Which term best describes a leadership style based on exchanges where rewards are given for work performed?

• A. Transformational leadership
• B. Transactional leadership
• C. Servant leadership
• D. Autocratic leadership

Answer: (B)

This item tests understanding of leadership styles that rely on reward-based exchanges. In transactional leadership, the leader sets clear tasks and expectations and uses contingent rewards to motivate performance—when the work is done as agreed, rewards are given; if not, consequences or corrective actions may follow. This creates a straightforward exchange: effort for rewards, with a focus on supervision and short-term goals. Transformational leadership, by contrast, aims to inspire and develop followers rather than rely on rewards for specific tasks. Servant leadership centers on serving and empowering followers, prioritizing their well-being, not a rewards system. Autocratic leadership concentrates power in the leader and enforces compliance, rather than motivating through rewards. Because the scenario describes a system of rewards for work performed, the term that fits best is transactional leadership.