Leader–Member Exchange (LMX)
Quality dyadic relationships drive engagement and performance.
Explanation
Research shows that leaders naturally develop different quality relationships with different team members. Some people become part of the 'in-group' with high trust, challenging assignments, and frequent communication. Others remain in the 'out-group' with basic, transactional relationships. While this might seem unfair, it's natural—and the quality of these relationships strongly predicts performance and retention.
Real-World Example
Same leader, two employees. One gets challenging projects, mentoring, flexibility (high-LMX). Other gets routine tasks, standard rules (low-LMX). Guess who performs better, stays longer, gets promoted? Not about favoritism—about relationship investment.
How to Apply
Assess your LMX with each member. Who's in-group? Out-group? Why? Invest in low-LMX relationships: More 1:1 time, understand their goals, give stretch assignments, share more context. But maintain standards—high-LMX is earned through performance + trust.