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On the other hand transactional leadership is complementary to the other two types of leadership and is based on an exchange process in which the leader provides rewards in return for the follower’s effort and performance.
There are two ways for an employee to determine if he/she has been treated fairly in his/her job; distributive justice which is related to the fairness of the outcome an employee receives and procedural justice which is related to the fairness of the procedures used to determine those outcomes.
Transactional leaders are more likely to motivate and persuade the employees who are concerned about the fairness of the outcome because their relationship with their leaders is based on the rewards they receive in exchange for their efforts.
In that case interpersonally fair treatment is very crucial.
However, as we mentioned earlier transactional leaders are based on the exchange procedures to motivate their employees and less on interpersonal relationships.
Since one of the main attributes of the transactional leader is to make rewards contingent on performance and specify the outcomes that the individual can expect in exchange for good performance, job satisfaction will be increased when these conditions will be satisfied.
On the other hand in environments where procedural justice is the main way to determine the fairness of treatment to subordinates, the leader-employee relationship is outside the economic contract.
Additionally, transactional leaders expect their followers to have attributes such as commitment to goals, expectancy of goal attainment, expectancy of rewards and need for role clarity.
In order to achieve the highest subordinate performance, these leaders use rewards and punishments as tools.
Three major types of organizational leaderships have been presented throughout the years; transactional leadership, transformational leadership, and charismatic leadership.
Each type of leadership contains a certain number of attributes which distinguishes it from the others, however many theories converge into the position that each type can be used separately or in conjunction with the others.