Many people are in leadership positions but have no idea what kind of leader they are. In this article, I will be describing and comparing two distinct leadership styles that are prevalent in today’s workplace – Transformational Leader vs Transactional Leader.

The Transactional Leader

This leader is a one-way leader; he lets his employees know – in no uncertain terms – what he wants and, expects it to be done without question. This leader does not give room for mistakes; if his employee get it right, he provides rewards for a job well done. If the employee defaults or performs below par, he makes his dissatisfaction known in clear terms and may reward incompetence, default and poor performance with strict punishments. The transactional leader has a no-nonsense, military approach and likes things done his way. He is routine in nature, has a set method for accomplishing tasks and expects full compliance. He is really not interested in making his employees feel good and his high-handedness does not promote employee participation and collaboration. A transactional leader is also described as a ‘managerial leader’.

The Transformational Leader

The transformational leader – as the name suggests – focuses on providing leadership that can inspire, grow and transform his followers. He is not crazy about having things done his way only; he is collaborative and his leadership style is ‘participatory (i.e., he asks for his followers’ input and suggestions, he involves his followers in the decision making process and incorporates followers’ ideas). He may be described as ‘the leader with a human side’. He is the leader that would be concerned about the welfare of his followers and get involved in their lives outside work. He is not just focused on results but also on the people that will be responsible for achieving the results.

While the Transformational Leader enjoys more goodwill and is preferred, the transactional leader is also important and a better choice in certain roles. Transactional leaders are more effective for projects that require strict supervision, adherence to deadlines, adherence to methods and processes and for projects where the margin for error is low or zero

Transformational leaders are best for roles where employee morale is critical to job success (especially for jobs where the quality of the final outcome is directly proportional to the employees’ level of morale)