Arguments on the application of the leader-member exchange theory in Australia stem from the Karpin 1995 Report that presented the findings of a task force designed to investigate the quality of leadership in Australian organizations. The report indicated that there were existing gaps between capabilities and best practices in most sectors in the country. This is because most Australian firms were applying the traditional strategic approaches for managing the workforce while failing to acknowledge that the nature of the workplace is changing and thus the need for management theories to similarly evolve (Karpin 1995, p. 4). The leader-member exchange theory allows development of manager-employee relationships that lead to increased knowledge and access to resources that support the kind of job that the employee is engaging in (Bolino & Turnley 2009, p. 281). This is because employees reciprocate to any positive elements that they receive from the organization thus improving organizational effectiveness. Therefore, the theory is based on the way management values the employees as a way of making them more productive. Thus, the leader-member exchange theory is a new management approach that seeks to improve management of people in organizations through moving away from the traditional leadership style and developing approaches that allow exchange between the employee and the organization.
Table one: servant leadership
An example of a servant leader that I know is Albert Schweitzer who devoted his life in sacrificing and assisting people through showing the best leadership style that he had.
|
Characteristics |
High LMX |
Low LMX |
|
Leader 1 |
Mutual trust, respect and obligation |
Limited trust |
|
Leader 2 |
Better communication with employees |
Poor communication |
|
Leader 3 |
Well defined jobs that increase commitment |
Poorly defined jobs |
The leadership member exchange theory is based on the leader conveying role expectations and that meet the needs of employees. The theory is established on the premise that there is a reciprocal relationship that exists between the leader and the follower thus increasing the outcomes of role negotiation which define the quality and maturity of the exchange that takes place in the organization. Wang, Law, Wang & Chen (2005, p. 421) article presents a leader-member exchange model through a sample of 162 leader-follower dyads in China. This article presents how leader exchange theory-mediated in the organization, through the task performing employee, the work engaged or job performing employee and
According to Brunetto, shacklock, Teo & Farr-Whaton (2014, p. 5) the task performing employee benefits from this theory through the formal authority and allocation standards that benefit the organization in return to performance. This implies that social exchange is moved to a higher level obligation. The employee, on the other hand, receives special privileges that enhance performance in the organization. This means that there is a social exchange between the follower and the leader as a means of fulfilling the obligations assigned in the task (Breevaart, Bakker, Demerouti & Heuvel 2015, p. 762). The leader has unique social exchange relationships with the followers that define the quality of the relationship thus increasing task performance. Task performance is thus achieved through the relationship formed between the leader and the employee. Lee, Thomas, Martin & Guillaume (2017, p. 3) adds that the role of the leader is to influence intended outcomes in the employee through developing social exchange relationships that increase task performance. The nature of leadership style that the leader uses is important in determining the exchanges that take place. This means that through reciprocating in the relationship, the leader meets the job demands that the task performing employee requires to perform better. Through resources like information, job autonomy and the opportunity to participate in the decision-making process. On the other hand, the leader has high expectations that they derive from the employee through the leader-member exchange relationship.
In addition to that, the organization citizen behavior employee benefits from the leader-member exchange process by developing relationship obligations that diffuse into the organization. This means that organizational behavior is developed through the positive association between the leader and the subordinates inform of an exchange currency that defines the benefits that the employee receives. The role of the leader is to foster high-order social exchanges. Further, Yukl & Michel (2006, p. 87) suggests that managerial effectiveness is the ability of the leader to carry out leadership activities and implement decisions depends on the tactics that the agent uses. This means that leaders have proactive influences that the use to manage employees. This means that the leader-member exchange theory involves the role making process between the leader and follower in a reciprocal relationship of social exchange that develops as the two interact. This means that the leader seeks to develop control over the employee thus creating better results for the organization. The outcome of controlled employees is a positive organizational culture that develops relationships between the leaders the employee and the organization. According to Story, Youssef, Luthans, Barbuto & Bovaird (2013, p. 2541), mmotivation theorists argue that the leader social-exchange theory can be used to foster motivation by creating intrinsic conditions that make the work environment more appealing to employees. The outcome is increased employee satisfaction thus leading to better conditions for employees to thrive in.
