to Average Leadership Style (ALS) • Leader treats all members the same • Differences are due to errors of perception or measurement

4. Types • Vertical Dyad Linkage (VDL) • Differentiated dyads in groups level of analysis • Negotiating latitude is key variable • Leader Member Exchange (LMX) • Relationships of dyads in groups level of analysis • Quality of exchange is key variable • Individualized Leadership (IL) • Independent dyad level of analysis • Self-worth, satisfaction, & performance are key variable

5. Dansereau, Graen, & Haga (1975) A Vertical Dyad Linkage Approach to Leadership Within Formal Organizations

6. A VDL Approach to Leadership • Major paper that suggested dyad as appropriate level of analysis • Hypotheses • Studying leadership at dyadic level preferable due to multitude of L-M relationships • Prediction • Members given more latitude in job definition will produce leadership relationships

7. A VDL Approach to Leadership • Concluded • Relationship between supervisors and individual members varied significantly • Relationships were formed quickly and were predictive of future performance • Some members of a group can be lead while others are supervised

8. Graen, & Uhl-Bien (1995) Relationship based approach to leadership: development of leader-member exchange (LMX) Theory of leadership over 25 years

9. Relationship Based Approach • Graen’s attempt to bring together all of the LMX research • Hypotheses • LMX is a study of an organization as a whole examining individual relationships and inter-relationships

10. Relationship Based Approach • Proposition • L-E has evolved from VDL to leadership making

11. Relationship Based Approach • Proposition • -- L-M relationships move through three stages with increasing benefits

12. Relationship Based Approach • Conclusion • Define 3 levels of analysis within LMX as leader, follower, & relationship • Give stages of LMX progression (stranger -> mature) • Defend LMX7 measure • Begin to make the case for LMX as transactional & transformational

13. Dansereau et. al (1995) Individualized Leadership: A new multiple level approach

14. Individualized Leadership • Dansereau’s introduction of IL - a resistance to the trend of LMX towards group level examinations • Hypothesis: It is the content of the individual relationship that is most important

15. Individualized Leadership • Predictions • A supervisor’s perception of their support will correlate with their perception of performance • A subordinate’s perception of supervisor support will correlate with their perception of satisfactory performance • The more developed the relationship, the more the perception of the supervisor and subordinate will correlate

16. Individualized Leadership • Methods • Interviews, questionnaires, and lab experiments • Seven different organizations producing nine data sets • Evidence • Supervisor perception of support and performance correlated (p>.05) • Subordinate perception of support and performance correlated (p>.05) • Established relationship supervisor and subordinate perceptions correlated (p>.05) independently of other dyads • Early subordinate perception of self worth was the only initial attribution that showed significant correlation with all variables across all times

17. Individualized Leadership • Conclusions: • Superiors view their formal subordinates individually and subordinates view it this way • While in established dyads perception is correlated, in new dyads subordinate perceived support is significantly correlated • Application: • Take advantage of the cycle. When a superior builds the perception of self worth support the subordinate will perform better, leading to more perceived (and likely actual) support, completing the cycle.

18. Questions • Can a supervisor move a relationship from low LMX to high? • When do relationships form and what factors affect it? • How does LMX affect reciprocity? • What effect does a supervisor's relationship with their supervisor have on subordinates? • What is the effect of low LMX relationships? • What happens when there is incongruence in LMX perception?

19. Can a supervisor move a relationship from low LMX to high? Scandura, & Graen (1984) Moderating effects of initial leader-member exchange status on the effects of a leadership intervention

20. Effects of Leadership Intervention • Hypothesis • Employees having initially low LMX would respond more positively to the leadership intervention than those having higher quality relationships • Conclusions • Hypothesis was confirmed • Low LMX participants could produce at higher levels, but because of their relationship with supervisors it was not perceived as worth the effort

21. When do relationships form and what factors affect it? Liden, Wayne, & Stilwell (1993) A longitudinal study on the early development of leader-member exchanges

22. Early Development • Hypothesis • LMX is formed early in a dyadic relationship and will be correlated with positive expectations • Predictions • Expectations of future competence, degree of similarity, perceived performance, perceived similarity, liking, and demographic similarity will all be positively correlated indicators of LMX

23. Early Development • Conclusions • Performance was not as dominant a determining variable as it was thought to be • Perceived similarity, and liking seem to be important in relationship development • Relationships are formed very quickly

24. How does LMX affect reciprocity? Uhl-Bien, & Maslyn (2003) Reciprocity in Manger-Subordinate Relationships: Components, Configurations, and outcomes

25. Reciprocity in LMX Relationships • Hypothesis • LMX will be negatively correlated with equivalence, immediacy, and self-interest • Predictions • In situations of negative reciprocity there will be lower performance, conscientiousness, organizational commitment, perceived organizational support, and altruism • Subordinates in exchanges of positive reciprocity will show higher commitment, POS, and altruism

26. Reciprocity in LMX Relationships • Methods • Questionnaires given to employees resulting in 232 matched pairs • Used the LMX7 • Evidence • LMX correlated significantly with reciprocity components as expected, except other-interest which it correlated with insignificantly • High and low reciprocity dyads did not differ significantly in terms of leader perceived performance or conscientiousness, but the negative reciprocity group was significantly lower than either

