LEADERSHIP CHAP10PP

CHAPTER TEN
BUILDING SOCIAL
EXCHANGES AND
FAIRNESS

© Prentice Hall 2006

10-1


Learning Objectives
After reading this chapter, you should be able to
do the following:








Describe and provide examples of leader
behaviors that build social exchanges with
followers.
Explain why effective leaders’ social exchange
behaviors can have a positive influence on
individual and group performance.
Describe how to develop and maintain effective
leader-member exchanges.
Describe the skills, traits and sources of power
that help leaders build effective social exchanges

with followers.
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10-2


Learning Objectives (cont.)
After reading this chapter, you should be able to
do the following:








Identify situational factors that enhance,
neutralize, or substitute for leader exchange
behaviors.
Describe and give examples of three types of
organizational justice that are important to
followers.
Identify behaviors used by leaders to maintain
organizational justice.
Describe the effects of leaders’ exchange
behaviors.

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Leaders’ Social Exchange
Behaviors
Behaviors that define followers’
and leaders’ roles and obligations
in relation to one another as they
work to achieve group and
organizational goals.

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Role making
• Roles are standard or repeated
patterns of behavior that often become
expected or required of a person in a
specific functional relationship.
• Roles in organizations are partially
specified by job descriptions and are
more completely defined by the
interactions of leaders and followers
• Followers also have expectations of
their leaders.

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10-5


Ingroups and Outgroups
Leader's ingroup

• Dependable individuals perceived as more
experienced and ready for added responsibility
expected to become committed to the unit's
activities and goals, to be more dependable, to
give more time and energy, to become more
involved in administrative activities, and to be
more responsive to the leader's wishes than
other group members.

Leader’s outgroup

• Characterized by "low quality" exchanges which
reflect lower levels of trust, interaction, support,
rewards, decision influence, and little or no
involvement in administrative activities.
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10-6


Important Social Exchange
Behaviors Used by Leaders
Acknowledging
Acknowledging

followers’
followers’achievements
achievements
and
concerns
and concerns
Delegating
Delegatingtasks
tasks
and
andmonitoring
monitoring
followers
followers
Seeking
Seekingvalues
values&&
goal
goalconvergence
convergence
through
throughspiraling
spiraling
agreement
agreementpatterns
patterns

Negotiating
Negotiating
followers’

followers’roles
roles

Showing
Showingpoliteness
politeness
and
andchoice
choiceframing
framing

Social
SocialExchange
Exchange
Leader
LeaderBehaviors
Behaviors

Using
Usinginsider
insider
markers
to
markers toestablish
establish
common
ground
common ground

Sharing

Sharingtheir
theirown
own
problems
and
problems and
pressures
pressures

Standing
Standingbehind
behind
followers
followerswho
who
take
risks
take risks

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10-7


Examples of Ineffective
Social Exchange Behaviors






In dealing with followers, the leader constantly referred to
formal role prescriptions as specified in the employment
contract. The leader repeatedly emphasized his formal
authority and the obligations of each group member to be
“bound by the contract.”
The leader’s interaction with a follower was brief, with
specific questions directed at the follower and little time
or effort provided for exchanging ideas on issues. The
questions were designed to gather information on the
follower’s performance on specific tasks.
A leader showed little understanding of a follower’s job
problems and needs and blamed the problems on the
follower’s lack of effort. When the follower attempted to
explain her perceptions of the problems, the leader
ignored her and constantly interrupted.

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10-8


Skills, Traits and Sources of Power for
Effective Building Social Exchanges

Communication
Communication
Skills
Skills

Flexibility
Flexibility

Empathy
Empathy&&Social
Social
Perceptiveness
Perceptiveness
Career
CareerMentoring
Mentoring
Skills
Skills
SOCIAL
EXCHANGE
BEHAVIORS

Referent
Referentand
andExpert
Expert
Power
Power
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Legitimate
Legitimateand
and
Reward

RewardPower
Power

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Fairness/Justice in Social Exchanges
Fairness is concerned with
resource allocation and
reward distribution, job
assignments, decision
making, performance
evaluation and many other
administrative matters.

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10-10


How Do Leaders Demonstrate
Fair and Ethical Behavior?




