Leader Member Exchange Theory

What Leader Member Exchange Theory is

Leader Member Exchange Theory (نظرية تبادل القائد والعضو, abbreviated LMX) is a theory of leadership that looks at the two person relationship between a leader and each member of the team taken singly. It holds that the quality of this relationship varies from one member to another inside a single team, and that the team is not treated as one unit. It is attributed to Graen and colleagues, and it began in the 1970s under the name Vertical Dyad Linkage before it took its present name.

The theory describes relationships and does not judge them. It is not an assessment of a manager or of an employee, it does not report that a close relationship is better than a distant one, and it is not a description of the relationship between managers and employees in the Kingdom.

Where the theory comes from

We checked the following works in Crossref. The records show that the works exist, and they do not show what the works contain:

• Dansereau, Graen and Haga. The article “A vertical dyad linkage approach to leadership within formal organizations” in Organizational Behavior and Human Performance, volume 13, issue 1, 1975, pages 46 to 78.
• Graen and Uhl Bien. The article “Relationship based approach to leadership: Development of leader member exchange (LMX) theory of leadership over 25 years: Applying a multi level multi domain perspective” in The Leadership Quarterly, volume 6, issue 2, 1995, pages 219 to 247.
• Gerstner and Day. The article “Meta analytic review of leader member exchange theory: Correlates and construct issues” in the Journal of Applied Psychology, volume 82, issue 6, 1997, pages 827 to 844.
• Liden and Maslyn. The article “Multidimensionality of leader member exchange: An empirical assessment through scale development” in the Journal of Management, volume 24, issue 1, 1998, pages 43 to 72.
• Dulebohn and colleagues. The article “A Meta Analysis of Antecedents and Consequences of Leader Member Exchange” in the Journal of Management, volume 38, issue 6, pages 1715 to 1759.
• Martin and colleagues. The article “Leader Member Exchange (LMX) and Performance: A Meta Analytic Review” in Personnel Psychology, volume 69, issue 1, pages 67 to 121.
• Gottfredson, Wright and Heaphy. The article “A critique of the Leader Member Exchange construct: Back to square one” in The Leadership Quarterly, volume 31, issue 6, 2020, article number 101385.

We did not see the text of any of them, so we quote no wording and no result, and we draw from the titles only what they indicate: that the relationship of the concept to other variables has been studied, that its dimensions have been discussed, and that it has been criticised. What we describe of the phases and the names is a summary in our own words of what secondary summaries pass on, and the Arabic names are a choice of ours.

The basic idea

The summaries state that the older theories of leadership assumed that a leader deals with the team in a similar manner, and that this theory moved on to ask about the relationship between the leader and each individual taken singly. They describe some members of a team as having a closer relationship with the leader and a wider exchange, and the literature calls them the In group. They describe others as having a relationship limited to what the job imposes, and call them the Out group. The two names mark the two ends of a spectrum and are not two closed categories.

The summaries describe the relationship as arising in successive phases: role taking, when a member starts work and learns his or her place and the leader; then role making, when each of the two tests what he or she offers the other; then routinisation, when the relationship settles into a pattern. The summaries differ in the number of phases and their names, some giving 3 and some 4, and without the original text we could not settle it. We keep to the 3 phases that appeared in several summaries and do not count them as fixed.

How the theory differs from nearby concepts

• Leadership styles. The classifications of what a leader does when directing a team and taking decisions are the field of leadership styles. A style describes what a leader does in general, and a relationship describes what lies between the leader and one particular member, which is why a single team holds one style with relationships that differ.
• Transactional leadership. The transactional style is one of 3 styles in the series of Bass, alongside the style covered in transformational leadership. It is a manner built on rewarding agreed achievement. The word exchange in the two names does not make them one thing, since that is a style of leadership and this is a relationship between a leader and a member.
• Favouritism. Preferring a person in hiring, promotion or the distribution of opportunities because of a tie of kinship or friendship and not because of competence is the topic of nepotism. In the description of the summaries the theory describes the unevenness of relationships and does not call it favouritism. Whether the unevenness was built on competence or on closeness is a separate question that the theory, by its title, does not answer.
• The one on one meeting. A short regular meeting between an employee and the direct manager, in which the employee owns the agenda, is described under one on one meeting. Such a meeting may be a visible trace of the relationship, and that is a suggestion of ours and not text in the source.
• Rater bias. A systematic tendency in performance appraisal that makes the grade reflect something in the rater and not the performance of the employee alone is dealt with in rater bias, where similarity is named among its forms. In our estimate, closeness of relationship may enter the judgement of a rater on an employee whom the rater knows well, and we do not attribute this to the theory.

