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The Transactional Leadership Theory is based on the premise of an exchange. Moreover, it views leadership as an agreement between a superior and subordinate regarding a reward or the avoidance of punishment. There are two factors that guide the Transactional Leadership Theory. Such factors include management by exception and contingent rewards. Additionally, there are common characteristics that exist among transactional leaders. This leadership theory has mixed supported in the literature; it is also evidenced within the profession of occupational therapy and pop culture. The Transactional Leadership Theory holds relevance in occupational therapy, as it can be applied to working with a certified occupational therapist assistant (COTA) or a student-educator relationship. Additionally, it is sometimes referenced comedically in pop culture, as demonstrated by the clip from The Office. Like most theories, the Transactional Leadership Theory has strengths and weaknesses, influencing its applicability in present society.

Keywords: transaction, management by exception, contingent rewards, characteristics, methods, findings, COTA, student, The Office, strengths, weaknesses

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The Transactional Leadership Theory is based on examining the transactions or exchanges between a leader and his or her subordinates (Braveman, 2016).

A transaction: whenever the leader promises rewards and benefits contingent upon the subordinate's fulfillment of agreements and their contributions to goal achievement (Bass, 1990). This could be earning a raise after meeting high productivity levels, receiving PTO after accruing enough hours, or providing a negative review after an employee fails to meet expectations.

Transactional leadership consists of two factors: management by exception and contingent rewards (Bass, 1985).

Management by exception (active): the leader closely oversees the work an employee is doing and interjects immediately if they identify errors being made.

Management by exception (passive): The leader does not take action or correct the problem until the employee has completed the work. After which, the leader gives negative feedback in hopes that the work improves in the future.

Contingent rewards: rewards and recognition exchanged for accomplishment of assigned work duties or reaching organizational objectives. (Ex. Offering praise and recognition to employees meeting expectations and refraining from doing so with employees who are not meeting expectations.)

Transactional leadership style characteristics: (St. Thomas University, 2018)

Focused on short-term goals

Favor structured policies and procedures

Thrive on following rules and doing things correctly

Revel in efficiency

Very left-brained

Tend to be inflexible

Opposed to change

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Research is mixed on whether this leadership style is effective...

Riaz & Haider (2010)
Methods: The population for this study was private sector organizations in Pakistan. Researchers focused on lower and middle level management employees who had been with their organization at least five years. Questionnaires were distributed to each organization utilizing a probability convenience approach. The questionnaires included background information, purpose of the study, and confidentiality details. These questionnaires were then completed anonymously and reviewed by researchers (Riaz & Haider, 2010).

Transactional Leadership was measured by two dimensions: contingent reward and contingent punishment. These two dimensions were then divided into two separate scales. On the other hand, Transformational Leadership was assessed using the Transformational Leadership Behavior Inventory. Career satisfaction and job success were also assessed (Riaz & Haider, 2010).

Findings: Researchers found employees viewed Transformational Leadership more favorably than Transactional Leadership. However, employees perceived their management to employ Transactional Leadership more frequently. Despite this, both leadership styles were found to have positive outcomes. Transformational Leadership demonstrated a significant relationship with career satisfaction. Transactional Leadership had a positive significant relationship with job success when compared to Transformational Leadership. Additional findings show that positive rewards, such as praise and recognition, are more significant and prolong performance when personalized to the individual (Riaz & Haider, 2010).

Ruggieri (2009)
Methods: Sixty psychology students were randomly assigned to one of 10 groups. Each group then held two additional members who were instructed to act as leaders and worked collaboratively with researchers. Transformational and Transactional Leadership styles were alternated throughout the study. Students then completed a questionnaire at the end of the study to determine group task satisfaction and were instructed to identify the leader of the group. The Adjective Check List was used by students to describe the group leaders (Ruggieri, 2009).

Findings: Results of the questionnaire indicated Transactional Leadership was associated with less favorable adjectives, such as needing more dominance, order, and poor originality. However, this style was also linked to high ideal self, high military leadership, and high intelligence. Transformational leadership included more favorable adjectives including endurance, nurturance, change, creative personality, and high intelligence. Both leadership styles were viewed positively, but with more sensitivity seen in Transformational Leadership. Transformational Leadership also had greater levels of satisfaction than Transactional Leadership (Ruggieri, 2009).

