TRANSFORMATIONAL V. TRANSACTIONAL:
A COMPARATIVE ANALYSIS
COM221-18 Technical Report Writing
Abstract
Abstract 2
List of Figures and Tables 4
Introduction 5
Methodology 7
Results of the Study 9
I. Charisma and the Transformational Leader 9
II. Transactional Management-By-Exception 10
III. Distinctive Behavioral Traits: Emotion v. Non-Emotion 11
IV. Intrinsic and Extrinsic Motivation 12
V. Poor Attitude at Work 13
Discussion of Results 15
I. Significance of the Charismatic Personality Trait 15
II. Management-by-Exception Unsuccessful with Employee Motivation 15
III. Distinctive Behavioral Traits 16
IV. Significance of Intrinsic and Extrinsic Identification 16
V. Poor Attitude at Work 17
Concluding Remarks and Final Recommendation 18
Appendix A 20
Appendix B 22
Glossary 23
References 24
List of Figures and Tables
Figure 1. Transformational Leadership Behaviors 11
Figure 2. Comparison between intrinsic and extrinsic 12
Introduction
Subordinate-level employees, undoubtedly, are influenced by the behaviors of their leaders. The person at the top of the infrastructure can either motivate an employee or demotivate an employee. The level of influence that a boss or a manager has on an employee is profound. Howell and Avolio (1993) show that the organizational leadership is correlated to employee motivation. This finding implies that the type of leadership style that is present in the workplace can determine whether or not an employee is motivated in his or her work.
Employees must stay motivated in their work. Otherwise, businesses and organizations are put at risk of failure. In the literature, two types of leaders are identified that scholars claim have major potential to influence employee motivation: transformational leaders and transactional managers. Bass and Riggio (2006) describe transformational leaders as people who motivate their followers to achieve desirable outcomes. In the process, transformational leaders stimulate their own growth and empower their followers to become transformational themselves. They encourage new ways of thinking and help individual team members see that there are better ways to complete their objectives. They respond to their employees’ intrinsic and extrinsic needs for motivation and form close emotional bonds with each individual. Bass and Riggio (2006) contrast transformational leaders to transactional managers. Compared to transformational leaders, transactional managers are rigid, conformist, and impersonal. They distance themselves from their employees, punishing with the stick and rewarding with the carrot. They over-rely on extrinsic motivators to affect performance outcomes and they remain emotionally unavailable.
Leadership and management are not interchangeable terms, since they have different meanings. Leaders inspire people to follow them, whereas managers have people work for them; leaders offer support, whereas managers enforce rules; leaders are personal and engaging, whereas managers are authoritative. These differences between leaders and managers result in different motivation outcomes. Transformational leaders are clearly better than transactional leaders when it comes to motivating followers.
Based on the knowledge that high levels of motivation are directly correlated with the presence of the human component in the workplace, the transformational leader will have the highest success rate with keeping employees motivated. This paper will endeavor to convince the reader of the hypothesis that transformational leaders tend to be more successful in motivating their workforce than transactional leaders. It will show that personality attributes, such as charisma and approachability, are the determinants of a transformational leader’s success. It will emphasize the strengths of transformational leadership by contrasting them with the weaknesses of transactional leadership, and it will demonstrate why transformational leadership is almost always preferable to transactional. Information regarding the research question and the hypothesis will be discussed in the following sections of this report: Methodology, Results of Study, Discussion of Results, and Conclusion.
Methodology
The methodology for this report mainly consists of the collection and analysis of secondary research sources. No primary research was collected. For the purpose of examining the research question and the hypothesis, internet search engine tools that are provided by the Embry-Riddle Aeronautical Hunt library, including Eagle Search, were utilized to explore the research base. Peer-reviewed articles were selected to ensure credibility. Three textbook were identified that complemented the information and used by the authors of articles. Key words were entered into search engines such as EBSCO Host to find relevant, up-to-date, peer-reviewed publications that discussed empirical studies about the following concepts: “employee motivation,” “transformational leadership,” “transactional leadership,” “transactional management,” “aviation business administration,” “job satisfaction,” “organizational commitment,” and “charisma.”
There were two limitations to this study. First, the study would have been stronger if a qualitative component could have been present. Conducting primary research within a group of aviation business associates would have contributed new findings to the literature base. However, due to time constraints and lack of resources a study of this magnitude tested negative for feasibility. Second, most of the available literature regarding employee motivation and leadership styles is not focused on the field of aviation business management.
