Leader-Member Exchange Theory (LMX)

Picking favorites. The leader identifies certain people based on whatever criteria...probably the ones who are loyal and the biggest brown-nosers…and treats them extra special. The others get the shaft.

The people who are in the inner circle tend to do better...big surprise there. They’ll be happier on the job, probably get more done, and even be super loyal. The people on the out group will likely whine about being on the outside looking in, and resent the people who are on the inside.

Find other enlightening terms in Shmoop Finance Genius Bar(f)