Transformational and Transactional Leadership: A Meta-Analysis

Women Pointing

What are the critical behaviors associated with effective leadership in today’s work environment? That’s the question we explored in a recent meta-analysis. Using data collected between 2015 and 2016 from over 600,000 employees working in 43 organizations, we examined the relationship between transformational leadership behaviors (idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration), positive transactional leadership behaviors (contingent rewards and active management by exception), and five critical employee attitudes: extra-role behavior, organizational commitment, organizational confidence, career confidence, and work-life balance satisfaction.

We found that both transformational leadership and transactional leadership behaviors were positively related with all five employee attitudes. Of these, the strongest relationships were found between:

  • Transformational behaviors and career confidence (β = .355);
  • Transformational behaviors and satisfaction with work-life balance (β = .369);
  • Transactional behaviors and organizational commitment (β = .256).

We also explored the relationship between leadership behaviors and employee attitudes across three populations: employee generation, gender, and regional location. We found a similar pattern of effect sizes across populations, with a few notable exceptions. For example, transformational leadership behaviors had a particularly strong influence on Baby Boomers. Millennials were more motivated and committed when their leaders exhibit transactional leadership behaviors. And female employees also appeared to be particularly motivated by transactional leadership behaviors.

For organizations seeking to create an engaging work environment, this study highlights the positive impact that both transformational and transactional leadership behaviors can have on the workforce. Regardless of employee generation, gender, or regional location, results suggest that both sets of behaviors are effective.

“Most people think that transformational leadership is more effective than transactional leadership,” said study co-author David Reeves. “Our study—like others—shows that when leaders and managers focus on the positive aspects of transactional leadership—providing contingent rewards and corrective feedback—their employees feel motivated and committed. That said, our results show that the best leaders and managers utilize the full range of transformational and transactional behaviors.”
Patrick Hyland, PhD
by Patrick Hyland, PhD

Research and Development, Mercer Employee Research

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