Leader-Member Exchange Theory offers three key tasks that define the relationships between leaders and employees. These are role-taking, where managers assign roles to new team members; role-making, where managers begin to define the roles of team members and routinization where the routines between the team member and the manager become defined. For the manager, this theory is valuable because it can identify the roles that different team members play in the organization. Managers then can use these roles to motivate workers. Those who are in the in-group can be given greater roles because they are more competent and more trusted, while those in the out group are marginalized because of their inherent uselessness. An example of how this works is in a startup where roles continually evolve. Initially, new employees are handed a fairly specific role, something where management can gauge how much the employee can be trusted to perform tasks. When the employee proves worthy, they may be called upon to fill an expanded role, and in doing so might make their own roles. Eventually, those who are pegged to move ahead rapidly as the company expands are those who demonstrate the most commitment and faith to the organization, or at least the most competency, and thereby win the trust of management. It is good for managers to understand, however, that where a relationship might seem strained with somebody in the out-group, such individuals in the out-group can be brought back to the in-group if there is enough will on the part of the manager to repair the relationship and establish some sort of trust.

2. The Hawthorne and Halo effects are two different types of behaviors that can have an impact in the workplace. The Hawthorne effect is also known as the observer-expectancy effect. It describes a situation where subjects improve their behavior when they know they...

I worked in an organization where workers worked remotely from head office. Head office would conduct performance evaluations based on both statistical analysis of performance but also on occasional work site visits. Employees were known to improve their performance during such visits. Whatever their normal performance levels, they would at least reach the minimum standards during the supervisor visits, especially in areas like service that were no normally captured by the performance statistics. The Hawthorne effect probably described most workers, so it may well have balanced out such that nobody was especially disadvantaged by it, but it remained an area of performance evaluation for which management found it difficult to control.
The halo effect is a cognitive bias, reflected in business where a manager passes judgment on an employee's performance in part based on their overall impression of the employee, including personal factors. Those employees who are more favored on a personal level will be subject to bias in performance reviews. The reverse halo effect is true for those who are subject to less favorable personal impressions -- they may be viewed more critical during performance reviews. The halo effect is something that human resources departments try to eliminate by implementing quantitative performance measures, and in my previous organization there was only limited opportunity for the halo effect to have an impact on performance reviews. However, hiring for managers was definitely colored by the halo effect, because the senior managers who would hire junior managers were oriented towards people they would be more comfortable to work with. The halo effect therefore become part of the hiring process in an informal way, whereby workers of roughly equal competence would have different levels of opportunity to get ahead…