6 Bases of Power – Transactional

The desire for an answer  is on everyone’s mind but seldom expressed early on. Every job applicant wants to know how much. Every employer wants to know how little.

The question? The applicant wants to know how much will I get paid? The employer wants to know how little can s/he pay and still get the position filled.

Transactional power is as old and as enduring as time itself. Social and commercial interaction with people has always revolved around give and take. We as owners, leaders, and/or managers have a supply of incentives to offer in exchange for time, talent, effort, and to a limited degree, enthusiasm.

It has been around so long because it works. I’ve taken jobs for the incentives like everyone else. Every business uses them of necessity. Only interns whose ultimate objective is a paying job will work for free in a commercial setting…and they won’t do it for long. The now famous “Show me the money!” underscores just how powerful this is.

It applies in non-profit settings, too. Volunteers may not work for money but they work for some currency. Effective leaders of non-profit organizations understand there must be a pay-off, the volunteer must receive something in return or they won’t volunteer for long. (There is much, much more I have to say about this since this was my field for many years. Stay tuned for future posts.)

There are limits, however. I can buy a person’s time, talent, and energy. It is much more difficult to buy a person’s heart. The endemic motivation to participate with your company and do so enthusiastically is far more subtle. There is a blend of personal values which must match and remain matched to the values of the company. Effective leaders know who works for them and what fuels the fire. Too many leaders are either clueless or they assume all employees are the same, a grave error.

What am I saying? That money is not the only incentive and most certainly not the only fuel for maintaining motivation. Notice I said “maintaining motivation.” Most people are motivated already, the question is what are they motivated toward?

Effective transactional leaders find out.

Finally, transactional power tends to be more individual than corporate. It tends to play best and reinforce individual participation and achievement, almost always because incentives are individual. Team building incentives can work if they are carefully designed to appeal to a small group. Make the incentive governable within a controlled group. Lowe’s Home Improvement Centers has taken away individual incentive and replaces it with their SSEI – Sales Service Employee Initiative. But the matrix for determining pay-outs is so complicated and the result too dependent upon performance for the entire store that most employees have given up because they cannot control the actions and performance of someone on the far side of the store. Many employees consider it to be a shell game. If the incentivized transaction is to work it must be:

Personal – connect with the individual in ways that mean something to that individual.

Manageable – simple enough that the individual can see where to grab hold of it and learn how to make it work.

Meaningful – match values and ideals within the employee.

How well do your incentives work? What have you tried that succeeded? What have you tried that failed?

Check out the video below.

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