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How Transactional Leadership Can Motivate Success In Your Team

When you hear the words “leadership” or “management”, what comes to mind?

Perhaps it’s a manager who enforces the company line, and engages in ongoing supervision to make sure their team is getting things done accordingly?

If so, your understanding of leadership is based around the transactional style.

Team of young people having a meeting


This leadership style sees the leader conforming to the structure and expectations already in place within an organisation. They are primarily enforcing and implementing, rather than curating and changing.

Because of this there is a strong emphasis on results, with success or failure determined by conformity to the established orthodoxy.

For an example of transactional leadership, take a look at this process:

  • A leader sets goals based on organisational priorities.
  • They outline the processes required to achieve these goals.
  • The order is then given for employees to begin working.
  • Results are evaluated on an ongoing basis, in line with the expectations of the organisation.
  • Reward or punishment is given according (and proportionately) to what is achieved.

In this leadership style there is a strong focus on supervision, performance reviews, policies, and procedures. Individual and group performance is evaluated in the context of organisational goals, and evaluation is ongoing to make sure any shortfalls are highlighted and addressed.

There is a clear chain of command, and rewards and punishments are used to motivate team members to achieve the desired results. There is a guiding belief that people respond best to this type of encouragement (or discouragement), and that these form the basis of the transaction that the leadership style is named after.

To understand how transactional leadership contrasts with other styles, you can read our blog post.


While all leaders will have a rich combination of traits and guiding beliefs, and it is rarely the case that any leader fits squarely into one type of leadership, there are some traits commonly associated with the transactional style:

  • Transactional leaders have a strong understanding of the aims of the organisation: This is vital for them to function effectively, and forms their frame of reference for evaluating the work taking place.
  • Transactional leaders are often set in their ways: A thorough understanding of company policy and expectations means that they are guided from above rather than below, and as a result, flexibility and willingness to change are less prevalent than in other styles.
  • Transactional leaders like to follow the rules: This stems from the same respect and regard for the established orthodoxy. A belief that the rules exist for a reason, and a history of seeing success when they are followed, means that a leader is likely to continue following them.
  • Transactional leaders often focus on the details: A reliance on supervision and performance review means that a leader will have a good understanding of their team’s performance and how to improve it in line with the broader organisational vision.

Is transactional leadership effective

As with any leadership style, the ultimate answer to this question depends on the skills of the leader.

Conceptually, transactional leadership is most effective in large workplaces where an emphasis on structure provides a backbone for employees to work around. It also thrives in organisations with a clearly defined and well designed internal structure: Because this leadership style is built around achieving results in line with the existing organisational culture, it relies on these being healthy to function.

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While some consider transactional leadership to be out-dated and aligned with employee priorities that are no longer seen in the workplace, the benefits of this style, when implemented correctly, are plentiful.

In order to best motivate their teams to succeed, a leader using the transactional style needs to ensure their team understand the reasons for its use. They also need to ensure that the overarching company vision is communicated clearly, and that employees are bought-in as much as they can be.

For this to happen, rewards and punishments need to be proportional and effective. Understanding that there will be consequences when work is not carried out to the expected standard can be a healthy aspect of work: However if these consequences are felt to be disproportionate or unfair, they can quickly become demotivating.

An effective transactional leader engages in ongoing supervision to understand the work that is taking place, to collect feedback on any challenges, and to offer guidance on how to do things better.

In the transactional leadership process outlined above, we said that “a leader sets goals based on organisational priorities.” Depending how this step is approached, a leader can either motivate or put off their team.

For instance: If the goals are arbitrary, difficult, unrealistic, or some combination of the three, people are not likely to be engaged. If, however, clear and fair goals are communicated, higher engagement can be expected.

In real terms this can be as simple as sitting down with your team (either individually or collectively) and asking what they think of your planned goals. Giving them the opportunity to express their concerns, and to overlay their own ideas and targets on top of the goals you are setting out brings the two into closer alignment.


This overview of the transactional leadership model and its potential benefits was written as a primer, to show the style can be used effectively in a workplace.

Although some consider it to be out-dated, the guiding logic of transactional leadership is sound. In an organisation with effective internal procedures, a leader who directs and evaluates work accordingly and the team who work under them can both thrive.

To learn more about transactional leadership, the other leadership styles, and how to improve your abilities as a leader, get in touch. We can help you to deliver success.


About the author

Graham Wilson

Graham Wilson

I enjoy and specialise in teaching leadership skills, how to create winning strategies, how to build high performance cultures. Outcomes and results are the most important measures for me!