Transformational vs Transactional Leadership


Transformational vs Transactional Leadership

In the course of the subsequent discussion the topic “Transformational vs Transactional leadership “. At this time, we would like to thank Roger Romano, who has accompanied the workshop as a specialist expert. In the following article, the two management approaches (Transformational vs Transactional leadership) are compared and illustrated by examples.

Transactional Leadership

Transactional leadership is characterized by clear rules, structures, and goals. The employee does what the supervisor expects from him. The underlying work is based on the idea of exchange, i.e an input-output relationship: When I work out my given goals, I get money for it. The employee acts in his role as a rational decision-maker, which pursues the path to the goal. Transactional managed persons are rewarded extrinsically, ie through money and career opportunities.

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Clear rules and defined objectives lead to the safeguarding of employees’ rights. This can be particularly effective in routing operations. The disadvantage of the transactional leadership is that employees are accustomed to getting something for good performance and to be sanctioned with poor performance. If the stimulus of the reward or punishment diminishes, the motivation is lost. It is not possible to increase the financial reward continually and it is not always possible to offer advancement.

Example:  The specifications for a factory worker are clear. The shift starts at 7:00 am and ends eight hours later. From 12:00 to 12:45 is a lunch break. When entering and leaving the workplace must be stamped. The tasks of the employee are limited to the punching of metal parts. It has to produce at least eight hundred parts per day. Productivity is recorded electronically. If he reaches the predefined workplace, he receives his reward at the end of the month as a “reward”. If he has produced much more than given, he gets an allowance. If the yield is permanently below the specified quantity, the employee is replaced.

Transformational Leadership

In the case of transformational leadership, the vision of joint work is at the forefront. That is, employees who are led by these whites are not only pursuing their own interests (input-output relationship) but higher goals. The emotional relationship between management and employees plays an important role in this process.

The spread of a common vision through the charismatic leadership influences employees to achieve intrinsic tasks and goals. The charismatic guidance is often used for complex tasks. Rigid rules and structures are a hindrance to the work process.

Example: The employee of a company has a fixed payday, which corresponds to the industry average. It is often confronted with changes in plan or unforeseen tasks. Some working days are longer, others shorter. Your boss, a visionary, does not lead the team on the money. Rather, he influences his colleagues through his vision and by generating emotions. It shows you the way to the whole and invites the employees to participate in the culture.

Conclusion Transactional Leadership

Depending on the work requirements, the employee types and the environment, transactional or transformational management can lead to the desired success. While transactional leadership is typically characterized by clear rules, structures, and goals and often occurs in a work environment with standardized processes, the transformational leadership is guided by a charismatic personality. It is used in more complex, non-routine tasks.