The leadership style used by the management plays a pivotal and crucial role in the development of the organisation. I work in a bank, and I have noticed that the senior managers in my organisation use different leadership styles. For example, Mr. Philip Darwin is the endowment fund manager of the bank, and his style of leadership is what is known as transactional leadership. This leadership style believes that reward and punishment can be used to motivate people. Transactional leadership also assumes that when people agree on doing a given assignment or job, part of that agreement should be that they agree to give up all authority to the management or the leader. In this leadership style, the leader holds all the power and control over the subordinates. The employee's main goal is to obey the orders given to them by the management (Kurnik, 2010).
The idea behind this leadership style is that when a subordinate takes up an assignment he/she agrees to obey their manager fully. In transactional leadership style, the word 'transaction' refers to the money or any other awards that the organisation pays to its subordinates for their effort and compliance, therefore, making the relationship between the leader and the subordinates to be transactional. In this leadership style, the leader has the power to punish his or her subordinates if they perform below the predetermined standard (Kurnik, 2010).
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In transactional leadership, the subordinates clearly know what is required and expected from them. As I have stated earlier, the endowment fund manager Mr. Philip Darwin uses this leadership style. When he assigns work to his subordinates, it becomes the responsibility of the subordinate to ensure that the assigned job is completed within the given time. If the subordinate fails to complete the task on time, the endowment fund manager gives out a punishment. However, the endowment fund manager also rewards those subordinates that complete their tasks successfully and on schedule. Mr. Philip is known for praising subordinates and awarding them for exceeding expectations. In the case of a subordinate performing under the expectation, the endowment fund manager always gives out a punishment and some actions are taken to ensure the subordinate increases his/her performance.
Transactional leadership style comes out more of a 'telling style' and it is based on the fact that the punishment or rewarding of subordinates is dependent on the performance. Both contingent reward and management by exception are considered to be the essential components of transactional leadership. The management by exception component is used to ensure that the resource constraint should never result in the subordinate not been able to achieve the desired result. On the other hand, the component of contingent reward means that the leader is committed to the rewarding of the subordinate if he or she provides the required result (Kurnik, 2010).
The bank's manager is Mr. Richard Clarkson, and he uses a different leadership style compared to the endowment fund manager. His style of leadership is known as transformational leadership, he is known to be continually changing in order to stay flexible and adaptable. Normally, he is energetic, passionate and enthusiastic, and he is not only involved in the organisation, but he is also focused on helping every employee of the organisation succeed, as well. Transformational leadership is a style of leadership that assumes that people will follow the person who is capable of inspiring them and also motivating them. This leadership style exhibits ability to uplift the energy and passion of the employees. I have had a terrific experience with the bank manager who is a transformational leader.
Transformational leadership always begins with the growth of a vision which looks into the future of the organisation. This vision is developed by the bank manager, a senior team member or through a series of discussions. As a leader, Mr. Clarkson takes the opportunity to convince and sell the vision to others. He is flexible and adaptable, and he is known to create trust and personal integrity among the bank's employees. The bank manager is also to implement new ideas for the bank. In transformational leadership, the leader knows the route which will be used to move the organization forward and simply wants the other employees to follow it. The route forward that is presented by the leader may not be in detail, but it has a vision that is clear and a direction to follow. This leadership style also accepts the fact that the organization will be faced with failures ahead (McCrimmon, 2008).
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Mr. Clarkson makes efforts to inspire the organisation employees by constantly enthusing and also listening to them. Transformational leadership is known to influence the employees to follow the correct path and also encourages them to make a change in the environment that surrounds them. The bank manager believes that success can be attained through sustained commitment thus he is fully committed to serving the organisation and its employees.
The bank manager is known to challenge the status quo in the organization. He also encourages creativity among the bank employees. As a leader, he encourages the members of subordinate staff who are his followers to find new ways of doing things and also new opportunities of learning. His style of leadership involves offering encouragement and support to individual employees. In order to promote the development of supportive relationships in the organisation, the bank manager keeps the lines of communication in the organisation open. Hence, the bank employees feel free to share ideas and the leader is able to offer direct recognition of each employee's unique contributions (McCrimmon, 2008).
