Dispelling misconceptions and providing guidelines for leader reward and punishment behavior

One unfortunate consequence of the focus on “charismatic,” “transformational,” and “visionary” leader behaviors during the past few decades has been the tendency to diminish the importance that transactional leadership behaviors have on leadership effectiveness. We say that this is unfortunate because recent research has shown that transactional leadership, in the form of contingent reward and punishment behaviors, can have substantial effects on a variety of important employee attitudes, perceptions, and measures of job performance. Therefore, in this article we discuss some possible reasons why transactional leadership has been relegated to a lesser role than transformational leadership, summarize the research that indicates the importance of leader contingent reward and punishment behavior to leadership effectiveness, and identify some of the mechanisms that these forms of leadership behavior work through to influence employee attitudes and behaviors. Following this, we address ten misconceptions managers often have regarding the administration of rewards and punishments, and provide some recommendations about how leaders can improve their effectiveness in administering recognition and discipline in organizational settings.