Informal observation of leadership behavior suggests that leader’s action is not the same towards all subordinates. The importance of potential differences in this respect is brought into sharp focus by Graen’s leader-member exchange model, also known as the vertical dyad linkage theory. The theory views leadership as consisting of a number of dyadic relationships linking the leader with a follower. The quality of the relationship is reflected by the degree of mutual trust, loyalty, support, respect, and obligation.
According to the theory, leaders form different kinds of relationships with various groups of subordinates. One group, referred to as the in-group, is favored by the leader. Members of in-group receive considerably more attention from the leader and have more access to the organizational resources. By contrast, other subordinates fall into the out-group. These individuals are disfavored by the leader. As such, they receive fewer valued resources from their leaders.
Leaders distinguish between the in-group and out-group members on the basis of the perceived similarity with respect to personal characteristics, such as age, gender, or personality. A follower may also be granted an in-group status if the leader believes that person to be especially competent at performing his or her job. The relationship between leaders and followers follows three stages:
The LMX 7 scale assesses the degree to which leaders and followers have mutual respect for each other’s capabilities, feel a deepening sense of mutual trust, and have a sense of strong obligation to one another. Taken together, these dimensions determine the extent to which followers will be part of the leader’s in-group or out-group.
In-group followers tend to function as assistants or advisers and to have higher quality personalized exchanges with the leader than do out-group followers. These exchanges typically involve a leader’s emphasis on assignments to interesting tasks, delegation of important responsibilities, information sharing, and participation in the leader’s decisions, as well as special benefits, such as personal support and support and favorable work schedules.
Strengths of LMX Theory
Criticisms of LMX Theory
Implications
According to many studies conducted in this area, it has been found that leaders definitely do support the members of the in-group and may go to the extent of inflating their ratings on poor performance as well. This kind of a treatment is not given to the members of the out-group.
Due to the favoritism that the in-group members receive from their leaders, they are found to perform their jobs better and develop positive attitude towards their jobs in comparison to the members of the out-group. The job satisfaction of in-group members is high and they perform effectively on their jobs. They tend to receive more mentoring from their superiors which helps them in their careers. For these reasons, low attrition rate, increased salaries, and promotion rates are associated with the in-group members in comparison to that of the out-group members.
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The Six Types of Power for Leaders
To be an effective leader is to understand how to wield power and what it means when you do so. Being a leader is more than managing employees and tasks. Leadership is a skill. That skill requires both knowledge and practice to make it effective. The use of power is one of many tools at a leader's disposal. Power in itself is neither good nor bad as it is the wielder that determines if power is used to serve or to undermine a company's goals. Power is much more than simple confidence. It is a necessary tool for enacting change within your sphere of influence. If used effectively, the use of power will gain respect and achieve results. If used improperly, the misuse of power can hamstring an organization and lead to stagnation.
In the late 1950s, John French and Bertram Raven published “The bases of social power” which included five distinct types of power. They later added a sixth. All six of these types of power are part of the fundamental knowledge that all leaders must possess to be effective. Of course, it is not only leaders that possess power. Each of us has power and each of us has the power to choose how our power is used. Knowing what the types of power are and how they can be used (or abused) is important to our ability to make decisions that affect both our sphere of influence and our personal core values. Let us explore in detail the six types of power in order from least effective to most effective.
Coercive Power
Coercive Power is often the least effective but most employed (and abused) type of power in the corporate world.
Coercive Power is forcing someone to do something against their will or setting up “consequences” to employee actions.
Coercive leaders rely on threats, bullying, and “or-else” language to “motivate” those that are beneath them.
This type of behavior often leads to fear, dissatisfaction, and resentment.
Reward Power
Reward Power is another widely used method in business today. The results of Reward power are mixed and it is, therefore, the second weakest form of power.
Reward Power is the concept of doing this and get that. Or (said another way) if you do this, you will receive something in return.
Reward Power is useful as long as the reward is perceived as having value. Giving away a gold star or a gift card may be nice if it is something that is rare, but if over-used the effect may be weakened. In many cases, the employees begin to experience frustration when the reward does not grow larger. Other times, the reward can be taken for granted by the person giving the reward as just compensation for a task when the employee feels that the reward is not sufficient enough to compensate for the requested task. (Think of buying your department Pizza for the 5th time this week as a result of a poorly set customer expectation).
Reward power can also be used to increase morale. Think of giving a trophy to the highest performer or the team with the lowest amount of mistakes. If used well, This type of reward can become a highly sought-after status symbol within your organization.
Legitimate Power
Legitimate Power is in all organizations (Zappos Holacracy non-withstanding and maybe even then.)
Legitimate Power is the power of position or role. This is the typical “command and control” structure that is employed by the Military world.
Legitimate Power acts as a formalized way of ensuring that there is someone to make a decision (good or bad) and that someone is responsible. Legitimate power can seem arbitrary and when a person loses or changes positions or roles within a company, this type of power does not move with them. By itself, this power's ability to persuade and convince others is weak. However, when combined with the next three powers, Legitimate Power can be an excellent first step toward effective leadership.
Referent Power
Referent Power is the “cult of personality”. This is the power and ability of an individual to attract others and build loyalty within them.
Referent Power is also the power of respect. This can occur over time if a leader is successful and has a well-known track record of success.
Referent Power is also created through the values of the individual. Some folks are born with “It”. Others study leadership and develop themselves to be able to exercise this form of power effectively.
Informational Power
Informational Power is the newest addition to the types of power by French and Raven. Nonetheless, it is in the top 3 most effective types of power.
Informational Power is the power of having information that another does not have, or, the distribution of information as a means of effecting change. This could be positive or negative propaganda, knowledge of an opponent's strategy, or detailed information that is used in decision support (Think of how the Nielson ratings affect the price of a commercial).
Informational Power is in the possible use of information by persuading “by the numbers” or making up a “statistic” to manipulate opinions. (Some say that statistics are a precise and logical method for stating a half-truth, inaccurately).
Informational Power can be used to measure and improve tasks, processes, and strategies.
Expert Power
Closely related to Informational Power, Expert Power is when an individual possesses in-depth information, knowledge, or expertise in the area that they are responsible for. This type of power is often the most effective type of power. This is the Software Architect, the lead engineer, the CFO, CTO, Doctor, or other highly skilled and highly trained employees. Because the person has this high level of expertise, they can often persuade others to do things for them using trust and respect. This expertise and therefore this type of power are greatly valued in leadership roles.
Excellent leaders seek to use the most effective type of power at the correct time. They also seek others that understand how leadership and vision work in order to set up a framework for success. (The book Good to Great by Jim Collins provides many great examples as do the courses taught by Professor Michael A. Roberto).
Being familiar with the different types of power is an excellent addition to any leader's skill set. Employing power in conjunction with the values that you and your company ascribe to is the next logical step. A few excellent examples are Steven Covey’s 7 Habits of Highly successful people (Habits 1 and 2) and John Maxwell’s 21 Irrefutable Laws of Leadership (The Law of Influence and The Law of the Picture). Also, as of 2022, I'd add in Stephen M. R. Covey's The Speed of Trust.
John Prescott is a Technology Evangelist and a champion of leadership, teamwork, and professional growth in the workplace. Feel free to direct comments or suggestions via linkedin.
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