Leaders who adapt their style to different individuals within the group, or have different quality relationships with individual group members, are essentially practicing contingency leadership. Hundreds of studies have been conducted about LMX theory. Here we present several conclusions from LMX research that indicate a contingency approach to leadership. LMX theory has been extensively researched, and only parts of the theory are about contingency leadership.

Leaders tend to give members of their in-group more favorable performance ratings than they give to out-group members, even when their objective performance is the same. Leaders do not always have different relationships with each group member, but may respond the same way to a few members of the group. For example, the leader might show equal care and trust for three members of an eight-person team.

In larger groups, there tends to be more differences with respect to LMXs. As a result, the leader is more likely to use a slightly different style with various group members, such as being more authoritarian with several of the group members. A manager is more likely to act as a servant leader toward subordinates with whom he or she has high-quality exchanges. As a consequence, in-group members are likely to perceive that they have a leader who is working on their behalf.

Leaders are more likely to empower group members with whom they have a high-quality exchange (or good relationship) because they are more likely to trust those members. Research suggests, however, that better results for the organization will be attained if leaders attempt to have high-quality relationships with more group members and empower them at the same time. A study of 143 teams in three organizations suggested that moderate degrees of LMX differentiation improve coordination within the team and yield the highest level of team performance.

Surprisingly, LMX differentiation leads to more positive commitment and citizenship behavior when the LMX quality is lower rather than higher. Apparently, when a worker does not have a good relationship with the boss, he or she will have better work attitudes when the leader treats most people differently.