Transformational Transactional Leadership Leadership is one of the four major functions performed by managers. There are various leadership styles which managers adopt in different situations, problems, and organizational issues depending upon the sensitivity of their working environment (Hoye II 2005). These leadership styles include transformational leadership, transactional leadership, charismatic leadership, authentic leadership, paternalistic leadership, autocratic leadership, etc. These leadership styles shape the way a leader manages, motivates, encourages, trains, and directs its followers (Hannah, Woolfolk, & Lord 2009). This paper compares and contrasts transactional, transformational, and authentic leadership styles or approaches with a major focus on explaining how leaders motivate their followers using each of these approaches and identifying the most effective approach among them. The discussion is based on human resource management and organizational behavior theories; specifically the leadership and motivational theories.

1. Transactional Leadership:

Transactional leadership, often called as managerial leadership approach presents the basic role of a manager as a leader. That is, a manager has to ensure that its subordinates are performing their day-to-day job responsibilities in an effective and efficient way. He motivates these subordinates using different monetary and non-monetary benefits, while at the same time, has the right to punish them for their poor performance at the workplace (Bonnici 2011). In a transactional leadership role, a manager does not strive to bring a change or something new in the organizational processes or culture. Rather, he manages the day-to-day job tasks of his followers to keep the system running according to the set standards. He finds inefficiencies within the performance of his followers and tries to remove them in order to achieve operational excellence (Lussier & Achua 2010).

The way a transactional leader manages his followers is considered as the most common motivational style in the contemporary business world. Reason being, the leader uses rewards, promotions, and bonuses to the high performers and gives punishments or demotes the poor performers (Hoye II 2005). According to the Maslow's hierarchy of needs theory, a transactional leader basically motivates his followers in their purely basic needs and ignores the higher and more important needs like self-actualization, self-efficacy, achievement, etc. (Dereli 2010). He motivates them using an efforts exchange model in which he gives rewards for good performance, or otherwise, punishes for poor performance. A transactional leadership approach is effective for an organization when there is a need to keep the workflow constant. Transactional leaders use extrinsic motivational techniques like rewards, bonuses, etc. Therefore, the followers of these leaders lack the intrinsic motivation in their personalities. This thing restricts them from thinking out of the box or doing something for organizational innovation and competitiveness.

2. Transformational Leadership:

Unlike transactional leadership, transformational leadership mainly focuses on achieving organizational goals in an innovative and creative way. The leaders possessing transformational leadership qualities strive to bring change in the existing operational setup, policies, and procedures of their organization. In addition to motivating their followers through different financial and non-financial benefits, transformational leaders also encourage them to contribute towards organizational competitiveness. This leadership approach is also useful in enhancing the employee morale by incorporating a sense of self-efficacy and self-actualization in their hearts. Thus, a transformational leader not only motivates his followers, but also provides them an opportunity to develop their professional career alongside helping the organization in achieving competitiveness (Bonnici 2011).

In a transformational leadership style, the leader motivates his followers through his visionary and inspirational personality and professional traits. He tries to achieve a good balance between employees' professional growth and their organizational performance in the industry. He persuades his followers to subordinate their personal interests to the interests of their organization. At the same time, he gives them challenging tasks to complete in tight deadlines. These tasks enable the followers to learn new skills like pressure handling, time management, analytical skills, etc. (Dereli 2010). Converse to a transactional leader, a transformational leader believes in individualized...

He acts as a mentor for each individual at the workplace -- listens to his queries, resolves his issues, and supports him in achieving his targets in an effective and efficient way. He tries to create intrinsic motivation among his followers which is highly essential for individuals' self-development (Hoye II 2005).
Moreover, a transformational leader motivates his employees by stimulating their intellectual abilities through different techniques; including brainstorming, management by objectives (MBO), internal marketing practices, team projects, individual targets, etc. He encourages creative thinking and innovative ideas that can bring a positive change in the organization. He talks about mission, vision, and strategic objectives of the organization before his followers in order to engage them in both emotional and professional way. In addition, he ensures that his followers have an effective communication channel to interact with other departments and give their feedback to the upper level management. He inspires them through his personality traits, achievements, and professional growth over the years. All these intrinsic motivational techniques are largely helpful in increasing the employee satisfaction and commitment towards their organization. Therefore, they are considered as the major outcomes of transformational leadership style in a typical business organization (Lussier & Achua 2010).

3. Authentic Leadership:

Authentic leadership is a relatively newer concept than the aforementioned leadership styles. This approach takes the professional traits of transformational leaders and merges them with the interpersonal traits of a leader. That is, a leader not only has to be professional competent to lead the organizational members effectively, but also has to be interpersonally capable to inspire them with his personal traits and qualities. An authentic leader has to strive to build meaningful relationships with his followers by supervising and motivating his followers in a friendly and supportive way. He is considered honest to his duties, vivacious in his thinking and man of integrity in his dealings. Therefore, authentic leadership can confidently be called as a character-based leadership style in which the leader not only motivates his followers, but also proves to be true to his own job position. He shows little or no concern for monetary rewards for himself; rather, gives more emphasis on inspiring and motivating the organizational members (Bernthal & Wellins 2006).

Authentic leadership approach also requires a leader to handle disturbances and issues which the organization faces and try to resolve them through the efforts of his subordinates. For an authentic leader, it is also necessary to accept mistakes whole heartedly without losing heart or blaming others negative outcomes. Like transformational leaders, authentic leaders also encourage their followers through different motivational techniques like rewards and benefit systems, team building, feedback, power and authority, job enlargement and enrichment, and others (Basefsky, Maxwell, Post, & Turner 2004).

THE MOST EFFECTIVE LEADERSHIP APPROACH

After reviewing the transactional, transformational, and authentic leadership styles for their effectiveness in motivating followers, it can be argued that transformational leadership is the most effective style for a manager to become an effective leader. There are various reasons in support of this argument. First of all, a transformational leader thinks out of the box to bring innovation in the organization instead of keeping the system running in traditional patterns. In addition to using monetary and non-monetary rewards and benefits to motivate his followers, a transformational leader also encourages them to present creative ideas which can positively change the existing organizational processes. For instance, if this leadership style is adopted by a leader in the procurement department of a manufacturing concern, he can encourage his followers to think of the ways in which the inventory management, demand and capacity options, supplier relations, and other business affairs of the procurement department can be improved (Hoye II 2005).

Since a transformational leader also ensures an effective communication between different departments, the employees in procurement department can effectively coordinate with other concerned departments like Production, Finance, Supply Chain, etc. Moreover, transformational leadership focuses on both intrinsic and extrinsic motivation of employees which is essential for getting the best results…