In the methodology, walk your readers step by step through the major parts of the study. After you describe each major step, you should also discuss the minor steps that were part of it.
Results of the Study
Transformational leaders possess certain personality traits that are correlated with employee motivation and achievement. One personality trait that is often associated with transformational leadership is charisma. Srithongrung (2011) identified charisma as one of the leadership qualities that have a motivating effect. Shiva & Suar (2012) further elaborate that a transformational leader
can attract followers by his/her charisma, provide individual attention to each subordinate, inspire followers to take up challenges at the grassroots, and serve as a role model by selfless services that provide rational for his/her presence other than mere pecuniary considerations to subordinates (p. 687).
Charisma and the Transformational Leader
Charisma is an indispensable leadership quality. Rainey (2009) explains that charismatic leaders are more successful with motivating employees because they “influence followers not just through traditional or formal authority, but through exceptional personal qualities that invoke strong confidence, loyalty, and commitment from followers” (p. 331). Cleavenger & Munyon (2013) further assert that employees who exude confidence, loyalty, and commitment to their organizations have the best work performance because they are motivated to do excellent work.
Transactional Management-By-Exception
Transactional managers behave much different in comparison to the transformational leader, which is why there are distinctive differences between the two leaders. Transactional style is defined as “leaders motivate followers by recognizing their needs and providing rewards to fulfill those needs in exchange for their performance and support” (Rainey, 2009, p. 327). Exchanging rewards for performance and support equates to management-by-exception.
Management-by-exception is a transactional management style that has a demotivating effect on employees and should be used rarely. Management-by-exception entails a focus on negative feedback in the workplace. Basically, managers who practice management-by-exception do not give feedback to subordinate-level employees except when failures occur or mistakes are made, and this strategy lowers a person’s level of motivation (Barbuto, 2005). Barbuto elaborates:
Management-by-exception has its roots in contingent reinforcement theories whereby subordinates are rewarded or punished for a designated action. Leaders practicing management-by-exception do not get involved with subordinates until failures or deviations in workflow occur (p. 27).
Howell & Avolio (1993) report that contingent reinforcement theories are ineffective employee motivators. Paarlberg (2010) points to his empirical study that shows employees working in an environment where management-by-exception is present report lower levels of employee motivation, job satisfaction, and organizational commitment. Moreover, Barbuto (2005) explains that transactional managers who use management-by-exception are also laissez-faire managers. Laissez-faire managers do not provide guidance or support to subordinates. These managers are totally hands-off and they avoid any emotional relationship with subordinate-level employees. These studies indicate that transactional managers may be less effective motivators because they are unapproachable or unfriendly, implying that friendliness and approachability are important qualities in a leader.
Distinctive Behavioral Traits: Emotion v. Non-Emotion
The transformational leader develops intimate emotional bonds with employees; whereas, the transactional manager avoids emotional connections in the workplace. James MacGregor Burns developed the model of transformational leadership in 1978. In this model, transforming leaders connect personally with their employees in a mutually beneficial relationship. The team and leader motivate each other to achieve higher levels of performance. Burns (1985) writes, “The result of transforming leadership is a relationship of mutual stimulation and elevation that converts followers into leaders and leaders into moral agents” (p. 2). The motivational behaviors of transformational leaders are shown in Figure 1.
Unlike transformational leaders, transactional managers focus on corrective action instead of motivation in their behavioral set. Rainey (2009) explains that transactional managers exhibit these behaviors: contingent reward, passive management by exception, and active management by exception (p. 329). Each one of these behaviors is linked to concepts such as corrective action, punishments, laissez-faire (a hands-off management approach), rule enforcement, negative feedback, and a focus on mistakes that are made in the workplace. The concept of employee motivation is not associated with management-by-exception, transactional management, or laissez-faire management. To the opposite effect, Smothers (2008) writes that these styles of management are associated with poor workplace morale and substandard performance. Moreover, the corrective actions that these types of managers employ can provoke negative employee reactions if used improperly.
Intrinsic and Extrinsic Motivation
Transformational leaders are highly successful because they know to draw from both intrinsic and extrinsic sources of motivation. Intrinsic motivation is driven by personal goals. In contrast, extrinsic motivation is driven by external rewards. Cameron & Pierce (1994) conducted a study that shows how employees expect certain rewards for their work, and these expectations are referred to as expectancy theory. Basically, employees are motivated to carry out a task exceptionally well when they perceive they will obtain certain benefits or incentives for their work; however, not every employee is motivated by the same rewards. Figure 2 shows the distinctions between an intrinsic person and an extrinsic person. Both types of people strive for completely different rewards.
