The Transactional Approach to Leadership
In this article I will discuss the second set of approaches to leadership, transactional versus transformational. The transactional leadership style was first described by Max Weber in 1947, and again by Bernard M. Bass in 1981. The transactional approach to leadership has an element of quid pro quo – or this for that to motivate an individual. With the use of a transactional based leadership approach, followers are motivated through a system of positive reinforcement for achieving or exceeding expectations (rewards) or being negatively impacted for missing expectations (punishment).
Its principles are to motivate workers by the exchange of status and wages for the work effort of the employee. In its simplest form a person is provided a salary and benefits for working. Taking the next step in this approach a person may be provided incentives or bonuses for achieving specifics goals. Going further they may receive recognition, advancement and other types of positive reinforcement while knowing that if they do not succeed they will not be rewarded and may possibly endure undesirable consequences.
Transactional versus Transformational
Transformational leaders are on the opposite leadership theory spectrum relative to transactional leaders. Transformational leaders take advantage of leveraging the emotional needs and mental state of the individual by injecting enthusiasm and passion to inspire and motivate the individual to achieve. It uses more selling tactics.
Which is best? Actually neither is if taken to their extremes. In the management versus leadership spectrum, higher uses of transactional approaches tend to be more effective at the management end with more blending in of transformational approaches at the leadership end of the spectrum. Today, most leaders would agree that using only material rewards and fear of punishment is not the best approach to motivate their workers. According to Bass, the best leaders are both transformational and transactional. The transformational approach will be presented in my next article.
Specifics of the Transactional Approach
Transactional approaches focus on the accomplishment of tasks and good worker relationships in exchange for desirable rewards to ensure that wider organizational goals are met. Good organizational structures and the communication of a clear understanding of what needs to be done is required along with a general awareness of the positive and negative consequences for the quantity and quality of the follower’s efforts.
Transactional leaders exhibit specific leadership skills usually associated with the ability to obtain results, to control through structures and processes, to solve problems, to plan and organize, and work within the structures and boundaries of the organization. Negotiation and effective communication skills are essential for this type of leadership.
According to Bass, effective transactional leaders are capable of (1) clarifying what is expected of the employees’ performance, (2) explaining how to meet such expectations, (3) spelling out the criteria of the evaluation of their performance, (4) providing feedback on whether the employee is meeting the objective, and (5) allocating rewards that are contingent to their meeting the objectives.
Evolution of Approaches
Transactional leadership approaches are used to one degree or another by most leaders. In the past twenty to thirty years, the use of more transformational approaches have been a popular topic in leadership literature, however, transactional leadership constitutes a foundation for it and it is still a necessary element for an effective leader.
As the old saying goes, “If the only tool in your tool box is a hammer … you will perceive every problem as a nail.” It is fair to say that the field of leadership has improved significantly because of these modifications to transactional leadership approaches.
It is the blending of and not the absolute use of one type versus the other that has delivered these improvements. This is why it is important to have a command of both of these approaches in order to create the optimum leadership approach and style that is right for you. Look for my next article on the topic of transformational leadership for this knowledge.
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Don Redinius, Author – The New Era of Financial Success, Process Management for Team Members and a contributing author to Six Sigma for Dummies.