This paper examines the relationship between emotional intelligence and leadership effectiveness, focusing on transformational versus transactional leadership models. Transformational leaders inspire employees by appealing to moral values and setting challenging goals, a capacity that likely depends on strong emotional intelligence skills. The paper reviews major leadership theories from the scientific literature, discusses the dispositional basis of transformational leadership, and contrasts the inspiration-based approach of transformational leaders with the exchange-focused mechanisms of transactional leadership. The analysis suggests that emotional intelligence serves as a critical moderator enabling leaders to pick up on employee emotional cues and align individual goals with organizational objectives.
Emotional intelligence is highly relevant to leadership in today's dynamic environment. When a leader is able to pick up on important emotional cues from employees, they are more capable and equipped to align these individuals with organizational goals. It is also probable that these skills are correlated with the skills necessary for a leader to behave as a transformational leader in an organizational context. Transformational leadership is one of the most popular leadership models in the literature and has shown to correlate with performance in many settings. This analysis will contrast transformational leadership with transactional leadership.
Researchers have produced something like six to eight major models of leadership that have gained in popularity, depending on the perspective, in the scientific literature over the last sixty years, and there have been countless more that have emerged from outside scholarly literature (Turner & Muller, 2005; Kilburg & Donohue, 2011). Competing theories include such perspectives as trait theory, situational theory, behavioral theory, competencies theory, network theory of leadership, as well as several others. Transformational leadership has been called one of the most effective among the various theories of leadership (Judge & Bono, 2000).
Transformational leaders are able to encourage their teams to reach their full potential by setting challenging expectations, which in turn leads the team to achieve higher performances (Bass, 1999). The concept of transformational leadership was first presented by Burns, who contrasted the concept of transformational leadership with a model of transactional leadership (Judge & Bono, 2000).
The definition of transformational leadership describes a type of leader who could relate to and appeal to the moral values of their followers. It is likely that emotional intelligence plays a central role in this relationship and can allow a leader to inspire an employee to transform their personal goals into organizational goals. If an employee accepts the vision set out by the leader, then it is more likely that they will work towards organizational goals. However, this is highly dependent upon effective communication, and emotional intelligence most likely serves as a moderator in this relationship.
Because of the popularity of the model, some research has focused on trying to determine if there is a dispositional basis of transformational leadership. Researchers have suggested that there are some personality traits that are helpful in predicting the capacity for transformational leadership in an individual (Ross & Offerman, 1997). Understanding such personality traits could serve as a vital organizational tool because transformational leadership has been shown to predict individual and organizational outcomes like leader effectiveness, team performance, subordinate's individual performance, job satisfaction of the subordinates, and organizational commitment (Lim & Ployhart, 2004).
By contrast, transactional leadership is focused on monitoring, controlling, and motivating employees through financial incentives and other types of exchange incentives (Bass, 1985). There are different models that are included in transactional leadership that include offering contingent rewards for performance, managing by exception, laissez-faire leadership, and avoidance of leadership responsibilities altogether. Although the transactional model also values communication, it does not make provisions for a leader inspiring the moral perspectives of employees and gaining their best performances. Instead, it focuses on the exchange relationships and how these relationships are structured and managed.
Studying leadership is a complex endeavor, and leadership practices can be looked at from a range of different perspectives. Transformational leaders are able to encourage their teams to reach their full potential by setting challenging expectations, which in turn leads the team to achieve higher performances. It is likely that transformational leaders have strong emotional intelligence skills that allow them to pick up on cues from the employees and address their individual concerns. Transactional leadership, by contrast, does not include the moral appeal that is found in transformational leadership. Instead, it is focused more on self-interest and the gains that can be made through exchange relationships.
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Kilburg, R. R., & Donohue, M. D. (2011). Toward a "Grand Unifying Theory" of Leadership. Consulting Psychology Journal: Practice and Research, 63, 6–25.
"Exchange-based motivation and control mechanisms"
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