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Transactional Leadership to People Success

By: | December 22, 2022 17 min read

When it comes to leadership or management methods there are many that leaders and managers can choose from, one of the widely popular and very common leadership method that is practiced all across the world is transactional leadership. 

Transactional leadership primarily focuses on the basic management process of controlling, organizing, and short-term planning. The power of transactional leaders comes from their formal responsibility and authority that they have in the organization. 

The main goal of the followers here is to obey the instructions of the leader, this style of leadership is also known as a telling style. This leadership style believes in motivating the followers via a system of rewards and punishments. 

If the follower gets the work done in time a respective reward follows it and if they fail a respective punishment is followed. The exchange between the leader and the follower here takes place to achieve routine performance goals. 

This may sound nice and fair to the employees as the rewards and punishments are instant. (Considering how much we humans are pleased by instant gratification it should be no surprise that this leadership style is popular) 

The thing about instant gratification is that it is addictive, even if we fail, we keep trying just to get that one big win that makes us feel euphoric.  

But how long will this method last?  

The ones that perform the best keep at it and keep enjoying the rewards and the ones that don’t perform eventually give up and look for opportunities elsewhere to evade the punishments. 

As much as this style of leadership works, it comes with its own drawbacks, one of them being that it is the worst enemy of employee retention. 

What can we do to fix that? 

Perhaps a different approach in management and a change in the leadership style would help. One leadership style that is very contrasting from the transactional style of leadership is People Success. 

People Success as a concept has gained a lot of popularity in the recent years. But what is it? Is it a feeling? A journey? Or a destination? Well, people success is a concept that in context, helps people achieving their best selves. 

Companies that nurture a culture where employees can maximize their potential, feel motivated and fulfilled will soon understand that success of the people is the most solid foundation for the success of the business. 

People Success is all about creating an employee centered strategy that allows the employees to be their best selves when they show up to work each day. A strategy like this helps organizations create a highly engaged and motivated workforce that puts people at the center of everything they do. 

Having the people in the center and giving them the encouragement to take ownership of their own happiness and career development, you help them develop traits like innovation, productivity, performance, and engagement, which benefits both, the company and the employees. 

People growth and culture as the primary aspects 

It is no news that times have changed, and in this new era of offices filled up with a majority of the workforce being Millennials and Gen Z the priorities and the values of an organization and its culture have changed. 

The times when the people would perceive a company as a good place to work just because it pays well are gone. In today’s world the primary aspects of a company that a potential candidate would look for are the company’s work culture and the growth of the people who work there. 

A company that treats its employees as potential leaders and grooms them in their work, helps them develop and enhance their skills, while letting them have fun in their job has a very different impact than the one that treats its employees as just a workforce. 

Companies need to adopt a culture and HR should strategize a business development plan that is more people centric in order to attract new talent, retain the existing employees and engage the workforce. 

Cop to Coach Approach  

Transactional leadership relies on policing and following up with the employees on every step of their work, this way the managers are kept updated on the progress of the work and they can track if things are running according to the timelines. 

There is no doubt in it that the transactional leadership style works. It does give a business the desired outputs that is needed for the business growth and the success of the organization. 

However, the impact it has on the employees is quite the opposite. In such an environment, the employees (regardless of how well they understand the company objectives and their role in reaching the objectives) can’t help but feel the pressure, and often times, they break and want to leave the company to look for other opportunities. 

It becomes an organization’s and the HR’s responsibility to enable their employees to see a scope of their career and personal growth as they keep at achieving their goals. The employees not only need to understand how their roles and goals are aligned with company objectives but also how their goals aligned with their growth. 

In order to obtain the desired results while keeping your employees engaged with work and avoiding burn outs, the managers need to become coaches who guide the employees towards their goals while helping them realize their full potential and understand their path for personal and professional growth. 

HR and managers also need understand that the success of their employees also indicates to their own success in their profession. 

COP vs Coach Infographic

Linking OKR with Skill Matrix 

Every employee in an organization has their goals and objectives whether they are monthly, quarterly or yearly. Some employees may have some goals and some may have different goals. 

Splitting their ultimate goals into smaller sub goals is called Objective Key Result (OKR) 

Similarly, every employee in the organization has a specific set of skills that they require for the job. Some employees have the same set of skills and some have different sets of skills. 

Mapping these employees with skills and their levels using a grid is called a skill matrix. 

If a manager is only focused on the employees’ OKR and not their skill matrix, the employees will never be able to grow in their job. 

