A Meta-Analysis of Transactional Leadership and Follower Performance: Double-Edged Effects of LMX and Empowerment

Abstract

Although transactional leadership is known to be the most common style of leadership in organizations, meta-analytic work has yet to fully uncover the relationship between transactional leadership and one of the most focal leadership outcomes: follower performance. Moreover, little is known about the mechanisms that explain why transactional leadership predicts follower performance. To address these gaps, the current article meta-analytically tests a model based on social exchange theory and self-determination theory in which transactional leadership is theorized to affect follower performance sequentially through leader–member exchange (LMX) and psychological empowerment. Specifically, we argue that although some leadership behaviors (e.g., contingent reward) may benefit performance via positive contributions to the leader–follower social exchange, some leadership behaviors (e.g., contingent reward) may simultaneously exhibit negative effects on performance via reduced empowerment. Our results demonstrate that transactional leadership displays both positive and negative indirect effects on follower performance. Furthermore, the pattern of these effects generalizes to two types of performance: task performance and contextual performance. These findings suggest that transactional leadership is a “double-edged sword” when predicting follower performance (e.g., contingent reward fosters LMX but hinders empowerment, whereas management by exception fosters empowerment but hinders LMX). We discuss how leaders can benefit from these findings, including modifying one’s delivery of transactional leadership approaches.

Interactive Effects of Transactional Leadership and Work Meaningfulness on Job Performance

“…Thus, current research is to explore the role of transactional leadership on job performance of the faculty members. Further, it has a support of social exchange theory (SET) as it cares our argument R M B R that under transactional leadership, follower will perform better because of their mutual exchange of benefits (Young et al, 2021).…”

“…Therefore, firms in all the times have a need to understand and encourage such leaders or leadership styles to achieve desired job/organizational related outcomes. According to a recent meta-analytic study, TL has largely been applied in organizations but still needed to study (Young et al, 2021). Transactional leadership is defined as -Managing transactions between the organisations and its members through contingent rewards."…”

“…Thus, organizations need to understand and develop such leadership styles or behaviors to achieve desired job/organizational related outcomes. Transactional leadership is a common leadership style that has been applied in organizations (Young et al, 2021). It is defined as -Transactional leadership means managing transactions between the organisations and its members through contingent rewards."…”

“…Transactional leaders believe on provision of benefits and rewards as a result of successful completion of tasks and objectives (Bass & Avolio, 1990). However, researchers argue that still there is need to study the role of transactional leader on followers' performance (Young et al, 2021). This linkage is important to study as followers' performance is key to the organizational success (Longe, 2014).…”

Case Studies on the Downside of Transactional and Authoratitative Organizational Leadership Styles During Crisis Management

“…However, managers who embrace transactional leadership style often avoid taking risks and focus on regular administrative processes if they do not encounter an extraordinary situation (Bono & Judge, 2004). Young et al (2020) argue that transactional leadership loses its validity and ground, as recent generations such as Generation Y and Generation Z are having different work motivations based on social satisfaction. Especially Generation Z is mainly motivated when what they do for work creates a social value (Kirchmayer & Fratricova, 2020).…”