Recent research conducted by an international collaborative team has revealed that business leaders managing teams must strike a balanced approach in their treatment of team members to avoid negatively impacting team performance. The study highlights the complexity of leadership dynamics, challenging the notion that there is a straightforward correlation between the differentiation in the treatment of team members and the team’s productivity. Bradley Kirkman, a co-author of the study and the General Hugh Shelton Distinguished Professor of Leadership at North Carolina State University, elaborates on this. Contrary to the established belief that varied treatment based on the perceived competence of team members can boost team productivity, this research proposes a nuanced understanding, suggesting that extreme variations in treatment can be detrimental.

The research team, comprising experts from NC State, the University of Science and Technology in Beijing, Peking University, and the University of Iowa, undertook a comprehensive study across three Chinese companies representing the pharmaceutical, telecommunications, and manufacturing sectors. They assessed the performance of 145 teams, examining the quality and efficiency of work, the ability to meet deadlines and budget adherence. The study relied on the “LMX7” scale to measure the quality of relationships between team leaders and members, focusing on the interaction dynamics rather than tangible incentives like salary.

Kirkman explains that the research uncovered a threshold to the degree of differentiation in treatment by leaders that, when exceeded, can lead to division within teams into favoured “ingroups” and marginalized “outgroups.” This division can decrease motivation and participation among outgroup members, potentially disrupting team harmony and performance. However, the study also warns against the pitfalls of undifferentiated treatment, advocating for a moderate level of differentiation that acknowledges individual competencies without fostering divisive favouritism.

The findings indicate that team size and the cultural concept of “power distance orientation” significantly influence a team’s tolerance for differential treatment. Due to their complex coordination and integration needs, larger teams benefit from a degree of differentiation that allocates more resources to capable members. Meanwhile, the cultural acceptance of hierarchical differences, as encapsulated in the power distance orientation, affects teams’ receptiveness to differential treatment. Teams from cultures with high power distance may be more accommodating of such therapy than those from low power distance cultures, which might outright reject it.

The study, “Understanding the Curvilinear Relationships between LMX Differentiation and Team Coordination and Performance,” published in Personnel Psychology, suggests that effective leadership requires a delicate balance. Leaders should aim for a moderate differentiation in treatment tailored to the competencies and abilities of team members while avoiding extreme preferential behaviours. This balance is crucial for fostering cohesive and high-performing teams across diverse cultural and organizational contexts. The research contributes to a deeper understanding of team dynamics and leadership strategies, offering valuable insights for leaders striving to navigate the complexities of modern team management.

More information: Yang Sui et al, Understanding The Curvilinear Relationships between LMX Differentiation and Team Coordination and Performance, Personnel Psychology. DOI: 10.1111/peps.12115

Journal information: Personnel Psychology Provided by North Carolina State University