For the employee to be able to grow in their job and achieve their goals, the managers need to link the two together, so that the employee is encouraged to learn more skills that can be useful for them in doing their job and achieving their goals faster. 

When the employees see the potential for growth, they feel motivated to learn and upskill themselves. 

This also helps in attaining a more engaged workforce that helps in improving the overall company culture. 

New mindset is of growth 

We as people and as a society, have always thought about “what do I get in return” whenever we are asked to do something. We only agree to do something when we know and agree with what we get in return. 

A job is no different, everybody has their own reason as to why they are in the profession that they chose. However, when a person is working for a company, they definitely have a motive behind it. 

I remember having a conversation with my dad and my grandpa right after the time of my graduation, in that conversation I could clearly see the difference in thought and mindset that each generation has. 

My grandfather was telling us that back in his day after he was done with college the ultimate goal was to get a job, any job, since they did not have anything such a campus recruitment back in the 50s, so naturally landing a job was a big deal for them at the time. He continued to tell me the whole story of how he landed his first job 

I immediately looked at my dad and asked him about his first job, He said his priority was not just to land a job but a job that pays well and has to offer some perks. This was back in the late 80s when India started to have a lot more western influence in our lifestyles. 

After hearing both their stories I couldn’t help but compare their situations with mine and notice how the change in time also brings about a change in the mindset. Because when I was looking for my first job, along with looking at the pay and perks I also wanted a job that provided me with opportunities for growth. 

A job where I could expand my skill set and become better than what I was. It was not just a thought of mine alone, everyone who graduated with me had pretty much the same idea and mindset. 

HRs need to keep a keen eye on shifts and changes in such mentalities so that they can help the company adapt to the coming changes. 

HR needs to talk about growth 

The HR is the link between everyone and everything in the organization. They act as a strategic function that supports all aspects of the business; growth is one of those aspects. 

The recruitment, training, engagement, and the retention of the employees is very essential for an organization if their aim is to grow their business. All the functions that become essential fall in the hands of the HR. 

But the HR needs to talk about more than just the company’s growth and the essentials for it. 

Another essential function for a company’s growth that is often not taken into consideration is the growth and success of its employees. 

They need to talk about the growth of the people not just with the potential candidates and the employees but also with the management. 

The growth of a person does not start until they get all the support that they require, as human relationships are the most important aspect for business growth. 

Talking only in a transactional way can hamper the culture of the company  

One might think that the transactional style of leadership is all bad, which is not the case, we can clearly see that transactional method of leadership works when it comes to getting the job done. However, having only transactional style of leadership is when we can start to see a problem. 

If you have to follow the transactional style of leadership, you would have to balance it out with looking out for your people’s success as well. 

When you talk only in a transactional way, it eventually hampers your company culture. This however, happens over time, as transactional way of talking seems very superficial and emotionless. 

It’s a slow poison that creates wedge between the people in the organization making it harder and harder to communicate and coordinate over work. 

AI and machine learning driven world  

In the post pandemic world our daily operations cannot run without AI or machine learning driven systems. Maybe that is why have been relying on the machines a little too much. 

As convenient as using AI systems can be, we shouldn’t forget that the human touch is very important to make a significant impact. 

We rely on the machines so much that they have even taken over our communication spaces as well. Even for something as basic as an appreciation is being done over email instead of in person. 

People often forget that appreciations that the employees get over email do not give the same joyful feeling that the appreciations in person give. 

As mentioned before, human relations are a very essential aspect of an organization in order for the business to grow. 

If you’re looking for future leaders, people success should be your top priority 

When an organization starts to look towards the growth of its business, the first thing they need to focus on is their leadership team. These leaders are the one that will be the major contributors towards the growth of the business. 

To build a strong leadership team, the most effective way is to look inwards and identifying the employees who show strong leadership qualities and grooming them to become a competent leader. 

By up-skilling and developing your existing employees, you create a channel of opportunities for all your employees which leads to a more engaged and motivated workforce. 

Leaders, however, are not made just by refining an employee’s skills, it is equally important to ensure that the employees personal wellbeing is also met alongside their professional wellbeing. 

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    Meet the author

    Keka Editorial Team

    A bunch of inspired, creative and ambitious youngsters- that’s Keka’s editorial team for you. We have a thirst to learn new subjects and curate diverse pieces for our readers. Our deep understanding and knowledge of Human Resources has enabled us to answer almost every question pertaining to this department. If not seen finding ways to simplify the HR world, they can be found striking conversations with anyone and everyone , petting dogs, obsessing over gadgets, or baking cakes.


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