Human Assets

 

Research has consistently demonstrated that Transformational Leadership is significantly linked with leader effectiveness. However, studies tend to be based on qualitative and subjective measures which lack proof. In a recent German study, Geyer and Steyrer looked at objective performance indicators for the staff of a bank, obtained independently from raters. These ratings took account customer features and local market conditions and show whether reasonable targets are over- or under-performed. 

 

The researchers measured leadership behaviour with an adaptation of the Multifactor Leadership Questionnaire (MLQ). The modified MLQ has scales to measure both Core Transformational Leadership (Charisma, Inspirational Motivation, Intellectual Stimulation) and Individualised Consideration. It also measures Transactional Leadership (Contingent Reward and Management by Exception). 

 

Transformational leadership had an effect on performance over and above the effect of transactional leadership. Unlike previous studies, this distinguishes between long-term and short-term performance. Core Transformational Leadership is found to be more strongly related to long-term than to short-term performance. As this factor is mainly concerned with influencing corporate culture, and strategies for attaining organisational objectives, it is not surprising that it has more impact on long-term than on short-term performance. Individualised Consideration is positively related to short-term performance but negatively related to long-term performance. This refers to situations where leaders can have an immediate impact on what is done and how it is done.  

 

 

Geyer, A. and Steyrer, J. (1998). Transformational Leadership and Objective Performance in Banks. Applied Psychology: An International Review, pp. 397-420.

 

Newsletter: 2003