TRANSACTIONAL LEADERSHIP

Burns (1978) and Bass (1985) portrayed a transactional leader as one whom:

(1)  recognizes what it is one wants to get from his/her work and tries to see that one gets what his/her wants if performance warrants it; (2) exchanges rewards and promises of reward for effort; and (3) is responsive to one’s immediate self-interests if they can be met by getting the work done (as cited in A. Chan & E. Chan, 2005). 

Bolden, Gosling, Marturano, & Dennison, (2003) presented that employees are inspired through the use of recompense and chastisement (as cited in Taylor, 2009).  Taylor (2009) asserts that employees are held accountable regardless of competency or resource availability. 

Transactional theories of leadership assert that people will follow leaders who are inspirational.  The leader will develop a vision (possibly collaboratively), sell the vision and lead the way (Taylor, 2009).  van Eeden et al (2008) defined transactional leadership as a transactional process between the leader and employee.  Hartog, Van Muijen & Koopman (1997) added that the leader-employee relationship not only involves exchanges, but bargaining as well.  Deluga (1990) supported this by stating that leaders and/or employees can exercise a significant amount of control and influence over one another during this exchange and bargaining process.  Pettigrew (1972) and Mechanic (1962) stated “a leader’s control over vital information or an employee’s special skill in solving crucial organizational problems provides each participant leverage from which to negotiate” (as cited in Deluga, 1990).  The overall success of the organization depends on whether the leader has the power to strengthen the process in which work is completed by staff (Jogulu & Wood, 2007).  McGuire & Kennerly (2006) report that transactional leaders are only interested in maintaining the “status quo” for their organizations.  Transactional leaders are known to establish performance specifications and make sure they are accomplished by a given deadline, limit the contentment of employees and create a low amount of employee commitment.     

            Transactional leadership is divided into three distinct processes that influence employees: active management by exception, passive management by exception and contingent reward (van Eeden et al., 2008).  In the case of active management by exception, the leader looks for mistakes, indiscretions, exceptions, divergence from standards, complaints, infractions of policy and regulations, and failures and he or she takes corrective action before or when these occur (van Eeden et al., 2008).

A non-listening, reactive leader who does nothing to curb foreseeable errors or problems is considered to be leading by the passive management exception (van Eeden et al., 2008).  Leaders identify the outcomes (reward or punishment) that will be bestowed based upon the employee’s performance (van Eeden et al.).  Leaders using contingency rewards engage the path-goal theory that was outlined by House (1971) because it rewards and motivates employees based on performance (Bass, 1997).  Contingency rewards used in transactional leadership use contingency rewards for employees when they attain pre-set goals and objectives (Murphy, 2005).  Chan & Chan (2005) suggested employees receive rewards for accomplishments, proposals to augment pay and promotion, or praise for superior hard work.  Webb (2007) contends that a leader who recognizes the attributes of their employees will assign tasks that will allow the employee to accomplish the mission and obtain their just reward which in turn will motivate them to do more. Webb (2007) indicated there was an optimistic association between contingent rewards and organizational results.

Transactional leadership has more shortcomings than merit. Rugieri (2009) contends that a transactional leader is more commanding, has high confidence and is usually more fixated on the job.  Trott & Windsor (1999) stress that transactional leadership is best suited for group settings that are under crisis because it offers satisfaction through an urgent resolution.  Medley & Larochelle (1995) noted the results with transactional leadership are not very valuable over time (as cited in Trott & Windsor, 1999).  Although transactional leaders center on employee needs; they do not offer opportunities for obtaining motivation, job contentment or allegiance (Sahin, 2004).  Generally the transactional leadership style is used mostly in organizations dominated by command and control procedures (Bass, 1997).  Silvestri (2007) reported that employees in a transactional framework obtain their position within the structure through competition and conformity.      Furthermore, police leaders continue to work within the transactional style and tend to be autocratic (Silvestri, 2007).