Transactional Leadership

Some form of transactional leadership can be found in all organizations (people get paid don't they!). The major disadvantage of only utilizing this model is that it does not take into account people's desire for self-actualization. Which is where the Transformational Leadership Model comes to play. These two models - Transactional and Transformational - lay at either end of the leadership continuum. If you are going to adopt the transactional model, below are five things that leaders using this model should and should not do.

5 Things That Should Happen Under Transactional Leadership

1. Transactional leaders must understand what motivates their employees. Because the success of transactional leadership relies on the employee valuing the rewards that are in place, it is important for the leader to understand what it is that will motivate the employee and ensure that reward systems are appropriately aligned. It is the leader's responsibility to establish a system of rewards that will be valued by the employee.

   Some reward systems are established by the HR department or company policy, and when an employee accepts a work position with the employer, the employee is agreeing to that reward system. However, leaders at all levels should have a better understanding of what motivates each of his/her employees. This will allow the leader to continually link the rewards most valued by a particular employee with the successful completion of the task. Additionally, having knowledge of the rewards valued by employees may give leaders some insight into the most effective incentives that they can offer at their level over and above base rewards such as salary, health benefits, and vacation days.

2. Ensure employees understand the reward system and how they can achieve the rewards. To ensure that the full effect of a reward system is realized, leaders must ensure that employees understand all of the rewards that are possible. Many employees do not understand their full benefits package, and, therefore, do not realize how much their employer appreciates their efforts. By ensuring that the employee understands the full benefits package, a leader may unlock additional motivation from their employees.
3. Ensure that both reward and punishment systems are in place and are consistently exercised. To prevent situations of perceived unfairness among employees, leaders must ensure that both rewards and punishments are awarded consistently, without bias. Perceptions of bias among employees can detract from the value that they hold for the rewards programs, and, as a result, employee motivations and work efforts could suffer.
4. Provide constructive feedback throughout the work process. One of the most disheartening moments for an employee is when they put forth what they perceive to be an extraordinary or even an acceptable level of effort for their task only to find out after the completion of their task that they totally missed the mark. By providing constructive feedback throughout the work process, leaders are better able to control the quality and quantity of employee output and better able to shape employee expectations as to whether they will actually receive rewards for their efforts.
5. Ensure that rewards and recognition are provided in a timely manner. Leaders can best harness the emotions and satisfactions of the moment by recognizing and rewarding employees as quickly as possible. By doing so, leaders set the stage for future transactions between themselves and their employees. In effect, leaders establish a track record and build trust by providing earned rewards and recognition in a timely manner following task completion.

In providing five things that a leader should not do, one could simply offer the opposite action of the five things a transactional leader should do. However, the following recommendations provide a slightly different look at some of the pitfalls frequently experienced by this model of leadership.

5 Things That Should Not Happen Under Transactional Leadership

1. Do not assume that transactional leadership will yield the same results across different cultures. Most North American cultures emphasize individualism, so reward systems that allow for individual reward might be most effective there. Many Asian cultures emphasize collectivism, which would value the benefit of the group. So, leaders need to understand at which level to establish their reward systems and which level to reinforce the linkage of these rewards to the work being completed. For example, in a collectivist society, a leader might focus much of his/her communications at the group level.
2. Do not fail to harness the power of positive leadership. When we think of transactional leadership, we commonly think of the no-nonsense, very objective, emotionless leadership of a manager who simply sets goals, makes them clear, and monitors progress. However, a leader can be so much more effective by simply showing excitement towards the goals and the work of the employee. By showing such excitement, a leader is not crossing over into the visionary realm of transformational leadership but simply appealing to the employee's emotions by adding some enthusiasm into the transaction.
3. Do not rely on a reactive posture that can be characterized by indifference, delayed action, and/or absence. Such an orientation is often referred to as laissez-faire leadership - which is actually a lack of leadership activity. Perhaps some leaders, in the spirit of more conventional emphasis on a hands-off leadership style that provides space for employee initiative, will become so removed that they slip into an indifferent orientation. In the end, the work environment suffers more from an indifferent leader than from an environment where the leader tends to micro-manage the employees and processes.
4. Transactional leaders should not provide leadership over task areas in which they have no expert knowledge. One of the unyielding requirements of transactional leadership is for the leader to provide absolute clarity in issuing the task and goals for the employee. The leader must also be able to provide expertise when employees have questions during task performance. In transformational leadership, an employee is inspired to be creative and produce results. Transactional leadership allows little or no room for creativity and usually clings to established procedures and work practices. The transactional leader is well-versed in these procedures, practices, and task standards.
5. Do not force unethical work practices on their employees or allow them to observe them as the leader committing ethics violations. The power of transactional leadership relies on the value of the rewards that leaders can offer their employees. However, the theory behind this leadership style fails to recognize the fact that ethics are non-negotiable for some employees. Some employees will quickly detach themselves from any association with ethics violations. To them, ethics violations constitute a break in the work environment contract that may have been negotiated or simply implied at the beginning of their work relationship.

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