Maslow's Hierarchy of Needs demonstrates that most people are more likely to act when they expect rewards or fear punishment. Any social system is more effective when a hierarchy clearly exists. People who are hired to work, implicitly agree to heed all of their manager's instructions, and that is the main reason that subordinates are employed.

Transactional leaders operate by constructing clear algorithms by which they indicate clearly the expectations of subordinates, as well as the rewards received for meeting those expectations. Although punishment is not always explicated, the concept is implicitly understood, and systematic structures for discipline are usually extant.

The first stage of Transactional Leadership consists of the negotiation of a contract, thus the subordinate receives salary and other defined benefits, and the company (and by extension the new employee's manager) receives authority over the subordinate.

Work that is delegated to an underling by a Transactional Leader is expected to be done; no excuses are acceptable and no pleading for more resources will be heeded. Just as a subordinate is rewarded for accomplishing his assigned duties, he is personally punished for failures that occur on his watch.
Often the transactional leader will work under the expectation that if something isn't broke, don't fix it. In other words, if a principle is operating to expectations, it doesn't warrant notice. Along with this is the expectation that anything above expectations merits praise and rewarding, and anything below expectations needs corrective action.

There are several differences between Transformational and Transactional Leadership. Transformational leadership denotes positive change, and persuading others to participate in achieving this positive change. A good transformational leader will impart the same enthusiasm for achieving the team's goals that the leader himself has. A transactional leader, on the other hand, is concerned with a hierarchical approach -- one of stating what he expects from his subordinates and what they may expect from him. There is no sense of "team" and the subordinates may or may not become personally enthusiastic about completing the task. They may receive praise if the leader deems their work acceptable -- or they may be penalized for poor work.

Transactional Leadership leans more towards the management side when put on a Leadership vs. Management scale. Even though there is a lot of research that points out its flaws, Transactional Leadership is still used widely among many managers.

People are not simply driven by monetary rewards and cannot be assumed to be working examples of ideal rational individuals. Psychological theories that attempt to define and describe motivation and resulting actions are Pavlov's Classical Conditioning and Skinner's Operant Conditioning. These theories were devised using simplistic animal experiments and do not correctly model complex societal and human characteristics.

In practice, there is sufficient truth in Behaviorism to sustain Transactional approaches. This is reinforced by the supply-and-demand situation of much employment, coupled with the effects of deeper needs, as in Maslow's Hierarchy of Needs. When the demand for a skill outstrips the supply, then Transactional Leadership often is insufficient, and other approaches are more effective.

Daiv Russell is a marketing and management consultant with Envision Web Marketing. Read more Management Articles, learn about Abraham H. Maslow and Maslows hierachy of needs.

Article Source: http://www.articleset.com