Essay on "Business Management - Leadership Comparing Transactional"

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For this reason, transactional leadership is also commonly linked to the concept of "management by exception," a reference to the fact that under this vocational motivational approach, management responds only to performance at the extreme ends of the spectrum of employee performance. Under transactional leadership, the vast majority of employees do not draw attention from management; only the extreme exceptions, such as those who perform well enough to merit reward through promotion and those who perform so poorly that it threatens the continued interest of the organization in maintaining the transaction of wages and benefits in return for the employee's service, receive specific motivation outside of their general relationship. High performing employees receive motivation in the form a carrot, represented by their promotions or bonuses while low performing employees receive motivation in the form of a stick, represented by the consequences of continued low performance if it threatens their continued employment within the organization.

Many government agencies have been characterized as functioning poorly precisely because they have traditional been administrated exclusively through transactional dynamics (Bass, 1990; Bass & Steidlmeier, 1999). In many government agencies and other organizations relying on transactional leadership, employees have been known to work just hard enough not to get fired throughout their careers, particularly after having reached and achieved their promotional or earning potential.

Federal government has been especially susceptible to this dynamic because it relies on a step-increase system for periodic raises and promotions predicated on little more than performing "satisfactorily" (Bass & Steidlmeier, 1999). Transformational Leadership:

Transformational leadership refers to the transformation of attitudes, values, and identities of employees within an organizational culture predicated upon the personal commitment to… READ MORE