Rosetta Stone and LMX Theory

According to Northouse (2016), Leader-Member Exchange Theory focuses on the relationship between leaders and members. Those who go above and beyond the scope of their job duties become members of the leader's in-group and are more likely to get their additional support. Those who stay strictly within their job duties are members of the out-group and only get the support required by the job. 

My partner, Alfonso, works for Rosetta Stone in their Global Order Processing division. During the third quarter of the 2016 fiscal year, the company laid off a large number of employees in their international and Arlington offices and reorganized some divisions. In the final quarter of FY2016, his division had a meeting about their ordering processing errors. During the company reorganization, leadership decided to put more focus on quality control. As such, during the meeting, the three team leads discussed the division’s error rate and the leadership’s desire for an overall error rate of 5%. At the time, the division’s rate was 16%, while Alfonso’s was 11%.

When an employee finishes an order, a copy is sent to the team leads. Part of their duty is to review them and catch any errors. To meet the division goal, each quarter, team leads now meet with each employee to discuss their errors for improvement in the next quarter. Though Alfonso knew that his error rate was now down to 8%, he recognized that he still had improvements to make. Before his meeting, he took two hours out of his day to review every case, take notes, and make a list of questions. When he entered the meeting, his supervisors were pleasantly surprised by the amount of preparation put in. They complimented his work and suggested that the other employees do the same.

Because of cases like this, Alfonso has become one of the in-group members for the team leads, while conversely, some of the other employees are members of the out-group. 

By understanding LMX Theory, we can better understand the dynamic s between leaders and followers. For leaders, this can be a revelation of how they subconsciously group their followers and can help them to counteract that. For followers, this can help them understand how to improve their standing with the leaders of their organizations.