Transformational vs. Transactional leadership

Transformational vs. Transactional leadership

Introduction

Every manager has a distinctive style of leadership, ranging from autocracy to micromanagement. The type of leadership implemented determines the performance of the company and how the employees carry themselves in the organization. Transactional and transformational leadership are amongst the leadership styles that are commonly adapted by managers to boost employee performance and accomplish change in the organization, and it is important for managers to understand the difference between the two.

Transactional leadership

Max Weber was the first person to identify transactional leadership theory in 1947. He was then backed up by Bernad Bass in 1981.  They describe the transactional leadership style as a style concerned with the basic management process of controlling the flow of operations in an organization. Managers control, organize, and plan for daily operations. The employees are expected to obe the instructions issued by the leader. Leaders use both rewards and punishments as a means to motivate employees. When the employee performs as desired, then they are issued a reward, but punishment is issued to the one who fails to meet the expected results. These rewards are issued if employees hit the SMART goals (specific, measurable, attainable, realistic, and timely). The main focus of the leadership style is to achieve routine performance goals.

The advantages of this leadership style are that it improves employee productivity as they are motivated through awards. They also fear punishments. It makes it easy to achieve the set goals. It is also easy to implement, reduces on cost, and eliminates confusion withing the chain of commands. The disadvantages of transactional leadership are that leaders focus on the short term goals and standard rules and do not give employees a chance to portray their creative and new ideas. Also, employees perform their responsibilities in the hope of attaining a reward. If there are no rewards, then there is low self-motivation. McCarthy and de Gaulle are among the leaders known to have used a transactional leadership style.

Transformational leadership

Transformational leadership, unlike transactional leadership, focuses on taking the company to the next level of performance and not on day to day operations. Leaders are more concerned with motivating employees to share new ideas and innovations that will help grow the company. Transformational leadership is implemented through a strong sense of culture where an employee is granted independence in their work stations. Transformational leaders inspire and encourage employees to supervise them. Employees are usually well trained to perform well in their roles. Employers have confidence in the employees that they will make the right decisions. Employees are offered a room to be more innovative and look for new solutions to solve existing issues. Employees are also mentored and trained to become better leaders. Leaders who have been known to use the transformational leadership style include Steve Jobs of Apple and Reed Hastings from Netflix.

The transformational leadership style encourages employee loyalty and reduces turnover costs.new ideas are implemented in the company’s strategies. It also promotes employee loyalty and performance. Employees feel more responsible and accountable for their work assigned. It also helps build a strong workforce. The disadvantages are that more risks are introduced to the company since ideas are being bought from employees. It could also cause employees burnout as they are under pressure to create new ideas and innovations.

References

Thompson, J. (2019). Advantages and disadvantages of transactional leadership. Retrieved from https://smallbusiness.chron.com/advantages-disadvantages-transformational-leadership-20979.html

White, S. (2018). What is transformational leadership? A model for motivating innovation. Retrieved from https://www.cio.com/article/3257184/what-is-transformational-leadership-a-model-for-motivating-innovation.html

Management Study Guide. (n.d). Transactional leadership theory. Retrieved from https://managementstudyguide.com/transactional-leadership.htm

Gaille, B. (2018). 16 Advantages and disadvantages of transactional leadership. Retrieved from https://brandongaille.com/16-advantages-and-disadvantages-of-transactional-leadership/