Therefore, the role of the leader-member exchange theory in the organization is to increase collaboration between the two levels of the organization. By applying the strategies of the theory, leaders create conditions that allow employees to thrive while at the same time increase collaboration which leads to increased results. This means that collaboration is achieved when there is increased leader-member exchange relationship that is developed when the organization provides appropriate resources for the leader to thrive in. thus inspirational appeals are created in employees which create motivation that determines how employees benefit from organizational processes (Yukl & Michel 2006, p. 89). The leader creates high sacrifice abilities in employees that reduce the risk of failure thus delivering more results to the organization as compared to other models of organization management. This theory has been highly applied in modern management because it creates good conditions for both the leader and the member in an exchange relationship that improves the organizational environment. Thus the role of the leader in such relationships is to influence the desired behavior through organizational culture and behavior that increases task performance.
My leadership style is servant leadership which entails a power-sharing model of authority that seeks to prioritize the needs of the members and at the same time applying collective decision-making. This leadership style is based on the need to serve others through the conscious choice of leading others without the drive for power or authority. This means that my leadership style is based on the servant-first approach where I seek to make sure that other people’s highest priorities are met always before my own needs come in (Lyubomirsky 2007, p. 15). By being a servant leader, my main focus is the growth and well-being of others through sharing power and helping people develop and become highly effective. This leadership style is good since it leads to increased growth of subordinates which in turn lead to organizational growth through commitment and engaged employees. The outcome of servant leadership is the transfer of leadership abilities from the leader to servants which increases employee participation in organizational processes (Luthans & Youssef 2007, p. 331). With this leadership style, there is increased individual goal achievement and success through building on the skills that employees have. Thus servant leaders motivate employees to achieve goals through empowerment which creates a positive effect on the employee through motivation success and growth.
Parris & Peachey (2012, p. 382) adds that this leadership style also increases the psychological health of the people I work with. This is because decisions are shared with other employees while at the same time ensuring that employees are assimilated in the organization. According to research, the servant leadership uses the bottom-up approach to prioritize the needs of employees thus making them more engaged through community citizen behavior that improves their psychological well-being. Maslow’s hierarchy of needs suggests that employees have varying needs that they seek to achieve in the organization which grows as they advance up the career ladder. This means that employees who engage well with the leaders have better psychological health since they have their self-esteem solved by management.
Linuesa-Langreo, Ruiz-Palomino & Elche-Hortelano (2017, p. 4) states that the servant leader relates with employees at a level that goes beyond personal by involving them in decision making in the organization. This means that as a leader, I relate with employees rather than act like I am above them or superior to them. Since this approach is based on a bottom-up approach, then it means that the leader has to find ways of working with employees through involving them in different decision situations in the organization. The reason for choosing the servant leadership style is the fact that it creates better conditions for the employees to work with which makes it easy for them to interact with me as their leader while at the same time create better conditions that lead to increased satisfaction. To increase employee performance, employees work better with the servant leadership style since it makes them feel like they are cared for when the leaders show significant interest in others. thus as a leader with servant leadership abilities, I put the needs of the people that I serve first rather than depicting myself as their superior by exemplifying leadership qualities.
From my analysis of the relations that I have with the people I lead, they view me as a caring leader who develops an environment that meets their needs. The servant leadership style makes me look caring and one who puts the needs of the people first. Through the servant leadership style, I am able to meet the needs of the employees since they feel appreciated and cared for at all times. The leadership style uses a bottom-up approach that allows employees to participate in decision making at the organizational level (Rodríguez-Carvajal, Herrero, Van Dierendonck, De Rivas, & Moreno-Jiménez 2018, p. 291). Therefore, as a servant leader, I am viewed as the one who puts the needs of the people I serve first since through involving them in decision making, I am able to easily meet the needs of the people I work with.
Reed, Vidaver-Cohen & Colwell (2011, p. 421) argUe that, one challenge with this leadership style is the problem of balancing between the needs of the organization and those of the people I serve. This means that I have to work on the decision making approaches that I use to ensure that I am able to balance the needs of the organization and those of subordinates. This means that when dealing with employee related issues, I have to learn how to tailor them to meet the needs of the organization. For example, this can entail borrowing from the aspects of the leader-member exchange theory to increase organizational outcomes. Leaders need to understand how to approach different situations and how to weigh the existing options to pick the best that reflects the needs of the organization while at the same time considering the needs of employees.