A hypothetical example: how a manager’s time is divided across a team of 8

Take a hypothetical manager with 8 employees who sets aside 240 minutes a week for one on one meetings with them. Divided equally, each employee would receive 240 ÷ 8 = 30 minutes. After 4 weeks of recording, it turned out that, as a weekly average, 3 employees had received 50 minutes each, a total of 150, that 3 others had received 20 minutes each, a total of 60, and that the remaining two had received 15 minutes each, a total of 30. The total is 150 + 60 + 30 = 240.

The share of the first group is 150 ÷ 240 = 62.5%, the share of the second group is 60 ÷ 240 = 25% and the share of the third group is 30 ÷ 240 = 12.5%, and together they come to 100%. The highest individual share against the lowest is 50 ÷ 15 = 3.3 times approximately. The manager then looked at 10 prominent tasks distributed in the same quarter and found that 7 of them had gone to the first group. That is 7 ÷ 10 = 70% of the tasks to 3 of 8 employees, who are 3 ÷ 8 = 37.5% of the team.

The figures are hypothetical and were set to illustrate. They do not represent a manager or a study. The unevenness does not measure the quality of a relationship, which in the literature is measured by a questionnaire whose forms we did not see, and minutes are at best a visible trace of it. Nor does it prove favouritism, since the employees of the first group might have joined the work more recently or have a greater need of guidance. The example puts one question: is there a criterion for the distribution that the manager can state to the team?

How human resources reads a relationship without judging it

The questions that follow are ours and are not steps in a source. Do employees know on what basis opportunities and prominent tasks are distributed? Do the complaints or resignations of a team differ according to closeness to the manager? Do the same patterns recur with different managers, or are they tied to one particular manager? The answer to the first questions is sought from the employees and the manager together, because each of them sees the relationship from his or her own side.

The limits of the theory

• A concept under discussion. The title of the article by Gottfredson and colleagues criticises the concept, and the title of the article by Liden and Maslyn points to its several dimensions. We set out the arguments of neither, because we did not see them.
• The direction of the effect not settled by the name. Where a close relationship and a high performance are described together, we do not know which came first. This is a logical inference of ours and not a research result.
• A measurement that needs care. The quality of the relationship is measured by answers given by the member or the leader, and they reflect the perception of each.
• A Saudi context not examined. In the sources we reviewed, we found no Saudi study that we adopt on the theory in Saudi organisations.

How the theory is misunderstood

• Calling every close relationship favouritism. The theory describes a difference, and judging it needs a criterion.
• Counting the In group as a fixed category. The summaries describe a relationship that forms and changes through phases.
• Reading a distant relationship as an accusation against the member. It is a description of a relationship between two people, and not a judgement on either of them.
• Mixing it with transactional leadership. The name is similar and the subject differs, as the comparison between them shows.

The role of human resources

Human resources is in a position to use the theory in framing the questions it puts to managers about how they distribute time and opportunities, and to train them to know the criterion of a decision and to state it to their team. The decisions on promotion and tasks stay with whoever holds them in management, and human resources takes part in them through its knowledge of criteria and of the patterns of complaints, and not by classifying the relationships of people.

What the sources allow us to say

We do not state that a close relationship between a manager and an employee raises performance or satisfaction or lowers resignation, or that unevenness of relationships harms a team. We did not read the articles recorded in Crossref or the two meta analyses among them, and in the sources we reviewed we found no Saudi study that we adopt, so we attribute to a source neither an effect nor a figure.

The better course is to treat the theory as a language for describing the unevenness of relationships inside a team, and to judge any pattern in an organisation by what appears in it: whether employees know the criterion by which opportunities are distributed, and whether the sense of fairness differs among the members of the team. What is decided after that depends on the manager, the team and the nature of the work.

This is an explanation of the concept, not legal advice.