One of the buzz words used to promote teaching managers charismatic behavior is transformational leadership. It is touted as the next generation improvement on the old standby, transactional leadership. Transactional leadership is based on providing extrinsic motivators. In other words transactional leaders provided more rewards for better performance. A contingent reward system apparently works up to a certain point and then no more. Perhaps the employees are satisfied with their current recompense, or find the rewards are not worth the effort. Most likely employees don’t want to consume their entire life with work.
Transformational leadership is a theory that replaces part of the contingent reward system by providing an intrinsic motivation. In other words it supposed to make follower’s increase their own expectations of themselves. Of course, employees still expect pay and expect pay increases with increased experience. Only an infinitesimal number of people work for the sheer pleasure of it. Still how exactly does one change people’s ideas of how much they are willing to give to their company? Transformational leadership theories provides a three-pronged approach.
The first and most important is providing employees with a sense of vision and mission for their job. Think back to when you were a child and were asked “What do you want to be when you grow up?” Only the would-be comics answered “cubicle worker.” Many of us replied with a “service” profession; doctor, teacher, policeman, etc. because their work seemed applicable to us in a way that actuary, accountant and environmental engineer did not. For most people it requires someone with gift of persuasion to convince employees they should redouble their effort because what they do actually matters, whether it is a service position or not. So charisma is one of the major components of transformational leadership.
The second is making the work itself more interesting and fulfilling. Part of this is empowerment, or allowing people make decisions and have more inputs into their work. However before employees have power to make decisions, they need know how to predict results and be responsible for the failure when they do not come out as predicted. Transformational leadership adds the idea of employees learn to think critically about their work. This also means they may question decisions that management makes or constantly suggest improvements to the chagrin of co-workers who are used to the way things are. Most important they need a boss that will allow them to push their limits, try new things and fail. Ouch!
The third component really depends on which theory of transformational leadership that you ascribe to. Bernard M. Bass found individualized consideration to be a key point of transformational leadership. The leader is to provide development plans for employees based on individual needs. Although he noted that focus on team or organizational goals increased the sense of mission, this had to be balanced by one on one coaching and mentoring. Inspiring speeches had to be moderated by individual attention. Boas Shamir, on the other hand, proposes greater emphasis on sense of belonging. Therefore the goal of leadership should be to provide social identification with the group so that employees will go the extra mile.
As well as disagreeing on the major components of transformational leadership, there other areas the transformational theorists need to clear up. The underlying processes required to provide employees with a sense of vision and mission, and ways to make work more interesting and fulfilling are not delineated, but tend to rely on anecdotal information. Research has been conducted on transformational leadership for over 30 years now. People may have a more favorable perception of charismatic leaders, but what exactly do they do to contribute to people’s performance?