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Transactional leadership, also known as managerial leadership, focuses on the role of supervision, organization, and group performance. Leaders who implement this style focus on specific tasks and use rewards and punishments to motivate followers.﻿﻿

This theory of leadership was first described in by sociologist Max Weber and further explored by Bernard M. Bass in the early 1980s. Take a closer look at how the transactional style works as well as some of the potential benefits and downsides of this style.

Basic Assumptions of Transactional Leadership

People perform their best when the chain of command is definite and clear.

Rewards and punishments motivate workers.

Obeying the instructions and commands of the leader is the primary goal of the followers.

Subordinates need to be carefully monitored to ensure that expectations are met.﻿﻿

This theory takes a behavioral approach to leadership by basing it on a system of rewards and punishments.

Athletic teams also rely heavily on transactional leadership. Players are expected to conform to the team's rules and expectations and are rewarded or punished based on their performance. Winning a game might mean accolades and bonuses while losing might lead to rejection and verbal castigation. Players often become highly motivated to do well, even if it means suffering pain and injury.

Unlike transformational leaders who tend to be forward-looking, transactional leaders are interested in merely maintaining the status quo.﻿﻿ Transformational leaders try to sell their ideas and vision to followers. Transactional leaders, on the other hand, tell group members what to do and when to do it.

How Transactional Leadership Works

In transactional leadership, rewards and punishments are contingent upon the performance of the followers. The leader views the relationship between managers and subordinates as an exchange - you give me something for something in return. When subordinates perform well, they receive a reward. When they perform poorly, they will be punished in some way. Rules, procedures, and standards are essential in transactional leadership.

They do not, however, act as catalysts for growth and change within an organization. Instead, they are focused on maintaining this as they are and enforcing current rules and expectations.

These leaders do tend to be good at setting expectations and standards that maximize the efficiency and productivity of an organization.﻿﻿ They tend to give constructive feedback regarding follower performance that allows group members to improve their output to obtain better feedback and reinforcement.

When Is Transactional Leadership the Most Effective?

Followers are not encouraged to be creative or to find new solutions to problems. Research has found that transactional leadership tends to be most effective in situations where problems are simple and clearly defined.﻿﻿

It can also work well in crisis situations where the focus needs to be on accomplishing certain tasks. By assigning clearly defined duties to particular individuals, leaders can ensure that those things get done.

Transactional leaders focus on the maintenance of the structure of the group.﻿﻿ They are tasked with letting group members know exactly what is expected, articulating the rewards of performing tasks well, explaining the consequences of failure, and offering feedback designed to keep workers on task.

While transactional leadership can be useful in some situations, it is considered insufficient in many cases and may prevent both leaders and followers from achieving their full potential.

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How a Transactional Leadership Style Works

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Transactional leadership, also known as managerial leadership, focuses on the role of supervision, organization, and group performance. Leaders who implement this style focus on specific tasks and use rewards and punishments to motivate followers.﻿﻿ This theory of leadership was first described in by sociologist Max Weber and further explored by Bernard M.

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What is authentic leadership?

It continues to surprise me how many leaders attempt to be one way at work, while their "true" personality emerges outside of work. Once a CEO reminded me, "Leadership is acting." And it surprises me when these same leaders seem shocked or confused when their employees don't trust them, don't like them, and can't really wait to work elsewhere.

Authenticity has been explored throughout history, from Greek philosophers to the work of Shakespeare ("To thy own self be true." -Polonius, Hamlet). Authentic leadership has been explored sporadically as part of modern management science, but found its highest levels of acceptance since Bill George's 2003 book, Authentic Leadership.

But what is authentic leadership?

While different theorists have different slants on the concept, most agree that:

1. Authentic leaders are self-aware and genuine. Authentic leaders are self-actualized individuals who are aware of their strengths, their limitations, and their emotions. They also show their real selves to their followers. They do not act one way in private and another in public; they don't hide their mistakes or weaknesses out of fear of looking weak. They also realize that being self-actualized is an endless journey, never complete.

2. Authentic leaders are mission driven and focused on results. They are able to put the mission and the goals of the organization ahead of their own self-interest. They do the job in pursuit of results, not for their own power, money or ego.

3. Authentic leaders lead with their heart, not just their minds. They are not afraid to show their emotions, their vulnerability and to connect with their employees. This does not mean authentic leaders are "soft." In fact communicating in a direct manner is critical to successful outcomes, but it's done with empathy; directness without empathy is cruel.

4. Authentic leaders focus on the long-term. A key tenet in Bill George's model is the company leaders are focused on long-term shareholder value, not in just beating quarterly estimates. Just as George did as CEO of , and as Bezos has done for years at Amazon, leaders realize that to nurture individuals and to nurture a company requires hard work and patience, but the approach pays large dividends over time.

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What are your motivation triggers? Take the "Your Engagement Profile Quiz" to find out.

Check out Kevin Kruse's new book, Employee Engagement 2.0, and discover how to turn apathetic groups into emotionally committed teams.

Kevin Kruse is a NY Times bestselling author and serial entrepreneur. For insider tips and exclusive content, join his newsletter at kevinkruse.com.

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What is authentic leadership? It continues to surprise me how many leaders attempt to be one way at work, while their "true" personality emerges outside of work. Once a CEO reminded me, "Leadership is acting." And it surprises me when these same leaders seem shocked or confused when their employees don't [...]