As illustrated in Figure 2, intrinsically-motivated employees are starkly different from extrinsically-motivated workers. Intrinsically-motivated workers tend to thrive off of self-gratification instead of money. Extrinsic workers are just the opposite. They want to reap monetary rewards for their work and they often exceed expectations. Barbuto (2005) emphasized that one of the reasons transactional managers fail with motivating employees is because they do not identify them as intrinsic or extrinsic. Instead, transactional managers exchange one type of reward for performance, and it is the same reward for all employees.
Transformational leaders, on the other hand, study their followers’ behaviors for the purpose of identifying them as intrinsic or extrinsic (Barbuto, 2005). They demonstrate a high regard for their employees by taking the time to learn about, and respond to, their personal motivators. This expands employees’ opportunities for exploring their own creativity, and allows them to contribute to the team in their own unique way. In contrast, transactional managers impose a one-size-fits-all solution, which some of their employees may find limiting.
Poor Attitude at Work
Leadership styles shape employee attitudes, define office morale, and determine the level of motivation to do work. Othman & Suleiman (2013) claim that low morale leads to negative behaviors such as: high absenteeism, disgruntled demeanor, poor work performance, lack of organizational commitment, and frequent tardiness. Table 1 illustrates a comparison between non-motivated employees and motivated employees.
The behaviors on the left-side of Table 1 have potential to interfere with a business or organization’s productivity, but the behaviors on the right-side have potential to enhance productivity. Othman and Suleiman (2013) linked this information to the business administration sector through reporting that those working in the business administration field had poor attitudes at work, which are caused by lack of motivation.
Discussion of Results
Review of the literature verifies that transformational leaders are naturally capable of getting people to follow them because of their charismatic quality, which contrasts with transactional managers’ coercive tactics. Transformational leaders are more likely to be effective with motivating employees in comparison to transactional managers because they focus on the human component in the workplace. Transformational leaders are effective because of their naturally extroverted and disarming personalities. Conversely, transactional leaders are ineffective because they lack the personality attributes of transformational leaders. These results will provide managers convincing evidence of the tactics and attitudes that they should embrace or shun in order to achieve better workplace outcomes.
Significance of the Charismatic Personality Trait
Charisma is a defining characteristic of transformational leaders. Their charisma is a motivator in the workplace within itself because they are capable of getting people to follow them without the application of coercion. It is almost as though transformational leaders have a natural born quality to lead and to motivate because of their charismatic personalities. Employees are attracted to a charismatic leader because charismatic leaders exude trustworthiness, confidence, competence, and congeniality. Therefore, they feel more able to confide in their leaders, ask them questions, share their concerns, and receive their guidance. This creates a strong emotional bond between transformational leaders and their followers that is personally motivating. Furthermore, it is a naturally forming bond. This result suggests that some people truly are “born to lead;” this may offer some perspective on how leadership should “feel,” and could help managers decide whether they are suited to the role.
Management-by-Exception Unsuccessful with Employee Motivation
Management-by-exception is a laissez faire management approach that not only lacks an emotional component, but avoids developing personal relationships with employees. Transactional managers who practice management-by-exception never offer guidance or support to their employees, and this has an obvious demotivating effect on employees. There is no incentive to work hard when hard work will not be rewarded. The only incentive to do well is fear of failure. Employees who are managed this way will have low motivation, bad attitude, and poor morale, and companies that employ this management method will have high turnover. This is an important result because it warns that specific managerial styles should be avoided, as they are shown to be counterproductive.
Distinctive Behavioral Traits
Transformational and transactional behaviors are at the extreme ends of the spectrum of leadership behaviors. In terms of behaviors, the difference between transactional and transformational leadership is the difference between task-oriented and people-oriented leadership. Transactional leaders prioritize meeting deadlines and achieving goals. They are task managers first, and leaders of people second. Transformational leaders prioritize the needs of the team members over the objectives of the organization. They are coaches, mentors, and teachers first, and managers second. The significance of this observation is that effective leaders stand behind their followers, not in front of them.
