Transactional leadership is basically a leadership style in which the leader believes in reward and punishment theory (Lapworth, 2011). It emphasizes on the fact that work should be done to achieve the organization’s goals. It doesn’t believe that workers need to be motivated, inspired or creative. According to this leadership style, what matters is that things should remain the same.
The transactional leader analyses the work of its followers so that he could find errors in it and also so that he could see where they are going wrong in their work.
After his analyses if he finds that employee’s performance according to the desired level then he will be rewarded and if he doesn’t find it up to the desired level, then he will be punished. The reason behind this reward punishment theory is that he focuses on goals, objectives and structure of the organization. The transactional leaders are direct and success oriented. Their sole aim is the success of the organization.
This leadership follows rules, regulations, policies and standards. Usually transactional leadership is adopted in the situations where problems are simple and hence the leader doesn’t promote creativity from its employees (Lapwroth, 2011). It is not effective in certain situations, and also it doesn’t allow the leader and the followers to fully explore their creativity.
If transactional leadership theory is seen from the Maslow hierarchy of needs then it can be believed that it works with the core levels of needs atonement, where as the leader works with lower levels of the needs’ levels. The main emphasis of the leader is on a model that is termed as exchange model. If employees perform up to the mark then they are rewarded and if they don’t then they are punished.