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Academic Insight: How LMX Can Help Businesses Recruit And Retain Employees

Shontarius D. Aikens

I’m a huge college football fan. And I love to follow the early signing period for college football teams across the country. During the most recent early signing period, one of the nation’s top college football recruiters was asked a question during a press conference about why he was so good at recruiting. His response:  “Well, I am just who I am. I hope I’m brutally honest and direct to the point.  he whole thing about it is that we try to recruit so hard that it’s almost impossible and to have that relationship that they just can’t tell you ‘no.’” I found this statement intriguing, because there are similarities between the recruiter’s quote and the findings of the 2015 State of the American Manager report published by the Gallup Corporation:  “Great managers build relationships that create trust, open dialogue, and full transparency.”  

Recruiting talented employees is one thing; retaining them is another. I think the key to doing both well lies with a manager’s ability to build good working relationships with employees.  Throughout my career, I have seen how work relationships with both great managers and bad managers affected individual employees and the organizations as a whole, sometimes for the better and sometimes for the worst.  And because of those experiences, this was a motivating factor for me when selecting a topic for my dissertation — Leader-Member Exchange (LMX) — and how that concept could make a positive difference in organizations. If you are a manager in the local Fargo-Moorhead area looking for a way to develop a sustainable competitive advantage when it comes to your recruiting and retention efforts, I hope this information will be beneficial to you and your organization. 

What is LMX?

LMX is a concept that examines leadership based on the quality of the relationship between a supervisor (manager) and a subordinate (employee).  A few essential points to understand:

  • 1 to 1 relationships (or dyads).  Instead of focusing on the overall relationship that a manager has with all the employees in their scope of authority, LMX focuses on the relationship quality between the manager and each employee in their scope of authority.  For example, if a manager has 5 direct reports, there would be 5 manager-employee relationships, or dyads, that would be evaluated.
  • Each manager-employee relationship (or dyad) is unique and different in terms of quality. The quality of a manager-employee relationship can range from being classified as high quality (“mutual trust, respect, liking”) or low quality (“low trust”).
  • In-Groups and Out-Groups. Employees within a manager’s scope of authority can be put into groups based on their relationship quality with the manager.  Employees that have high quality relationships with their manager are considered to be in their managers’ In Group. Employees with a low quality relationship with their manager would be considered part of their manager’s Out-Group.

Since every manager-employee relationship is different in terms of relationship quality, the ultimate goal is for a manager to build a strong positive high quality relationship with every employee in their scope of authority.

What makes up LMX, or relationship quality?

While there are several inventories created by academic scholars to measure LMX, or relationship quality, my favorite is the LMX-MDM inventory, because it describes relationship quality using four different dimensions, or components:

  • Affect: Interpersonal attraction based on friendship, rather than work or professional values.
  • Loyalty: Expressing support for the goals and defending the personal character of the other person.
  • Contribution: Willingness to go above and beyond what is required for work activities.
  • Professional Respect: One’s internal and external reputation of excellence, professional skills and experience in their line of work.

Using the LMX-MDM framework to describe work relationships is beneficial for two reasons.  First, it can help a manager understand the complexity and the makeup of existing manager-employee relationships. For example, some manager-employee relationships could be based on one dimension (100% Professional Respect), while others could be based on more than one dimension (75% Professional Respect; 25% Affect). Understanding and being able to describe the foundation of a current working relationship is an important starting point for improving that manager-employee relationship if needed. Second, it gives a manager a mental model for developing future manager-employee relationships. A mental model is simply a representation of something real, hypothetical, or an imaginary situation. Mental models are important, because by shaping what a person sees or looks for, it affects and influences what a person will do.  It also enables individuals to make decisions and take actions on events and situations that could occur in the future. So in this case, managers can use this LMX-MDM framework to determine the best ways to develop initial manager-employee relationships with future employees.

Why would LMX concepts be beneficial to my organization?

Are the following organizational outcomes important to your organization?

  • Employee Job Satisfaction 
  • Employee Commitment 
  • Reducing Employee Turnover
  • Overall Employee Satisfaction 
  • Organizational Citizenship Behaviors 
  • Organizational Commitment 
  • Job Performance 

If you circled one or more of these items, then understanding LMX would be beneficial to your organization.  Why?  Because over the years, LMX researchers have consistently found positive correlations between LMX and organizational outcomes on this list.  In other words, when the manager-employee relationship quality improved, so did the organizational outcomes.

How can I use LMX leadership theory concepts and principles in the workplace?

Below is a template I created that managers can use to start examining the quality of relationships in their scope of authority. (Note: The blank lines represent a place for the manager to include the name of their employee, or direct report):

  1. What is the quality of my current relationship with _________?:  Using a scale of 1-10, with 10 being the highest quality, rate the overall quality of the relationship based on the manager’s perspective. Be sure to jot down notes and comments for the rating.
  2. When considering the different dimensions of a relationship (Affect, Loyalty, Contribution, Professional Respect), what is the makeup of my current relationship with _________?  Which dimension(s) are present?:  Determine which dimension(s) best describe this relationship from the manager’s perspective. It is possible that two or more dimensions could be present.
  3. Would _________ agree with my description of our relationship?: The first two questions examine the relationship from the manager’s perspective. The third question considers that the employee may have a different perspective than the manager. Best practices suggests examining manager-employee relationship quality from both the leader’s and the follower’s perspectives. In order to accomplish this, a manager could ask each employee to complete the first two questions on their own. Then, comparing the responses of the manager and the employee would identify any similarities or differences in order to more accurately understand the manager-employee relationship quality holistically.



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