The bank manager has a clear vision which he articulates to the rest of the banks employees. He also possesses the ability to help the bank employees experience the same motivation and passion to attain these goals. He serves as a role model for the subordinates. This can be seen through the trust and respect that employees of the bank have for the bank manager and they try to emulate him and internalize his ideals.
The success of transactional leadership in the management of the organisation relies on the employees of the organisation valuing the rewards that have been put in place by the management. Mr. Philip Darwin who is the endowment fund manager at the bank ensures that he understands what motivates the bank employees, and he ensures that the reward systems are properly aligned. He has set up a reward system that is valued by the employees of the organization. This reward system has been established by the HR department and can be found in the policy of the organisation. When an employee accepts a work position with the bank, he, or she agrees to the reward system. With an excellent understanding of what inspires the bank employees, Mr. Philip has repeatedly been able to link the rewards that an employee mostly values with the successful completion of an assigned task. This has promoted a culture of performance-oriented work in the organization which involves the rewarding of the performers and the weeding out of the incompetent employees.
The endowment fund manager ensures that the employees of the bank fully understand the reward system and how they can be rewarded. This has led to the realization of the full effect of the reward system since the employees now realize their full benefit package. They are also able to realize how much their employer appreciates their efforts. By ensuring that the employees understand their full benefits package, the endowment fund manager has been able to unlock additional motivation from the bank's employees.
Mr. Philip, who is the endowment fund manager, has been successful in preventing situations whereby some employees perceive that they are treated unfairly. This is a result of ensuring that both the punishment and the reward systems are in place and are exercised consistently without bias. When perceptions of bias occurs among the employees, the value that they hold for the reward system can be detracted and as a result, the employees efforts and motivations could end up suffering. Mr. Philip also provides employees with constructive feedback throughout the work process. This has enabled the manager to control the quantity and quality of the employee's output. The manager is also able to shape the expectations of the employee in concern to whether they will receive rewards for their efforts.
The manager has been successful in harnessing the satisfactions and emotions of the moment by rewarding and recognizing employees in a timely manner. This has set the stage for future transactions between the manager and the bank employees. As a result, the manager has been able to build trust and establish a track record by providing earned recognition and rewards in a timely manner when the assigned tasks are completed.
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Mr. Richard Clarkson has been the bank manager for the last 15 years, but despite this, he continues to keep his mind and the organization as fresh thinking as a young entrepreneur from Silicon Valley. Mr. Clarkson holds regular brainstorming sessions in the organization. In some sessions, he orders everyone to remain standing for the entire session in order to keep them thinking fast on their feet. The leadership style of the top management is responsible for setting the tone of how effective the organisation is at continuous innovation and adaptation. Being a transformational leader, Mr. Clarkson has been able to reduce the perceptions of politics in the organisation by offering a mission, a vision and an operational plan of how to achieve the goals of the organisation. He has been able to reduce cases of employees been open to more than one interpretation and professional uncertainty. He has also been able to validate a feeling within the organization that it is possible to deal with challenges that face the organisation in a decent way that is based on fairness and justice (Gadot, 2006).
Mr. Clarkson is known to reinforce moral values. This has contributed positively to the feelings of justice and fairness among the employees. It has also helped reduce inferiority feelings that result from the lack of resources to political alternatives. The bank manager is known to be transparent in his decision making process, and this has contributed to reducing the perceptions of politics in the organization by strengthening the belief among employees the organization and the leader are trustworthy and fair. He also encourages employees to question their old way of doing things. He supports the employees in questioning their own beliefs, values and expectations and also those of the organisation and also its leader, which may be, inappropriate or outdated for current problems. By doing this, bank manager has been able to get employees to perform at maximum levels. By employing the transformational leadership style, the manager has been able to get the organisation's employees more involved at the workplace (Gadot, 2006).
The bank manager has been successful in realigning the employee's norms and values, promoting both Organisational and personal changes and has helped the bank's employees to exceed their initial performance expectations. By being able to provide intellectual stimulation to the employees, Mr. Clarkson has been able to encourage staff to think broadly and also to adopt a thinking process that is exploratory and generative. The manager has been able to stimulate the bank employees to think about old problems in new ways and has encouraged then to challenge their own beliefs, traditions and values. Since the manager shows confidence and high expectations in the capabilities of the employees, he has been able to develop the employee's commitment to long-term goals of the organisation. As a result, the employees have shifted their focus from the immediate and short term solutions and objectives to solutions and objectives that are long term and fundamental. The behaviors of the bank manager have been related to the employee's job performance, self reported effort and job satisfaction (McCrimmon, 2008).
