Which type of leadership is characterized by rewarding or punishing based on performance?

Transactional leadership is characterized by a clear structure where leaders provide rewards or consequences based on the performance of their team members. This approach focuses on the exchanges that occur between the leader and the followers; if a follower meets or exceeds expectations, they are rewarded, and if they fail to meet them, they may face consequences. This type of leadership is effective in organizations where specific performance metrics are established and where compliance and task completion are crucial for success.

Other leadership styles, such as transformational leadership, emphasize inspiring and motivating team members to exceed their own self-interests for the benefit of the organization, often leading to innovation and change. Charismatic leadership relies on the leader's personal charm and ability to inspire, while servant leadership focuses on serving others and prioritizing the growth and well-being of team members. None of these styles inherently incorporate the structured reward and punishment system that defines transactional leadership.