Providing information to followers
about procedures for resource
allocation, reward policies, or decision
criteria shows followers that the leader

has nothing to hide.
Providing explanations for why policies
exist or certain decisions are made
provides the follower with a clearer
image of the rationale behind them.
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Three Types of Fairness Important
to Followers


Distributive Fairness




Procedural Fairness




refers to the outcomes (rewards) a follower
receives in relation to his/her inputs (efforts or
abilities)
describes followers’ assessment of the
procedures used to make decision which affect
them, such as resource allocations and reward

distributions

Interactional Fairness


refers to the quality of interpersonal treatment
the follower receives from a leader.
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Effects of Social Exchange
Behaviors
Satisfaction
Satisfactionwith
with
leader
leader

High
Highfollower
follower
performance
performanceratings
ratings

Commitment
Commitmentto
tothe

the
organization
organization

Positive
Positiveperceptions
perceptions
of
ofequity
equity&&
organization
organizationclimate
climate

Effects
Effectsof
ofSocial
Social
Exchange
Exchange Behaviors
Behaviors

Faster
Fasterpromotions
promotions
for
followers
for followers

High

Highinfluence
influenceon
on
decisions
decisions

Possible
Possibleacts
actsof
of
altruism
among
altruism among
followers
followers

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10-13


Situational Factors that Enhance
Leaders’ Exchange Behaviors
 Highly

routine or highly challenging
work tasks
 Followers who were achievement
oriented and liked to be challenged

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10-14


Situational Characteristics that Neutralize
Leader Exchange Behaviors


A lack of trust between a leader and
followers
A

lack of trust could interfere with the mutual
confidence needed in a high quality exchange



Peer group pressure to ostracize followers
who do extra work
 Peer

pressure may inhibit an ingroup member
from putting in the extra effort expected by the
leader
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10-15

Situational Characteristics that Substitute
for Leader Exchange Behaviors
 Job

redesign approaches intended to
create satisfaction, commitment and
motivation among non-management
employees combined with goal setting

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10-16


When to Use
Social Exchange Behaviors






One reason that leaders develop high
quality exchanges with specific followers is
to help fulfill the leader’s responsibilities.
However, there must be mutual trust
between leaders and followers and an
absence of normative pressure which may
prevent followers from accepting additional
duties and responsibilities.

Social exchange behaviors by a leader may
be most effective with followers who have
previously had low quality exchanges.

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The Four-Way Test
1. Is it the truth?
2. Is it fair to all concerned?
3. Is it profitable or beneficial to all
concerned?
4. Will it build friendship among all
concerned?

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10-18


Tentative Process Model of
Leaders’ Social Exchange Behaviors
SITUATIONAL FACTORS
INCREASING LEADER
EFFECTIVENESS
Enhancers
• High follower achievement
orientation

• Routine or challenging work
tasks
Substitutes
• Job enrichment and goal setting

LEADER PARTICIPATIVENESS

• Delegating tasks and monitoring followers’
effort, performance, and attitude
• Acknowledging followers’ achievements,
responding to concerns and using humor
• Being polite when disagreeing with followers
• Choice framing for followers’ decision
making
• Seeking convergence between values and
goals through spiraling agreement

SITUATIONAL FACTORS
DECREASING LEADER
EFFECTIVENESS
Neutralizers
• Lack of trust between
followers and leaders
• Group pressure against
follower extra effort

FOLLOWER/GROUP PSYCHOLOGICAL
REACTIONS
• Satisfaction with leader
• Commitment to the organization

• Positive perceptions of equity and the
organizational climate
• High influence on decisions

FOLLOWER BEHAVIORS AND
OUTCOMES
• High follower performance ratings
• Faster promotions for followers
• Possible acts of altruism among followers

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10-19


Applying the Tentative Process Model of
Leaders’ Social Exchange Behaviors
1. DIAGNOSING THE SITUATION






Are leaders overburdened with responsibilities?
Are followers’ abilities and motivation underutilized?
Are followers’ work tasks either boring or highly challenging?
Do followers place high trust in the leader?
Would conditions support followers in accepting added responsibilities?

If “yes” to two or more of these questions, then leaders’ social exchange behaviors will
probably be effective.

3. MODIFYING FOLLOWERS
AND SITUATIONS

2. PROVIDING SOCIAL EXCHANGE
BEHAVIORS

Leaders may also act to:
 Create enriched jobs with goal
setting for followers
 Build followers’ trust in the leader
 Alleviate any normative pressures
that may prevent followers from
exerting extra effort or adding
responsibilities

Leader demonstrates social exchange by:
 Delegating tasks and monitoring followers
 Acknowledging followers’ achievements and
responding to followers’ concerns
 Behaving ethically and fairly
 Showing politeness and choice framing
 Seeking values and goals convergence through
spiraling agreement
 Using insider markers to establish common
ground
 Standing behind followers who take risks
 Sharing their own problems and pressures

© Prentice Hall 2006

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