Transformational & Transactional Leadership

Leadership is a very important part of running a successful organisation. Leadership is strongly linked to various employee attitudes and behaviours. Leadership also influences employee engagement in an organisation. Two dimensions of leadership include transactional and transformational leadership. Transactional leaders believe that employees are motivated to perform based on reward or punishment. Clear expectations are given and when those expectations are met, there are rewards.

Transactional Leadership

This dimension of leadership focus on clarifying employees' role and task requirements. It provides followers with positive and negative rewards based on their performance. Transactional leadership implements the fundamental managerial activities such as setting goals, monitoring progress towards the goal achievement and rewarding people according to their performance towards the goal achievement. This kind of leadership uses extrinsic motivation to increase productivity.

Transformational Leadership

Transformational leaders cultivate trust, develop leadership qualities in others, are servant leaders who sacrifice and serve as moral agents. These leaders focus themselves and their employees on objectives that transcend the immediate needs of the work group. Whereas transactional leaders use extrinsic motivation to increase productivity, transformational leaders use intrinsic motivation, trust, commitment and loyalty to move employees to greater productivity. This does not mean that there is no place for transactional leaders. The best leaders learn how to display both dimensions to various degrees. It is important for employees to understand what they should do and what performance looks like. Transformational leadership increase performance beyond expectations.

Written by Magriet Mouton