Lmx And 360 Degree Feedback

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Icing on the cake? Influence of LMX in an upward feedback program

Introduction

According to the leader-member exchange (LMX) theory, previously vertical dyad

linkage (VDL) model, organizational units are composed of dyads (leader and member pairs)

which are differentiated and vary in quality (Liden & Graen, 1980). In certain dyads,

subordinates (also called as in-group members or high-LMX members) share high-quality

exchanges with their leaders. These members accept greater job responsibility and contribute

more to their unit, largely due to the information, attention, and support they receive from the

supervisor (Graen & Schiemann, 1978; Liden & Graen, 1980). In others, subordinates (also

called as out-group members or low-LMX members) share low-quality exchanges with their

leaders. These members tend to complete tasks that are linked to their formal job duties and

not critical to the success of their unit, as they have been unable to obtain the required

information, attention, and support from the supervisor (Liden & Graen, 1980). A number of

studies have provided consistent support for the LMX model, associating the quality of

leader-member exchanges to important organizational outcomes such as job satisfaction,

turnover, and performance (for a review of such studies, see Graen & Uhl-Bien, 1995).

Although, previous literature has linked LMX to downward feedback (also called

performance ratings) (for e.g., DeConinck, 2011; Duarte, Goodson, & Klich, 1994; Wayne,

Shore, Bommer, & Tetrick, 2002; Wayne, Shore, & Liden, 1997), with results largely

supporting the view that LMX relationships are associated with the performance ratings

obtained by the subordinate, to my best knowledge, there have been no attempts by previous

studies to link LMX relationships to the ratings provided by the subordinate to the supervisor.

This is surprising because managing subordinates is a key task for the supervisor to deliver

results and therefore the subordinate’s perspective on the supervisor’s strengths and

weaknesses may be important in deciding the final results obtained by the group (Bernardin,

1986; Smither, et al., 1995; Atwater, Roush, & Fischthal, 1995). But, what if high-LMX

subordinates are more concerned with maintaining the relationship with their supervisor at

the cost of achieving group goals? Previous research has demonstrated that they are keen on

doing favors for the supervisors (Wayne et al., 1997). In such a case, shouldn’t their

perspective (through the upward feedback ratings) be sugar coated and thus their ratings not

really reflect the actual behavior of the supervisor? Shouldn’t this is more likely to take place

when the subordinates perceive that the supervisor holds substantial control over resources

and rewards? Similarly, what if low-LMX subordinates are more concerned with using this

upward feedback program as a golden opportunity to get even with the supervisor? Now,

many organizations today use 360 degrees feedback as tool to measure supervisor

performance and as input in key talent management decisions such as promotions,

participation in high-potential programs, development opportunities etc. (Atwater et al., 1995;

Brutus & London, 1999). Hence, shouldn’t low-LMX subordinates see this as a perfect

platform to dent a supervisor’s chances at moving up the corporate ladder?

Therefore, in this study, I examine how leader-subordinate relationships impact the

ratings given in an upward feedback program, given that leaders tend to develop

differentiated relationships. The research question guiding this study is– Is it possible for

leaders to enjoy higher upward feedback ratings by enhancing their LMX relationship with

their subordinates? In doing this, I believe I make two important contributions to research.

One, as suggested by Gooty and Yammarino (2013), previous literature on LMX has

essentially focused on subordinate outcomes, with little understanding whether it has a role to

play in leader outcomes. By examining LMX as an antecedent to a supervisor’s effectiveness,

I make an attempt to answer their call for further research in this direction. Second, this study

holds huge significance for organizations that are currently evaluating whether they should

jump on the 360 degree feedback bandwagon and serves as a warning to organizations that

are currently using a 360 degree feedback program for development purposes.

Preliminary Literature Review and Hypotheses

Leader-member exchange

LMX theory is different from other theories of leadership which essential assume that

leaders exhibit an ‘average leadership style’ i.e. leaders enact the same leadership style with

all subordinates in their units (Dansereau, Graen, & Haga, 1975; Liden & Graen, 1980).

However, as part of the Vertical dyad linkage model (later termed as Leader-member

exchange or LMX theory), Graen and his associates argued that vertical dyads in a work unit

differ in terms of the quality of exchanges (Graen, Cashman, Ginsburg, & Schiemann, 1977;

Graen & Uhl-Bien, 1995). While deciding which subordinates belong to the high-LMX

quality category, the supervisor tends to take into account the following criteria: (1) the

subordinate’s competence and skill, (2) the extent to whichthe subordinate can be trusted, and

(3) the subordinate’s motivation to assume greater responsibility within the group (Liden &

Graen, 1980). Previous research on LMX has indicated that developing a high-LMX

relationship is beneficial for the subordinates and leaders alike. Subordinates enjoying

excellent exchanges with their leader are generally satisfied with their jobs (Volmer, Niessen,

Spurk, Linz, & Abele, 2011), see lower turnover (Graen, Hoel, & Liden, 1982), and are more

likely to receive higher performance ratings (Duarte et al., 1994). Leaders, in turn, are likely

to have subordinates who are more willing to go beyond their formal role description and

help their co-workers (Deluga, 1994). However, there are two issues that still remain

unsolved. One, as indicated earlier, since high-LMX subordinates are likely to go beyond

their formal role description and help the leader, are they also likely to do the same in an

upward feedback program by providing high ratings? Two, how are low-LMX subordinates

likely to react to an upward feedback program? Subordinates in low-quality relationships,

over a period of time, have not received the attention of their leader (Liden & Graen, 1980).

