Path-goal and Leader-member Exchange Theories

PATH-GOAL AND LEADER-MEMBER EXCHANGE THEORIES

This paper will explore the path-goal theory and the leader-member exchange theory.  It will begin by defining the path-goal theory, and then move into sharing strengths and criticisms, while providing contextual examples.  These real-life experiences are included to support the reader in better identifying situations in which the theory might apply.  Following the discussion of the path-goal theory, a description of the leader-member exchange theory will include the same components listed above.  The paper will conclude with a synopsis of each theory.

The path-goal leadership model is focused on the motivational factors of subordinates; those closest to the work, as they tend to have influence on outcomes.  It is the first leadership model to emphasize motivational factors from subordinates’ perspective.  Martin Evans introduced the theory in 1970, while trying to explain anomalies found in studies related to people vs. task concerning leadership styles.  House updated the theory in 1971 and 1996.  The theory rests on Vroom’s 1964 expectancy theory which states, “an individual cognitively determines his motivation based on the amount of effort required, the rewards or returns of the effort and the importance the individual gives to the rewards” (Path Goal Leadership Ashim Gupta).

The path-goal theory simply defines the role of the leader as one who defines the goal and conveys the course for subordinates to reach the defined goal.  A streamlined process for implementing the path-goal theory might be to: 1) determine the employee and environmental characteristics; 2) based on the findings in #1, select a leadership style; and 3) focus on motivational factors that will help subordinates be successful.  This model professes that subordinates’ satisfaction, motivation and belief in their own capabilities, can be increased by clarifying paths, offering rewards for achievement, removing obstacles and increasing opportunities for personal satisfaction.  A key to path-goal leadership is having an awareness of the elements represented in subordinates’ work environment so that leaders might focus on those elements that are missing.  It is through the interaction of employee and environment characteristics, the appropriate leadership behaviors, and the focus on motivational factors that employee satisfaction and productivity can be maximized.

Initially there were four types of leadership behaviors that explained the path-goal journey: 1) Directive – setting clear objectives and rules for subordinates; 2) Supportive – catering to the needs/desires of subordinates; 3) Participative – encouraging subordinate participation in decision making; and 4) Achievement Oriented – leaders setting challenging goals and encouraging high performance while showing confidence in subordinates’ abilities (Path-Goal Theory Leadership Theory pg 732-733).  An example of directive behaviors might be sharing the company policy for purchasing equipment. Along with the shared policy, is the articulated expectation of adherence to the policy and consequences of not doing so.  For my team, supportive behaviors typically begin with focus groups or team brainstorming to learn more about the desires of the team, and after leadership reflection, addressing some of the identified needs/desires.    House went on to expand the behaviors by adding seven more: 1) Clarify – performance goals and the means to achieve goals; how the outcome will be judged; and rewards for performance; 2) Work Facilitation – clears obstacles; 3) Interaction Facilitation – collaborating to remove obstacles that prevent interaction; 4) Group Oriented Decision Processes – focus on decisions that affect group dynamics; 5) Representation & Networking – network and actively represent the work group; 6) Value-based – appeals to values and sentiment held dear to subordinates; and 7) Shared Leadership – sharing leadership increases unit cohesiveness and performance.

A strength of the path goal theory is that it can support leaders in better understanding subordinate needs, and over time, come to understand and capitalize on patterns in the relationship between leadership styles and productivity.  The theory is clear and practical in defining the role for the leader, and it combines work from the situational and contingency leadership theories with the expectancy theory.  A criticism of the theory is that research support is incomplete.  The theory consists of many parameters and the need to analyze the many parameters in order to make a leadership style choice.  While the role of the leader is clear, it is challenging to analyze the various components in real-world situations.  Further, a greater responsibility lies with leadership, making subordinates more dependent on leaders.

