Can Transactional Leadership Keep Your Team in Shape?
By: Daiv Russell

If you have ever studied Abraham Maslow‘s “hierarchy of needs,“ you know that a motivator for many people at lower stages of the hierarchy is whether they will be rewarded or punished for an action. In business, the application of this is that lower-grade employees need clear structures and direction from the higher-ups to feel motivated. For example, an employee in a company should be ready to give up their own agenda and take direction. If you are subordinate to a manager, things work best when you are ready to obey your manager‘s instructions.

The organizer of the transaction works on crafting plain structures, consequently making it clear to juniors just what is entailed, in addition to the rewards corresponding with following those requirements. Punishment is regularly subtly declared, but commonly understood, with recognized regulation practices present.

The first stage of Transactional Leadership consists of the negotiation of a contract, thus the subordinate receives salary and other defined benefits, and the company (and by extension the new employee‘s manager) receives authority over the subordinate.

Employees will be punished for their failure if things do not go correctly, just as they would be rewarded for their successes. When a job is given to an employee by the Transactional Leader, the employee is fully accountable for its completion. This accountability applies whether or not the employee has the means or ability to finish the project.

The transactional leader often uses management by exception, working on the principle that if something is operating to defined (and hence expected) performance then it does not need attention. Exceptions to expectation require praise and reward for exceeding expectation, whilst some kind of corrective action is applied for performance below expectation.

Transformational leadership is more sales-oriented, but transactional leadership is more performance-oriented. The difference is sometimes stated ‘selling versus telling‘. Transactional leadership means that positive or negative consequences all depend on good or bad workplace performance.

Many managers still hold the Transactional Leadership approach in high regard despite recent research which has highlighted some limitations. The fact that this approach skews towards Management rather than towards Leadership makes it far easier to implement for those light on talent, time, or training.

People are not simply driven by monetary rewards and cannot be assumed to be working examples of ideal rational individuals. Psychological theories that attempt to define and describe motivation and resulting actions are Pavlov‘s Classical Conditioning and Skinner‘s Operant Conditioning. These theories were devised using simplistic animal experiments and do not correctly model complex societal and human characteristics.

In practice, there is sufficient truth in Behaviorism to sustain Transactional approaches. This is reinforced by the supply-and-demand situation of much employment, coupled with the effects of deeper needs, as in Maslow‘s Hierarchy of Needs. When the demand for a skill outstrips the supply, then Transactional Leadership often is insufficient, and other approaches are more effective.

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Daiv Russell is a management and marketing consultant with Envision Web Marketing. Read more www.EnvisionSoftware.com/Management“>Small Business Management Articles, learn about www.abraham-maslow.com/“>Maslow and www.abraham-maslow.com/m_motivation/Hierarchy_of_Needs.asp“>Maslow‘s hierarchy.

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