Elvis Presley and others being sworn into the US Army, 1958 (Source: Wikimedia Commons)
Ideas for Leaders #670

Leader–Team Member Relationships 1: Impact on Performance

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Key Concept

Leaders and managers have different relationships with different members of their teams. Leader-member exchange theory can help leaders understand how these differences in relationships impact the performance of the team as a whole and of individual team members.

Idea Summary

Leader member exchange (LMX) theory is a theory that assesses leadership based on the relationships between leaders and followers (rather than the specific traits or behaviours of leaders). Thus, for example, LMX theory predicts that a trusting and open relationship between a leader and an employee will result in greater morale and job satisfaction, and thus higher work performance.

While LMX theory was originally dyadic — that is, focused on the one-on-one relationship between a leader and an individual follower — LMX theorists are focusing more and more on what is known as LMX differentiation — that is how individual leader-follower relationships compare with the relationships between the leader and other members of the team. A leader does not usually have the exact same relationship with every member of his or her team. 

There are different metrics used to measure LMX differentiation. The first is central tendency, which is the average LMX quality level of the team. A second team-level LMX metric is variation, which refers to the dispersion in team members’ LMX quality. For example, high LMX variation would indicate a broad difference between the highest and the lowest quality leader-team member relationships in the team; low variation indicates a narrow difference. The final LMX differentiation measurement relates to the relative position of the individual team member’s LMX quality compared to the LMX quality of other team members. 

How does LMX differentiation impact the performance of the team as a whole and the individuals on the team? Past research has led to conflicting results. In a forthcoming Journal of Organizational Behavior article, a team of researchers led by Robin Martin of the University of Manchester’s Alliance Manchester Business School offers several new theoretical perspectives to help answer this question.

One perspective is the affective events theory, in which the leader-follower relationships are viewed as changing over time, depending on events, with each change eliciting certain emotions. Imagine someone losing a leader’s trust after a bad mistake, for example. That person’s emotions relating to the job would be significantly different before and after the unfortunate event. This emotional reaction would be compounded if the leader’s relationship with the other team members remains strong (thus indicating a decrease in the individual’s relative position). 

A second theoretical perspective advocated by Martin and his co-authors to better understand the performance impact of LMX differentiation is work group diversity. Work group diversity often refers to categories such as gender or race. In this case, LMX differentiation would be the unit of diversity. One lesson learned from work group diversity research is the danger of fault lines forming in the team — that is, the diverse team breaks up into subgroups of similar categories (a simple example would be a team divided into a subgroup of men and a subgroup of women, each subgroup paying little attention to the other). According to this theory, high LMX variation could create fault lines between low LMX quality and high LMX quality subgroups (e.g., team members with close relationships with the leader clump together).

A third theoretical perspective advanced by Martin and his team is a social networks perspective. In some ways, strong social networks can alleviate the damage of low LMX quality. A manager who has a strong network of peers to draw on may be able to response better to a low LMX quality relationship with his or her leader than a manager with a weak social network.

These three theories provide different perspectives through which a manager can consider the potential impact of maintaining different quality relationships with different team members.

Business Application

As with most business leaders, the quality of your relationships with different team members is not going to be uniform. Have you considered, however, the potential damage to the performance of your team caused by these different relationships? 

This research offers some different ways to view the dynamics of your team as a result of these different relationships — or LMX differentiation, to use the academic term. 

For example, the affective events theory might highlight the danger of focusing your attention on the new star of the team while neglecting your relationships with other older team members. A work group diversity perspective might reveal the fault lines that have formed between team members with whom you have strong vs. weak relationships. (And if the weak relationships subgroup is nurturing their resentment, their performance is bound to decline). Finally, an employee without the sustenance of social networks may be more greatly impacted by an average or poor relationship with you than you might realize.

The bottom-line lesson of LMX differentiation is to never assess your relationship with a member of the team in a vacuum. Consider the context of the relationship, especially concerning your relationship with the other members of the team. Employees are not only interested in their specific relationship with you; they are also watching how you relate to others. And what they see can make a big difference in how they perform.

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Idea conceived

  • April 2017

Idea posted

  • August 2017

DOI number



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