Significance of Intrinsic and Extrinsic Identification
Transactional leaders rely on extrinsic sources of motivation and use a carrot-and-stick approach to discipline and rewarding. This approach is inappropriate for most situations besides those that demand solemn observance of employee duties. The carrot-and-stick method may instill fear of failure or lateness, but it does not cultivate a sense of enjoyment of the task at hand. Employees who lack enjoyment of their jobs tend to become demotivated. In contrast, transformational leaders motivate by addressing their followers’ intrinsic sense of self-worth. By setting higher expectations for their followers and by entrusting them with greater responsibility, transformational leaders motivate their followers to do more than they originally intended. As a result, their workers tend to feel more empowered, which leads them to have greater job satisfaction and to be evaluated at higher job performance levels. This result teaches managers how to interact with their employees.
Poor Attitude at Work
It is evident that having a personable, charismatic, and engaged leader can cure or prevent low office morale and poor employee attitudes toward work. On the other hand, having a boss who is impersonal and disinterested can contribute to poor attitudes and low office morale. It’s obvious that employee attitudes are affected by the environment they are in when they are at work. Leaders play an important role in shaping the work environment. A charismatic leader may cultivate an inviting and conducive atmosphere, but a transactional manager may create an oppressive working environment. The significance of this is that managers are shown to be fundamental to and responsible for the type of environment that is provided for their employees. (Try to connect this to the Aviation Business Industry because this industry is your primary audience.)
Concluding Remarks and Final Recommendation
In conclusion, it can be determined that the hypothesis is more true than false because transformational leaders possess qualities that transactional managers lack. These qualities promote high levels of employee motivation. Through charisma, individualism, inspiration, communication, and caring relationships with employees, the transformational leader is able to motivate employees without coercion. Moreover, the transformational leader motivates employees by attending to each individual’s intrinsic goals or extrinsic motivators. Transactional managers, in contrast, practice strategies that actually discourage high levels of motivation. Strategies such as active and passive management by exception and laissez-faire approaches have been shown to negatively impact the employee. Furthermore, transactional managers do not only discourage personal relationships with their followers, but they make an effort to avoid making emotional connections.
A confident recommendation can be made at this point. Transformational leadership strategies should be implemented in working environments because these strategies clearly promote the individual in regards to excelling in his or her work. Knowing whether or not an employee is intrinsically motivated or extrinsically motivated is crucially important. Therefore, even if a person in a leadership position is not a naturally-born charismatic person, he or she can implement the strategy of identifying employees as intrinsic or extrinsic. In the event a manager wanted to avoid emotional connections with employees, he or she could administer a simple survey questionnaire designed to gauge what type of employee each person is.
For future research, it would be beneficial to those working in aviation if researchers would conduct an ethnological study that explored the presence or non-presence of transformational leadership styles in the workplace. Research of this nature could easily be applied to those working in the field of aviation. Currently, the scholarly research base is over-flooded with information about motivation and leadership styles in public administrative bureaucracies; however, information about leadership styles and motivation within fields such as aviation business management and engineering seem to have been overlooked by scholars. One report was identified that discussed a prevalence of poor attitudes within the field of business administration. This report may work to supplement the research that is available now and hopefully lead to a more in-depth study about employee motivation in aviation business administrative work environments.
Thank you for your interest in this report. The information should be beneficial in getting to know yourself within your work environment, and it should be equally as beneficial in getting to know your leader and how that person works to motivate you and your co-workers. If you have any questions, contact me via email:
Glossary
Extrinsic – Motivation that comes from outside of the individual (i.e. money).
Intrinsic – Motivation that comes from inside of the individual (i.e. self-gratification).
Laissez-faire – A hands-off management style where manager does not offer support or guidance to subordinates.
Management-by-exception – Management style that avoids personal interactions with employees except in instances where negative feedback is given about mistakes.
Transactional – Managers who engage with employees through offering rewards and punishments in exchange for services.
Transformational – Leaders who possess charisma and focus on the human component in the workplace.
References
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Paarlberg, L. E., & Lavigna, B. (2010). Transformational leadership and public service motivation: Driving individual and organizational performance. Public Administration Review, 70(5), 710-718. Retrieved from http://search.proquest.com.ezproxy.libproxy.db.erau.edu/docview/853403307
Rainey, H.G. (2009). Understanding and managing public organizations. San Francisco, CA: Jossey-Bass.
Shiva, M., & Suar, D. (2012). Transformational leadership, organizational culture, organizational effectiveness, and programme outcomes in non-governmental organizations. International Society for Third-Sector Research, 23(3), 684-710. doi: 10.1007/s11266-011-9230-4
Smothers, A. E. (2008). Perceived leadership style of a mayor and its impact on organizational commitment of municipal employees. ProQuest.
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