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

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

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 3

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 4

5. A VERTICAL DYAD LINKAGE APPROACH TO LEADERSHIP WITHIN FORMAL ORGANIZATIONS Dansereau, Graen, & Haga (1975) 5

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 6

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 7

8. RELATIONSHIP BASED APPROACH TO LEADERSHIP: DEVELOPMENT OF LEADER- MEMBER EXCHANGE (LMX) THEORY OF LEADERSHIP OVER 25 YEARS Graen, & Uhl-Bien (1995) 8

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 9

10. Relationship Based Approach 10 Proposition – L-E has evolved from VDL to leadership making Stage 1 VDLStage 2 LMX Stage 3 Leadership Making Stage 4 Team-Making Competence Network

11. Relationship Based Approach Stranger >Role-Finding >Cash & Carry >Immediate >Low LMX >No Influence >Behavioral Management Acquaintance >Role-Making >Mixed Exchange >Some Delay >Medium LMX >Limited Influence >Behavioral Management Maturity >Role- Implementation >In-Kind Exchange >Indefinite >High LMX >High Influence >Reciprocal Interest 11 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 12

13. INDIVIDUALIZED LEADERSHIP: A NEW MULTIPLE LEVEL APPROACH Dansereau et. al (1995) 13

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 14

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 15

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 16

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. 17

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? 18

19. MODERATING EFFECTS OF INITIAL LEADER-MEMBER EXCHANGE STATUS ON THE EFFECTS OF A LEADERSHIP INTERVENTION Scandura, & Graen (1984) 19 Can a supervisor move a relationship from low LMX to high?

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 20

21. A LONGITUDINAL STUDY ON THE EARLY DEVELOPMENT OF LEADER-MEMBER EXCHANGES Liden, Wayne, & Stilwell (1993) 21 When do relationships form and what factors affect it?

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 22

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 23

24. RECIPROCITY IN MANGER- SUBORDINATE RELATIONSHIPS: COMPONENTS, CONFIGURATIONS, AND OUTCOMES Uhl-Bien, & Maslyn (2003) 24 How does LMX affect reciprocity?

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 25

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 26

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 27

28. IN THE SHADOW OF THE BOSS’S BOSS: EFFECTS OF SUPERVISORS’ UPWARD EXCHANGE RELATIONSHIPS ON EMPLOYEES Tangirala, Green, & Ramanujam (2007) 28 What effect does a supervisor's relationship with their supervisor have on subordinates?

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 29

30. RELATIVE DEPRIVATION AMONG EMPLOYEES IN LOWER-QUALITY LEADER-MEMBER EXCHANGE RELATIONSHIPS Bolino, & Turnley (2009) 30 What is the effect of low LMX relationships?

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

32. Effect of Low LMX 32 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 33

34. BALANCE IN LEADER AND FOLLOWER PERCEPTIONS OF LEADER MEMBER EXCHANGE: RELATIONSHIPS WITH PERFORMANCE AND WORK ATTITUDES Cogliser, Schriesheim, Scandura, & Gardner (2009) 34 What happens when there is incongruence in LMX perception?

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 35

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 36

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 37

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 38

39. META-ANALYTIC REVIEW OF LEADER- MEMBER EXCHANGE THEORY: CORRELATES AND CONSTRUCT ISSUES Gerstner, & Day (1997) 39

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 40

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 41

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 42

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 43

44. LEADER-MEMBER EXCHANGE (LMX) RESEARCH: A COMPREHENSIVE REVIEW OF THEORY, MEASUREMENT, AND DATA-ANALYTIC PRACTICES Schriesheim, Castro, & Cogliser (1999) 44

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 45

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 46

47. LEADER-MEMBER EXCHANGE THEORY AND RESEARCH: ACCOMPLISHMENTS AND FUTURE CHALLENGES Van Breukelen, Schyns, & Le Blanc (2006) 47

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 48

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

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 50

51. Practical Implications Allows managers insight into how their actions affect the outcomes of subordinates Also shows manager which subordinates they are most easily able to improve performance Demonstrates value of impression management Gives an understanding of when a high LMX relationship might not be necessary 51