The leader has continued to ignore them from important information, decisions, and

resources. Hence, will they vent their frustration on the supervisor or will they play safe

under fear that they may be singled out by the supervisor once the results are announced?

Upward feedback

Upward feedback is a process in which subordinates rate and provide feedback to a

supervisor in order to improve his or her behavior (Atwater et al., 1995; Walker & Smither,

1999). The popularity of upward feedback as a talent development tool has grown over the

last three decades for two reasons. First, there is a general agreement among leaders that their

subordinates are in a better position than others to evaluate certain aspects of their behavior

and, hence, they are much more receptive to feedback that they receive from their

subordinates than from their boss, except in the case where subordinate feedback is linked to

pay decisions by the organization (Antonioni, 1993; Bernardin, 1986; Bernardin, Dahmus, &

Redmon,1993; Tuckman & Oliver, 1968). Second, organizations are using the results of an

upward feedback program to evaluate the degree to which their managers have imbibed the

organization’s core values (Atwater et al., 1995; Smither, et al., 1995). But there have been

concerns raised over the efficacy of this talent management tool. For instance, Bernardin

(1986) put forward some key problems surrounding subordinate feedback such as the

possibility of gaming, the subordinate’s paranoia about telling the truth, the manager’s focus

on pleasing subordinates than achievement of goals, and the possibility that subordinates who

are pushed the hardest will rate the lowest. Moreover, subordinates fear the negative

consequences that are likely to follow, considering that leaders are in a position of power and

thus have control over actions such as hiring, rewarding, and firing (Antonioni, 1994).

Finally, as hinted by Atwater et al. (1995), some managers themselves may put the

credibililty of the upward feedback program in doubt by preferring feedback from a few

trusted subordinates than anonymous feedback aggregated across all subordinates. Such

individuals, by assigning ratings depending on the quality of relationships they develop with

their supervisor (LMX) than on actual observation of work performance, may undermine

even the most carefully delivered upward feedback program.

Leader-member exchange and upward feedback

As discussed earlier, it is not surprising to see that leaders have provided favorable

ratings to their high-LMX subordinates. Leaders and high-LMX subordinates agree on a host

of mutually experienced events (for e.g., member’s job problems, sensitivity of the supervisor

to the member’s job, and the degree of attention, information, and support) than leaders and

low-LMX subordinates do, largely due to the extensive interactions between leaders and

high-LMX members (Graen & Schiemann, 1978). It is therefore reasonable to expect they

would have a better and an adequate view of the high LMX subordinates’ strengths and

weaknesses than of their low-LMX subordinates. But I ask, “How does this scene play out

when the subordinates are put in the spotlight?” There are two ways possible in answering

this question.

One view would be that the leaders will enjoy higher upward feedback ratings by

developing high-LMX relationships. Adam Smith (1776) suggested that people through the

mode of exchange and barter obtain from the other the things they are in need of. This self-

interested behavior of subordinates and leaders was so clearly exemplified by Dunegan,

Duchon, and Uhl-Bien (1992; p. 71):

“Subordinates are only willing to invest additional time and effort if they believe they

will receive something of value in exchange. Similarly, leaders will only be motivated

to develop high quality relationships if subordinates are able to reciprocate with

something that is necessary for the leaders to perform their jobs successfully or if the

subordinates can offer something that is personally valued by leaders”.

Later, Barnard (1938), through the inducement contribution model, suggested that the

individual must be induced to cooperate in order to secure their cooperation.

“The net satisfactions which induce a man to contribute his efforts to an organization

result from the positive advantages as against disadvantages which are entailed. It

follows that a net advantage may be increased or a negative advantage made positive

either by increasing the number or strength of the positive inducements or by reducing

the number or strength of the disadvantages. It often occurs that the positive

advantages are few and meagre, but the burdens involved are also negligible, so that

there is a strong net advantage”.

“Hence from the viewpoint of the organization requiring or seeking contributions

from individuals, the problem of effective incentives may be either one of finding

positive incentives or of reducing or eliminating negative burdens” (Barnard, 1938; p.

140).

High LMX subordinates will be willing to cooperate (by providing high upward

feedback ratings in this case) because, as described by Wayne, Shore, and Liden (1997), both

leaders and subordinates stand to gain from doing so:

“In a high-quality exchange relationship, the employee would feel obligated not only