Transactional leadership, also popularly known as managerial leadership, has its primary focus on supervising, organizing, and assessing performance of groups.
Transactional leaders expect followers to be compliant and ensure this by way of rewards and punishments. In this approach, the leader is not looking forward to transforming or improving the future but just wants things to remain the same. Transactional leadership is ideal to carry out projects that need to be done in a systematic and structured manner.
How do you identify a transactional leader? Here are some tell-tale signs.
1. Extrinsic motivation
A transactional leader aims to elicit the desired performance from the team by motivating them externally. Employees are rewarded for behaving in an expected manner, and punished for any deviation. The relationship between the employee and the leader is a transactional one.
One of the most distinct characteristics of a transactional style of leadership is practicality. Their approach to solving problems is one of pragmatism, and they take all realistic constraints and opportunities into account.
3. Resistant to change
Because transactional leaders do not seek to transform things, they tend to be highly resistant to change. The leader wants everything to remain strictly as they are, and do not believe in improving working conditions to make things better.
4. Discourage independent thinking
These leaders do not encourage employees to act creatively or think for themselves. Independent thought and risky actions are frowned upon, and this is because the leader is not innovative and believes that things are good as they are.
5. Rewards performance
The leader will keep a watchful eye on the performance of all employees based on specific goals and targets that have been set for them. They are quick to notice when employees achieve a predetermined goal and will reward them appropriately. Similarly, they are also aware of poor performance and withholds the reward in such instances.
6. Constrained thinking
A transactional leader is happy to work within the existing systems and constraints and will operate from within the boundaries to achieve the goals of the organization. They tend to think inside the box for solving problems. While they may be able to handle routine affairs, they are often stumped when faced with the problem that requires a creative solution.
This leadership style is quite passive because the focus is on maintaining the status quo. The leader tends to only react to things that happen and does not take proactive steps to prevent problems. The most notable behavior associated with this leadership is establishing criteria for assessing and rewarding performance.
Expect to be micromanaged and directed if you’re working under a transactional leader. This type of leader believes that it is up to him to make all the decisions, and employees must simply follow their directives or instructions.
9. Emphasis on corporate structure
The transactional leader places a lot of importance on hierarchy, and the corporate structure and culture. The leadership style compliments rigid organizational hierarchy.
10. Emphasis on self-interest
The motivational style of a transactional leader is one of appealing to the self-interest of the employee. If the employee achieves a certain goal, they are rewarded. There isn’t much emphasis on teamwork or achievement of group goals.
Y Scouts is an executive search firm that helps nonprofits and social enterprises find exceptional leaders. We believe the right leaders make all the difference. We have pioneered a revolutionary approach to identify exceptional leaders and match them to the positions you need. We’re passionate about the power of the right connections. Contact us if you are looking to find an exceptional leader. Or, to be considered for exceptional leadership opportunities with our clients, please take the first step by joining the Y Scouts Leadership Community.