Transactional leadership

Transactional leadership is a style of leadership that focuses on supervision, organization, and performance; transactional leadership is a style of leadership in which leaders promote compliance by through both rewards and punishments. Unlike transformational leaders, those using the transactional approach are not looking to change the future, they look to keep things the same. Leaders using transactional leadership as a model pay attention to followers' work in order to find faults and deviations.

This type of leadership is effective in crisis and emergency situations, as well as for projects that need to be carried out in a specific way.

"Adhering to the path-goal theory, transactional leaders are expected to do the following:

Within the context of Maslow's hierarchy of needs, transactional leadership works at the basic levels of need satisfaction, where transactional leaders focus on the lower levels of the hierarchy. Transactional leaders use an exchange model, with rewards being given for good work or positive outcomes. Conversely, people with this leadership style also can punish poor work or negative outcomes, until the problem is corrected. One way that transactional leadership focuses on lower level needs is by stressing specific task performance. Transactional leaders are effective in getting specific tasks completed by managing each portion individually.

Transactional leaders are concerned with processes rather than forward-thinking ideas. Transactional leaders are generally split into three dimensions: contingent reward, management-by-exception: active, and management-by-exception: passive. The type of leader who focuses on contingent reward, also known as contingent positive reinforcement, give rewards when the set goals are accomplished on-time, ahead of time, or to keep subordinates working at a good pace at different times throughout completion. Contingent rewards are also given when the employee engages in any desired behavior. Often, contingent punishments are handed down on a management-by-exception basis, in which the exception is something going wrong. Within management-by-exception, there are active and passive routes. Management-by-exception: active means that the leader continually monitors each subordinate's performance and takes immediate corrective action when something goes wrong. Management-by-exception: passive leaders do not monitor employee performance and wait for serious issues to come up before taking any corrective actions. In addition to the three dimensions of leadership above, another form of transactional leadership is recognized, the laissez-faire dimension. Laissez-faire leadership indicates a lack of leadership and a complete hands-off approach with employees.

...
Wikipedia