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The Leader-Member Exchange Theory or the Vertical Dyad Linkage Theory, explores how leaders and managers develop relationships with team members.

It explains how those relationships can either contribute to growth or hold people back." Leader-Exchange Theory focuses on the relationship that is created between managers and members of their teams." It states that all relationships between managers and subordinates go through three stages. These stages are: Role-Taking., Role-Making, and Routinization. Then the stages are divided into two groups: In-Group and Out-Group.

Team members in the In- Group proved their loyalty, trustworthy and skills that they have used in the group. The In-Group include team members that the manager trusts the most. Those in this group receives most of the managers attention. Managers provide challenging and interesting work, and offering opportunities for additional training and advancement.

Team members in this group share a similar personality and work-ethic to their manager. In-Group team members are often seen as rising stars and the manager trusts them to work and perform at a high level. Their work is classified as highly productivity, job satisfaction, and motivation.

On the other hand, the Out-Group team members betray the trust of the manager. They are known to be unmotivated and incompetent. Out-Group's work is often restricted and unchallenging. The Out-Group members tend to have less access to the manager. They often don't receive opportunities for growth or advancement. Team members of the out-group are supervised within the narrow limits of their formal employment contract. Even though the leader will provide support and assistance but will not go beyond such limits.

The Leader-Member Exchange Theory focuses on the relationship between a leader and each subordinate separately, rather than the relationship between the superior and the group. The relationship is different in quality.

In some cases, the same leader may have poor interpersonal relations with some subordinates. The leader can also have open and trust relations with team members. However, the relationship of both pairs can be of a predominantly in-group or out-group nature. It describes the dynamics of the relationships leaders form with each of their group subordinates. Although the theory gives useful insights on the factors that drive the relationships between leaders and subordinate group members, it also falls short in some notable ways.

Research states that leaders will support the members of the in-group and may go to the extent of inflating their ratings on poor performance as well. The Out-Group members never receives this type of kind treatment. Mainly because of the favoritism that the in-group members receive from their leaders. In essence, an in-group member is elevated to the unofficial role of "trusted lieutenant. The subordinate typically reciprocates with greater than required expenditures of time and effort, the assumption of greater responsibility, and commitment to the success of the organization."

The security staff members at my organization to me are the In-Group and Counselor staff members are Out-Group. To explain, security staff receives favoritism from higher authority when it comes to job performances and raises.

Just this past year, security staff was given a raise and praised for keeping the peace inside the prisons. When it comes to counseling staff, we are never given any rewards for our work well done. Security leaders look down on us as if we really don't make a difference in the prison system. Leaders put most of their trust in security staff versus counselors. We the higher authorities comes to visit our site, they only interact with security staff member only. Our organization is dealing with a lot of turnover rates due the In-Group and Out- Group.

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