Snodgrass, Douthitt, Ellis, Wade, & Plemons (2008)
Methods: Five-hundred occupational therapists (OTs) were randomly surveyed to determine therapists' perceptions of their rehabilitation manager's leadership style. The Multifactor Leadership Questionnaire Form 5X was used with the self-designed demographic questionnaire (Snodgrass, Douthitt, Ellis, Wade, & Plemons, 2008).

Findings: Researchers found Transformational Leadership was positively correlated with effort, effectiveness, and satisfaction, or more positive leadership outcomes. However, Transactional Leadership was negatively associated with effort, effectiveness, and satisfaction (excluding contingent reward).  Transactional's contingent reward was positively associated with the three leadership outcomes. Therapists valued rewards that were personally meaningful (Snodgrass et al., 2008).

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Our course text includes additional evidence for Transactional Leadership (Bravemen, 2016, p. 14).

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Relationship with OTR/L and COTA

The OTR/L asks the COTA to conduct a therapy session with a client and document on it. If the COTA successfully completes the tasks, the OTR/L will record the good work which would be used during annual performance evaluations for the COTA and could result in a raise.

The more that the reward is directly tied to a desired behavior, the more likely it is to happen (Braveman, 2016, p. 13). For example, if the OTR/L says to the COTA, “Can you please conduct the session with this client and then you can go home early.” The reward of going home earlier is a direct reward from the task whereas the annual review may seem farther away and less motivating.

Another example is when the winning groups were rewarded with Klondike for winning the case study presentations.

Relationship with OTR/L and Level I Student

An example of management by exception (active) would be the practitioner observing a Level I student administer and score an assessment after evaluating a client. The practitioner would closely observe the student to ensure he or she correctly follows the assessment's instructions and scores appropriately based on observation. The therapist is able to intervene during the assessment and scoring process to help as needed and prevent errors that would invalidate the assessment.

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In this scene from The Office, Andy implements a basic rewards system at work where employees can redeem points for prizes.

Transactional Leadership Theory is utilized when presenting contingent rewards based upon employees work accomplishments and productivity.

Other characteristics of this leadership style that are presented include:

Being focused on short-term goals

Favors specific procedures

Promotes efficiency

Begin clip at 0:56 and end at 1:37 to observe how transactional leadership is used.

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How to Get People to Work Harder - The Office US

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Strengths:
1. Rewards may provide motivation for some
2. Potentially clear expectations
3. May improve short-term productivity

Weaknesses:
1. Reward based motivation may be limited for some
2. Individual focus rather than team effort
3. Lack of autonomy

(Hughes, 2019).

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Bass, B. M. (1990). Transformational leadership: Theory, research, and managerial applications. New York, NY: Free Press.

Braveman, B. (2016). Leading & Managing Occupational Therapy Services : An Evidence-based Approach: Vol. Second edition. F.A. Davis.

Hughes, K. (2019, March 20). Leading with transactional leadership. Project Manager. https://www.projectmanager.com/blog/transactional-leadership

Riaz, A., & Haider, M. H. (2010). Role of transformational and transactional leadership on job satisfaction and career satisfaction. Business and Economic horizons, 1(1), 29-38.

Ruggieri, S. (2009). Leadership in virtual teams: A comparison of transformational and transactional leaders. Social Behavior & Personality: An International Journal, 37(8).

Snodgrass, J., Douthitt, S., Ellis, R., Wade, S., & Plemons, J. (2008). Occupational therapy practitioners' perceptions of rehabilitation managers' leadership styles and the outcomes of leadership. Journal of Allied Health, 37(1), 38-44.

St. Thomas University. (2018, May 8). What is Transactional Leadership? How Structure Leads to Results. STU Online. https://online.stu.edu/articles/education/what-is-transactional-leadership.aspx

The Office. (2016, February 18). How to Get People to Work Harder. Youtube. https://www.youtube.com/watch?v=lQYzT49hyKo