By looking at the consistency of the leadership styles of the two managers in relation to expectation of the employees, we see that transactional leadership style shares an exchange relationship with the employees of the bank and punishments and rewards are the tools used to positively and negatively influence the employees. Based on contingent reward and punishment behavior, the bank leaders positively reward the employees with recognition or praise when they perform at or above the required expectation. They also use the negative reward approach in the form of coercion, correction, criticism or other forms of punishment when the employee's performance is said to be below the expected standard. The transformational style of leadership involves a visionary manager who has cohesive organisational norms and has established innovative thinking within the organisation. In relation to transactional leadership, some employees are of the opinion that their manager should also articulate a vision that is clear and provide a model for organisational success. Some employees are highly satisfied with whatever they have been able to achieve during the span of their career, for example, skill development, earning, advancement and achievement of professional goals. They also feel that their managers are satisfied with them, and this leads to a sense of emotional attachment to the organisation on is working for which ultimately leads to a sense of job success.
There is a significant relationship between transformational leadership and career satisfaction. The manager who has a clear vision and facilitates the acceptance of organisational goals has lead to employee satisfaction with different parameters linked with career. Another value of correlation between career satisfaction and job success reveals that when staff members possess a sense of emotional affection with the organisation, they work for it. This is in view of the achievements they have been able to acquire during a given course of time.
Transactional leadership in the bank is found positively and importantly to relate to job success as compared to the transformational style of leadership. Transactional leadership provides positive rewards to the employee if they meet the required goals and a negative reward if they fail to achieve the desired objectives. This is seen to build a strong relationship with the success of the job. When more rewards that are positive are given out on out performance, the employees are able to achieve a success that is concrete in terms of compensation, manager's satisfaction and career growth. When the, performance is low, the reverse is also true.
Due to the fact that the transactional leader is keen on emphasizing goals that are short term and detailed and also standard procedures and rules they fail to make an effort to enhance the employee's creativity and the generation of new ideas. As a result of this fact, this leadership style has worked well in situations whereby the problems of the organization are clearly defined and simple. This type of leader does not reward ideas that do not fit with the existing goals and plans. The transactional leader has been effective in guiding decisions that are efficient and are aimed at improving productivity and cutting costs. This type of leader tends to be action oriented and highly directive and their relationship with the employee is not based on emotional bonds and is transitory (Kurnik, 2010).
The employee's self esteem is reinforced by the transformational leader through the expression of confidence in the employees. The leader sets high expectations for the employees which induce greater commitment to the effort. By articulating a mission or a vision, the transformational leader increases the intrinsic value of the accomplishment of goals. The accomplishment of the goals becomes more consistent and meaningful with the self concepts of the employees (Keller, 1992). When transactional leadership is considered we see that employees can do little to improve their job satisfaction. Transactional relationship is importantly related to job success while job success and transformational leadership are related to career satisfaction. Transactional leaders are known to work within the organizational culture, and they ensure the enforcement of the behavioral norms and organizational rules. Transformational leaders, on the other hand, change the organizational culture and inspire the employees within the organization to continually develop and grow.
The Transformational leader constantly uses his passion and vision to energize the organisation's employees to stay focused and determined even during the most trying circumstances. He guides them into a future that is more promising. However, this leadership style also has its share of shortcomings. For instance, the constant passionate and energetic motivation of the transformational leader can prematurely drain employees if used improperly. Transactional leadership, on the other hand, can be quite effective in many situations, such as when the manager offers a bonus to the first salesperson who reaches a number of sales (Ray, 2010).
However, in the end, the leader and employees must continue to share a common understanding of the importance of the goals of the leader and expectations in order for this leadership style, to work. Transactional leadership is best used when responding to a crisis, everyone is required to work in concert and do the things necessary in order to mitigate the crisis. Transformational leadership, On the other hand, is known to yields superior long-term results in most situations. The key is to have a proper balance between the two styles of leadership. The ideal model would be to come up with a transformational leader that is able to be directive when the circumstances require. Research has shown that a transformational leader faces less resistance to the direction as the employees normally have had input into the majority of the decisions of work and understand the need for direction (Dollak, 2008).