February 27th 2020
By: Jean-François Labre

Leadership: the Impact of Employee Attraction

Leadership is the starting point for increasing employee engagement. However, while everyone is familiar with the concept, few can easily distinguish the different types of leadership. The literature on the subject distinguishes two styles: transactional and transformational. 

Transactional or transformational leadership 

Transactional leadership, as the name suggests, is based on the principle of transactions between an organization and its employees. In practical terms, if an employee meets or exceeds expectations, they will be rewarded and if they do not meet expectations, they will be penalized. The role of the transactional leader is then to organize work and manage performance by ensuring that objectives are met. In other words, it’s carrot and stick motivation. 

Conversely, transformational leadership is based on the influence of an individual and his or her ability to inspire followers to excel. A leader of this nature communicates an inspiring vision, regulates the climate of his team, and cares for their collaborators on an individual basis. 

Transformational leaders act as mentors, recognizing that each individual is unique, and supporting their employees in expanding their horizons. For example, they will guide them in developing new approaches to their problem, allowing them to gain more autonomy and grow in their careers. 

These leaders believe that a happy and fulfilled employee is productive, which is why they want to foster passion and give meaning to daily work. 

Leadership in practice 

In practice, leaders can use both approaches. However, the balance between the approaches will be balanced according to their personality, preferred style, motivation, focus, and environment. 

A nomenclature reflecting this weighting can be established by considering the roles and skills that leaders are expected to play and possess. These roles and competencies have been outlined by Robert E. Quinn (1988) who, in a two-axis model, claims that leaders must, one one hand, position themselves between a focus on the internal versus external environment of the organization and on the other hand, between flexibility versus control. 

As a result, leaders can be grouped into four broad roles by leadership type. Thus, the roles associated with the transactional style are those of evaluator, coordinator, director, and producer. In regard to the transformational style, the roles are those of facilitator, mentor, innovator, and broker. 

Is there a right and a wrong leadership style: the impact of the environment? 

The answer is: it depends. While the transactional style is of limited effectiveness, it may be appropriate in certain environments, such as when the maturity level of employees is low. By contrast, in an environment that requires innovation, skill renewal, and autonomous thinking, transformational leadership will enable organizations to obtain superior performance from their members and ultimately to distinguish themselves both in the eyes of their customers and of their competitors. 

Jean-François Labre
Jean-François Labre

M. Sc., CRHA, Consultant in Talent Management