CHAPTER TEN BUILDING SOCIAL EXCHANGES AND FAIRNESS © Prentice Hall 2006 10-1 Learning Objectives After reading this chapter, you should be able to 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 © Prentice Hall 2006 10-2 Learning Objectives (cont.) After reading this chapter, you should be able to 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 © Prentice Hall 2006 10-3 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 © Prentice Hall 2006 10-4 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 © Prentice Hall 2006 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 © Prentice Hall 2006 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 © Prentice Hall 2006 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 © Prentice Hall 2006 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 © Prentice Hall 2006 Legitimate Legitimateand and Reward RewardPower Power 10-9 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 © Prentice Hall 2006 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 © Prentice Hall 2006 10-11 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 © Prentice Hall 2006 10-12 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 © Prentice Hall 2006 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 © Prentice Hall 2006 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 extra work  Peer pressure may inhibit an ingroup member from putting in the extra effort expected by the leader © Prentice Hall 2006 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 © Prentice Hall 2006 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 © Prentice Hall 2006 10-17 The Four-Way Test Is it the truth? Is it fair to all concerned? Is it profitable or beneficial to all concerned? Will it build friendship among all concerned? © Prentice Hall 2006 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 â Prentice Hall 2006 10-19 Applying the Tentative Process Model of Leaders’ Social Exchange Behaviors 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 MODIFYING FOLLOWERS AND SITUATIONS 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 10-20