The LMX model often assumes that the only reason behind the differential treatment of employees is because of an unconscious categorization into an in-group and out-group which then impacts an employee’s performance. As a result, it suggests leaders need to give all their employees the same opportunities and responsibilities. However, it could be that leaders group their employees based on more than just personal preferences, and instead, that their categorization reflects the employees’ individual abilities. Not every employee is hard-working and trustworthy, so managers are sometimes warranted in reserving important tasks to a select group of employees.2
Moreover, although the LMX model is adamant that during the role-taking and role-making stages, an employee becomes categorized into one of two groups, it is unclear which factors influence the categorization process. Additionally, the model does not provide insight into how leaders or employees can ensure to forge meaningful relationships which would be valuable insight considering these relationships are presented as the largest determinant of employee satisfaction and wellbeing.6
Although the LMX model focuses on a two-way relationship, it often leads to behavior change suggestions for the manager, not the employee. Behavior recommendations for employees who seek to improve their relationships with their bosses could be extremely useful and still need further research.
LMX and Diversity
Diversity within a team can be beneficial; studies have attributed diversity as a cause behind improved performance and better decision-making. However, diversity, especially racial diversity, can also be a point of conflict. Sport-specific studies have found that individuals of a different race than the majority of their group are often less connected to the team and less satisfied.7 The leadership exchange theory, which suggests that developing trust and a close relationship can lead to improved performance, could mitigate the negative impacts of conflict that potentially arise due to diversity.
Sam Todd, professor of Sports and Entertainment Management at the University of South Carolina, developed a case study based on the real life experiences of a field ground crew, in order to see how LMX influenced group behavior.7 A field manager, Lonnie, needs to lead a crew that works well together to achieve a functioning and aesthetic field. Her success will depend on the interplay between diversity issues as well as her own management style.
Lonnie hired Christy, an individual with turf management experience that differs from her own experience. The two debate on a number of topics, which ends up being productive as their different perspectives allow them to figure out the optimal decision. Lonnie also hires Elberto, who has similar experience to Christy but has demographic diversity. Lonnie and Christy get along well and have a high quality LMX relationship. That causes Christy to love her job, support Lonnie, and put in 100% effort in every task. Lonnie and Christy develop trust and a mutually beneficial reciprocal exchange relationship. Lonnie and Christy even become friends. However, while the strong LMX relationship initially results in increased productivity, there are also some negative outcomes that arise later on.
Lonnie comes to expect more from Christy, which causes Christy to have high expectations for herself and feel pressured to not let Lonnie down. The added pressure can increase stress, which could make Christy lose some passion for her job. If she becomes less satisfied, her productivity may decrease.7
On the other hand, Elberto has a low quality LMX relationship with Lonnie. She does not trust him, which results in him doing the bare minimum to complete his tasks and never being asked to take on greater responsibility. Elberto has no interest in participating in team activities outside the workplace. Although he may not enjoy a close relationship with his manager, Elberto does not have the added burden of Lonnie’s high expectations. He may not be as productive as Lonnie in the short-run, but will not get burned out as a result of being overworked and stressed.7
As this study shows, both diversity and LMX relationships can have both positive and negative influences on productivity and job satisfaction. While job-related diversity can often be constructive (as is the case of Lonnie and Christy), demographic diversity can often be destructive (as is shown as in the case of Elberto and Christy).
As the study shows, while forming close and trusting relationships can lead to greater productivity, favoritism can also place extra stress on an individual. When the lines between employee and manager cross over into friendship, it can be difficult to define boundaries. Todd’s case study reflects previous research conducted by Kenneth Harris and Michele Kacmar that showed the correlation between the relationship and stress follows a U-shape.
In their 2006 article “Too much of a good thing: The curvilinear effect of leader-member exchange on stress,” the pair identified that although usually, as the quality of a LMX relationship increases, so do the advantages, there comes a point where the relationship becomes too close and leads to negative effects.7