LMX Theory and The Influence of Relationships

Flashback alert…
Let’s take a reminiscent journey back to our days in primary or secondary school. As we roamed the halls, we shared some commonalities (beyond colds, chickenpox, and homework answers) with our classmates. We were all the same age. We had the same purpose—to learn (at least that’s what we were supposed to be doing). Our schedules and roles were similar. Some of us even wore identical uniforms. Yet, we were different from each other.
Some of us were part of the “in” crowd. Some of us were not.
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Is today’s work environment really that much different from what we experienced back in our school days?
This is a concept that many of us grasp from our childhood days. In leadership-speak, this is actually known as “Leader-Member Exchange” or “LMX Theory.” Introduced more than 30 years ago, and further developed through follow-up work over the past several decades, LMX tells us that leaders form “dyadic” or unique one-on-one relationships with subordinates.
The maturity and effectiveness of these relationships dictate whether one is in the “in-group,” or is in an “out-group”—much like the groups we remember back on the school playground. According to LMX, these are typically based on how well the subordinate gets along with the leader. In an organization, those in the in-group are typically more likely to receive critical communication, personalized attention and feedback, assignments outside of traditional job-specific roles, increased responsibility, and increased time and support.
While each of us can intuitively relate to LMX (because we’ve all been there), many of us have difficulty understanding its application when it comes to our grown-up roles in organizations. LMX is not fair, and we’ve been taught that fairness in the workplace is essential. Nevertheless, it is inherent in every organization found today, and it may be impacting you as an individual and the success of your organization more than you know.
A quick story to illustrate this point…
Several years ago I worked with a woman in Ireland who was an up-and-coming CFO candidate for a large corporation. Her future role was all but solidified. She was, however, working on several career-specific initiatives she needed to accomplish prior to moving into the top finance seat. At the same time, she was also working on some personal goals. One of these goals was a desire to quit smoking. She was able to accomplish this personal goal over the course of about two months.
When I quizzed her on how she was progressing with her professional and personal goals, it was clear she felt a great sense of accomplishment, with the exception of one area. Although she had quit smoking, she now found herself “out of the circle,” as she explained it. At the time, she though little of it, and I dismissed her comments as interesting, but useless trivia.
As it turns out, when employees were seated in their office cubicles they were, as she put it, “heads down and eyes on the monitor.” In other words, they were very focused on the task at hand. As they took a break each 90 minutes or so, she and her fellow smokers, including her boss, would go outside and discuss topics beyond what appeared on her computer screen. Sometimes these discussions were related to company strategy. Other times, they centered on more personal matters. But the CFO-to-be was no longer part of the conversation. And that’s where things started to go downhill.
Goodbye in-group, hello out-group.
Of particular interest was the fact that her 360-degree feedback, conducted every six months in this organization, showed a sharp decline in scores over three administrations. The first area of note was a decline in scores related to relationships and interpersonal skills. No surprise. She had healthier lungs, but decreased social contact. As this organization used a “Derailers” section on their 360s, it was clear that interpersonal derailers such Arrogance were cited as detracting from her success.
In the second administration, scores related to factors such as communication and teamwork—generally those relating to working with others—also showed a marked decline. Finally, scores relating to trust and integrity fell, with no apparent reason or specific event to which these lower scores could be tied. Ultimately, she left the company under a mutual agreement and understanding. She was part of the out-group.
Now, there are likely other factors involved, and this non-scientific study involved a population size of “1” (and I’m certainly not saying we should all take up smoking in order to improve our relationships). However, a good deal of research, including LMX theory, supports the notion that our evaluation of another’s performance is largely dependent upon our relationship with that individual. And, while we may think we are being objective in that evaluation, the fact is that many of us, if even only in the far corners of our mind, makes a judgment call that is influenced by our relationship with the individual being evaluated.
So, looking to improve your 360-degree feedback scores? Need a better performance evaluation?
Many learned this tactic back in their early years of school. Our effectiveness in the eyes of our teachers, bosses, peers, subordinates, customers… you name it, can often be boiled down into (or at least be heavily influenced by) one word: relationships.
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