What defines a transactional leader?

A transactional leader is defined primarily by their approach to motivation, which involves appealing to workers' self-interest. This leadership style operates on a system of rewards and penalties, establishing clear expectations and performance standards. When employees meet these defined goals or tasks, they receive specific rewards, such as bonuses or praise. Conversely, failure to meet their responsibilities may lead to negative consequences. This method effectively ensures that employees are motivated to perform their duties in a manner that aligns with the organization's objectives.

The focus on self-interest is central to transactional leadership because it ties the leader's ability to motivate their team directly to the individual goals and desires of the workers. This creates a structured environment where employees know what is expected of them and what they can gain by fulfilling their roles effectively.

In contrast, a focus on team development emphasizes growth and collaboration, while resisting change and innovation reflects a more static, less adaptable leadership style. Encouraging collaborative decision-making suggests a more democratic or transformational approach, which involves seeking input and fostering shared leadership rather than strictly adhering to transactional principles that prioritize individual interest and adherence to set tasks.