27. Reciprocity in LMX Relationships • Conclusion • Reciprocity components indicate that it may be a useful variable in defining relational quality; however the current measures of LMX may need to be adjusted to capture negative reciprocity • Application • Low and high quality relationships may be acceptable depending on the desired outcome, what one needs to look out for is negative reciprocity

28. What effect does a supervisor's relationship with their supervisor have on subordinates? Tangirala, Green, & Ramanujam (2007) In the shadow of the boss’s boss: effects of Supervisors’ upward exchange relationships on employees

29. Supervisor’s Upward Exchange • Hypothesis • When the relationship between the supervisor and their supervisor is high quality the effects of high/low LMX will be amplified • Conclusion • Supervisors with high LLX relationships have greater influence – both positive and negative – on their subordinates

30. What is the effect of low LMX relationships? Bolino, & Turnley (2009) Relative Deprivation among employees in lower-quality leader-member exchange relationships

31. Effect of Low LMX • Hypothesis • Feelings of deprivation among low LMX employees will be moderated by many personal and interpersonal factors

32. Effect of Low LMX • Predictions

33. Effect of Low LMX • Methods • This paper combined past LMX studies with deprivation theory • Conclusion • Employees who have low quality exchange relationships are more likely to have feelings of deprivation, which can manifest either in constructive, neutral, or destructive behavior • Application • It may be possible for superiors to use low LMX relationships as a motivator for employees to improve themselves given the conditions

34. What happens when there is incongruence in LMX perception? Cogliser, Schriesheim, Scandura, & Gardner (2009) Balance in Leader and follower perceptions of leader member exchange: Relationships with performance and work attitudes

35. Leader and Follower Perceptions • Hypothesis • Where there agreement on LMX levels performance, commitment, and satisfaction correlate; when there is disagreement performance, commitment, and satisfaction will be in the middle • Predictions • Member overestimation will lead to lower performance • Member underestimation will lead to lower satisfaction and commitment

36. Leader and Follower Perceptions • Methods • Questionnaires administered to 422 matched pairs using LMX7 • Evidence • Performance correlated as expected • Job satisfaction correlated as expected • Organization commitment correlated as expected, with the exception that the underestimation group scored lower than the low/balanced group

37. Leader and Follower Perceptions • Conclusion • Incongruence in LMX quality ratings between superiors and subordinates can be meaningfully related to performance and attitudes • Application • In most cases either party having a high LMX perception has its benefits, so regardless of what the other party actually perceives it is beneficial to conduct ones self in a high LMX manner

38. Reviews of The Literature • Common themes • Urge for more consistent level of analysis • Stress the importance of using standard measures • Agreement on taxonomy needed

39. Gerstner, & Day (1997) Meta-Analytic Review of Leader-member exchange theory: Correlates and Construct issues

40. Meta-Analytic Review • Hypothesis • LMX is positively correlated with higher performance ratings, better objective performance, higher overall satisfaction, greater satisfaction with superiors, more organizational commitment, and more positive role perceptions • Predictions • A meta-analysis of past studies will bring together information giving more substantial weight to the studies as a whole

41. Meta-Analytic Review • Methods • 164 studies were identified from published articles, conference papers, doctoral dissertations, and unpublished manuscripts • Cut this number down (to 85) by only allowing those in which • Dyadic exchange quality was measured • Results were sufficient to calculate effect for the relationship between relationship quality and a correlate, or between leader and member LMX perceptions • The relationship was reported in at least 5 studies

42. Meta-Analytic Review • Evidence • Member LMX perception correlated with leader performance ratings, though the correlation was not as strong as it was with leader LMX perception • All the the factors considered correlated in the expected direction significantly, with the exception of actual turnover • Objective performance was significant, but its relevance was questioned

43. Meta-Analytic Review • Conclusion • LMX is most strongly related to subjective performance and member affective outcomes • Because of discrepancies studies should measure both leader and member perceived LMX; though the results suggest that member perspective is more accurate • LMX7 produced high average LMX alphas than other measures

44. Schriesheim, Castro, & Cogliser (1999) Leader-member exchange (LMX) research: a comprehensive review of theory, measurement, and data-analytic practices

45. Comprehensive Review of Theory • Hypothesis • The study of dyadic relationships has been hampered by inadequacy in specificity of the level of analysis and lack of consistency in measurement • Methods • Authors reviewed 147 studies analyzing the level of analysis and appropriateness of measures • Thorough review of suggestions of others as to how field should rectify issues

46. Comprehensive Review of Theory • Evidence • Of 147 studies only 10 provided analytically sound data about LMX at a particular level of analysis • Of the 10 at least 5 used questionable measures • Conclusion • Future studies need to be cognizant and specific about the level of analysis they are examining • Any deviation from standard analytic measures need to be justified

47. Van Breukelen, Schyns, & Le Blanc (2006) Leader-member exchange theory and research: Accomplishments and future challenges

48. Accomplishments and Challenges • Hypothesis • The study of LMX faces many challenges that need to be resolved to make it more useful and allow us to gain more insight into how dyadic relationships form and their repercussions • Conclusion • Need to clearly define and establish measurement for relationship quality and exchange processes • Studies need to look at specific levels of analysis, and employ appropriate measures accordingly

49. My Thoughts • Usefulness • Ease of analysis • Clear applicability • Problems with the field • Lack of consistency • New field with much development ahead

50. My Thoughts • Where the field should go • Study into affective variables • Best way to move LMX relationships from low to high • Prescriptive vs. Descriptive • The bigger picture