What is Transactional Leadership

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What is transactional leadership

In 1947 Max Weber was the first to start talking about the Transactional Leadership style. Bernard Bass continued to expand the theory in 1981 since it has become one of the primary management tactics used throughout the world. Basically, this style focuses on compliance and job execution through a reward or punishment model. It is diametrically opposed to that of Transformational Leadership which focuses on employee growth and success. Those that subscribe to the transactional leadership model believe in the concept of an work exchange situation where rewards are given for good work or positive outcomes and they punish poor work or negative outcomes. There is a basic management process defined around controlling, organizing, and short-term planning most famously used by leaders like McCarthy and de Gaulle.

By appealing to the basic self-interests of an individual, transactional leaders are able to motivate and direct followers through their authority and the responsibilities they have in an organization. The follower obeys the leader because if they do, there are rewards, and if they do not, there are consequences to their actions. This simple methodology of reward based action is prevalent everywhere and has certainly caused our society to even think that if they just do good they will get rewards. It also makes people believe that humans will only do something based on the reward they get. This isn’t always the case in real life nor an organization of larger sizes where sometimes your good work doesn’t get you a reward or visibility for your efforts. The transactional mindset is one where people think that the best way to control people or get them to do what they wanted them to — is to offer them rewards or threatened them with some form of punishment.

How to improve your transactional leadership skills

Transactional leadership and its theory is not bad in its own right and can be effective in many situations. As a Leader, it is critical that you are able to decide what type of style you need to use in relation to the type of person you’re dealing with. In some situations, you might find that a reward is the best course of action to take, but in other ones you will find that the reward doesn’t actually give you what you want even if you offer the individual in question a larger reward. Case in point, here’s a RSA video where Dan Pink talks about the surprisingly truth to motivating people. You have to learn to come from a perspective that in any situation there isn’t a right or wrong approach — there is only the effective one needed for this moment.

If you’re going to make the decision to start using a transactional leadership style with your employees or those you interact with, here are some ways that you can improve your skills.

  • Set clear goals and communicate exactly what you are looking for and the work expected to be done.
  • Make sure that your work plan has efficiency processes and procedures built-in so that as the work is completed you continue to grow productivity.
  • Develop an organizational structure that has the appropriate checks and balances so that people stay focused on the tasks that are needed to be done and not creating their own solutions.
  • Design your reward system so that as productivity increases the reward grows. Make sure, though, that whatever reward you have set is in alignment with the reward goal of the employee. Do not forget, to make sure rewards are contingent on successful completion of the work based on whatever success criteria you had defined.
  • Conversely, design your punishment system so that as productivity decreases the punishment grows. You need to punish poor work or negative outcomes until the problem is corrected but, it is best to do it in a way that does not completely alienate your employee. Ultimately, though, if work performance continues to degrade you will need to take appropriate measures to replace individual.

Your role as a transactional leader is mostly to tow the line and keep productivity and work growing at a measured pace. You are not here to bring in new technology or new ideas on how to solve existing business problems. You are expected, though, to bring constructive criticism to whatever process is not providing the most efficient and productive means. Teaching yourself and building the skills that are needed so that you can understand more along the lines of what your employees “need” and “what reward motivates them” is helpful in achieving greater success while in your role.


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Author Christiaan Stoudt

Christiaan focuses on transformation by helping businesses and individuals strategically evolve past their limiting paradigms allowing them achieve their true success and growth potential.

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