The leader member exchange theory was introduced by George Graen and colleagues in the mid 1970s.  It is a relationship based approach to leadership that focuses on the relationship that develops between managers and members of the team. This theory explains why leaders often have “go-to” people on their team.  It was originally based on role theory and initially referred to as a vertical dyad linkage model of leadership.  The core concept is that leaders do not develop the same type of relationship with all subordinates.  Further, research supports that different relationships are developed between leaders and subordinates because leaders have limited time and social resources.  The theory proposes that the quality of the relationship between the leader and members has a major impact on attitudes and behaviors of both parties in the dyad (pgs. 429-433).  Simply stated, the theory states that all leader-member relationships go through three stages: 1) role taking, when the leader assesses the skills and abilities of the employee; 2) role making, when the leader sorts members into two groups – in-group (those that are trusted and work unrestricted) and out-group (those with less access to leadership and restricted work); 3) routinization, building routines between managers and members.  While early studies described the in-group and out-group, later studies suggested a continuum of relative quality ranging from low to high. Unlike the complexities in analyzing the many parameters in the path-goal theory, the LMX-MDM, a 12-item measure, was developed to capture the multidimensional nature of the theory.  The in-group and out-group exemplified is the staff development team’s still “go-to” person, and the range of low-quality to high-quality leader-member exchanges.  Although all team members were required to have weekly one-on-ones and shared the same title and pay level, when the director was not available, all inquiries for support were sent to one specific person on the team.  The staff knew the employee’s work ethic, trusted her professionalism and knowledge.  This individual spoke daily with the director unlike a few other members who only had access to the leader during the one-on-ones.

The more recent studies applied the social exchange theory to understanding leader member exchange.  It describes two types of exchanges:  1) social – characterized by unspecified obligations; trust and interpersonal attachment; and 2) economic – characterized by specific, discrete and tangible transactions.  It suggested that high quality exchanges are based on social exchange and low-quality exchange is based on economic exchanges.  The theory proposes that high quality exchange relationships are desired by team members because the relationships are characterized by mutual respect, trust and reciprocal influence.  However, some low-quality exchanges are assumed to be undesirable, whereas there may be times when a low-quality exchange is preferred.  There are four dimensions of the theory: 1) contribution; 2) affect or liking; 3) loyalty; and 4) professional respect.  Research attitudinal outcomes revealed the leader member exchange is significantly related to organizational commitment; supervisor pay; and job satisfaction.  Work environment perceptions have also been linked to the theory.

A major strength of the leader-member exchange theory is that empirical research provides strong support for the role of leader member exchange theory on member perceptions, attitudes, behaviors and career outcomes such as desirable assignments, promotion and salaries. Findings also included that quality exchanges tended to be stable over time; exchanges were observable – members of the work group recognized high quality exchanges and low-quality exchanges; and relationships are formed fairly quickly. Support was found for positive exchange and member perceptions of justice, empowerment and engagement while reversely, a negative association was found between exchanges and member perception of politics, role ambiguity and role conflict.  Situational leadership asserts that if leaders adapt their leadership styles to complement the development of the employees, the outcomes should be maximized.  This was not found to be true in practice as leadership continued to focus on their own goals vs. the goals of subordinates (the goal being the reward for completion).  Future research is needed on context and how it interacts with other factors in the leader-member exchange theory.

The path-goal theory combines and expands previous work such as the situation and contingency leadership and expectancy theory.  It is the first to focus on motivational factors from the perspective of subordinates.  The importance of clarity is emphasized; clarity in defining goals, the route to achieving the goals and the reward for achievement.   At its core, the leader-member exchange theory speaks to how and why organizations cultivate and depend on “go-to” people.  It emphasizes that leaders do not develop the same type of relationship with all subordinates and the different characteristics one might find in low-quality vs. high-quality exchanges.  Just as a leader must be flexible in responding to the day’s events, knowing when to utilize different parts of each of the theories may be the best support for leadership.

References

• English, F.W. (2006).  Encyclopedia of educational leadership and administration.  Thousand Oaks, Calif: SAGE Publications, Inc. Path Goal Leadership Theory (pp. 732-733)
• Gupta, A. (n.d.). Path Goal Leadership. Retrieved from    http://www.practicalmanagement.com/Leadership-Development/Path-Goal-Leadership.html
• House, R. J. (1996).  Path-goal theory of leadership: Lessons, legacy, and a reformulated theory. The Leadership Quarterly, 7(3), 323-352.
• Rogelberg, S.G. (2007). Encyclopedia of Industrial and organizational psychology.  Thousand Oaks, CA: SAGE Publications, Inc. Path-Goal Theory (pp.595-597)
• The Leader-Member Exchange Theory: Getting the Best From all Team Members, (n.d.).  Retrieved from https://www.mindtools.com/pages/article/leader-member-exchange.htm