When Extrinsic Motivation Fails Implementing Transformational Leadership Style Essay

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Transformational Leadership in the Financial Services IndustryAbstractThe problem of motivation among workers in the banking industry is one that has been exacerbated by recent pullbacks in extrinsic motivational factors, such as bonuses. Managers need a new method or leadership style that will allow them to motivate intrinsically their workers. This proposal assesses the role that transformational leadership could play in solving that problem. It hypothesizes that bank managers may profitably implement transformational leadership in order to motivate their workers and help them to reach their full potential.IntroductionTo understand the role of leadership in the financial services industry, it is important to discuss the history and background of leadership and how leadership has manifested in banking. This section provides a brief explanation of this history. It defines leadership and discusses both transactional and transformational leadership. Finally, it describes the topic of this proposal, which is transformational leadership in banking.History/BackgroundThe history of leadership is one in which many theories have developed over time, from Great Man Theory to Trait Theory to Transactional and Transformational Theories. The continuous evolution of leadership theory occurs because leadership is such a unique phenomenon that it has prompted researchers to reassess previously held assumptions based on new evidence uncovered by new studies year after year. Great Man Theory, which posited that great leaders are born, gave way to Trait Theory, which posited that great leaders share common traits and characteristics. Gradually, this theory gave way to more precise dissection of how leaders interact with followers in different environments, what challenges they face, and how they overcome them. The scholars of leadership research have thus endeavored to explain leadership in more fundamental terms.Leadership. De Vries (2010) has noted that there is a strong relation between communication styles and leadership styles. The six main communication styles that are found in a work environment are verbal aggressiveness, precision of speech, expressiveness of voice, assuredness of manner, supportiveness in feeling, and persuasive argumentativeness (DeVries, 2010). Each of these styles can contribute to the success of a leader in managing, supporting, motivating, and building relationships with followers. The more precise a leader is with words, the more definite the understanding of followers tends to be. The more supportive the leader shows himself to be, the more positive the feelings of followers are. The more persuasive the leader is, the more likely followers are to accept the vision he presents to them. Whether one is a transactional or a transformational leader, communication is linked to these styles (Sethuraman & Suresh, 2014).Transactional leadership. Transactional leadership is one of the more common approaches in the business world today. It is based on a system of rewards and punishments. In a work environment context a transactional leader is defined as one who adopts a goal-oriented attitude to motivate workers, doling out rewards or punishments based on workers’ performance (Belias & Koustelios, 2014). The theory of transactional leadership is based on the idea that followers follow because they are incentivized to do so by the leader.

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However, one of the main problems with this theory is that it does not emphasize relationship building between the leader and the follower. The worker’s incentive to follow is based on extrinsic rather than the more powerful intrinsic motivational factors.Pseudo-transformational leadership. There are many examples of famous leaders in history who can be labeled as transformational leaders, but one must be careful to recognize what is known as the pseudo-transformational leader. Pseudo-transformational leaders have an ill-spirited agenda. Many leaders with charismatic personalities tend to be thought of when discussing transformational leaders, because one imagines transformational leaders to be charismatic, energetic, spirited…

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…supports the relationship between transformational leadership and positive work-related outcomes in areas like performance and job satisfaction (Lowe et al, 1996). Thus, the proposed solution to the problem described above is to implement transformational leadership.The turnaround should begin with a new protocol for leader/subordinate relationships. On specific solution is to promote educational courses on leadership with a focus on helping managers to identify with the struggles and needs of subordinates so as to make them feel more comfortable and important in the workplace. One effective way to implement a Transformational Leadership style is to support the staff’s career development (Bass, 1999). Treating staff as equals rather than as menial workers can improve their motivation tremendously. Promoting and hiring a diverse management team can also help secure a Transformational Leadership environment. For instance, research shows that women are in fact more transformational than men (Bass, 1999). In the banking sector of Pakistan, findings state that as in other parts of the world, female subordinates’ welcome leadership more than males and female leaders rate higher in charismatic leadership then males (Bodla & Hussain, 2009).HypothesisIt is predicted that the evidence will support transformational leadership as an effective means of motivating workers in the banking sector, improving morale, and increasing performance.LimitationsAlthough transformational leadership is generally effective, it is not always perceived that way. Male subordinates’ devaluation of female transformational leaders can be a cause of resistance (Ayman, Korabik & Morris, 2009). It is also a style that is difficult to quantify; thus, determining the level of transformational leadership style as it is occurring can be a limitation. There is also an undeniable gap in gender diversity when it comes to executive positions held in the banking industry. These positions are predominantly held by males. To effectively allow transformational leadership to take place within the Banking….....

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