Since the servant leadership style works against the traditional authority of managing organizations, then the leader needs to improve on ways of ensuring that absolute authority is not lost. Through limited managerial authority, this approach makes it difficult for management to motivate employees since most decisions rest in the subordinates (Liden, Wayne, Zhao & Henderson 2008, p. 189). This means that as a servant leader, I have to earn ways of motivating employees by understanding how to make work conditions better for employees. If this area can be improved, then work conditions can be better and employees can be highly effective.
Conclusion
The leader-member exchange theory seeks to create conditions that allow social exchange between the leader and employees that create conditions economic and social exchanges that lead to reciprocating relationships. This means that the leader creates conditions that increase job performance through increased employee expectations. This theory thus creates better conditions that meet the needs of the organization. By applying this theory, the leader understands the requirements of the organization thus making employees more productive. This theory works in any work condition and can be tailored with my servant leadership ability to improve the ability of the leader to meet the needs of the organization while at the same time creating better conditions for employees to thrive.
References
Bolino M & Turnley W 2009, ‘Relative deprivation among employees in lower-quality leader-member exchange relationships’, The Leadership Quarterly, 20(3), pp. 276-286.
Breevaart K, Bakker AB, Demerouti E & Heuvel MD 2015, ‘Leader-member exchange, work engagement, and job performance’, Journal of Managerial Psychology, 30(7), pp. 754 – 770.
Brunetto Y, Shacklock K, Teo S & Farr-Wharton R 2014, ‘The impact of management on the engagement and well-being of high emotional labour employees’, The International Journal of Human Resource Management, 4(3), pp. 1-21.
Karpin D 1995, Enterprising nation: Renewing australia’s managers to meet the challenges of the Asia-Pacific century, Canberra, Australian Government.
Lee A, Thomas G, Martin R & Guillaume Y 2017, ‘Leader-Member Exchange (LMX) Ambivalence and Task Performance: The Cross-Domain Buffering Role of Social Support’, Journal of Management, 1(1), pp. 1-15.
Liden RC, Wayne SJ, Zhao H & Henderson D 2008, ‘Servant leadership: Development of a multidimensional measure and multi-level assessment’, The Leadership Quarterly, 19(2), p. 161–177.
Linuesa-Langreo J, Ruiz-Palomino P & Elche-Hortelano D 2017, ‘New Strategies in the New Millennium: Servant Leadership As Enhancer of Service Climate and Customer Service Performance’, Frontiers in Psychology, 8(786).
Luthans F & Youssef C 2007, ‘Emerging Positive Organizational Behavior’, Journal of Management,, Volume 33, p. 321–349.
Lyubomirsky S 2007, The How of Happiness: A New Approach to Getting the Life You Want, New York, Penguin.
Parris DL & Peachey JW2012, ‘A Systematic Literature Review of Servant Leadership Theory in Organizational Contexts’. Journal of Business Ethics, 113(3), p. 377–393.
Reed LL., Vidaver-Cohen D & Colwell SR 2011, ‘A New Scale to Measure Executive Servant Leadership: Development, Analysis, and Implications for Research’, Journal of Business Ethics, 101(3), p. 415–434.
Rodríguez-Carvajal, R, Herrero M, Van-Dierendonck D, De Rivas S, Moreno-Jiménez B 2018 ‘Servant Leadership and Goal Attainment Through Meaningful Life and Vitality: A Diary Study’ Journal of Happiness Studies, 137(2), p. 285–297.
Story JSP, Youssef CM, Luthans F & Barbuto JE 2013, ‘Contagion effect of global leaders’ positive psychological capital on followers: does distance and quality of relationship matter?’, The International Journal of Human Resource Management, 24(13), pp. 2534-2553.
Wang, H, Law KS, Hackett RD, Wang D, Chen ZC 2005, ‘Leader-member exchange as a mediator of the relationship between transformational leadership and followers’ performance and organizational citizenship behavior’, Academy of Management Journal, 48(3), pp. 420-432.
Yukl, G. & Michel, J. W., 2006. Proactive Influence Tactics and Leader Member Exchange. In: Power and influence in organizations: New empirical and theoretical perspectives. Greenwich: Sage Publishing.
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