Human Resources



Can you pay your employees to be creative?

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Different leadership styles can bring out different levels of creativity in employees – so if you’re someone who is rational and clear in your communication, you’re on the right path.

That was the key conclusion of recent research conducted by Rotterdam School of Management.

Analysis into the working habits of nearly 150 employees and managers in Germany revealed that different leadership styles have different effects on their levels of creativity.

Two different types of leadership were observed: transactional and transformational.

Employees who work for transactional leaders are 14% more creative than employees who work with a transformational leader.

Transactional leaders were defined as bosses who are rational, communicate clearly, set clear goals and are fair in rewarding success.

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On the other hand, transformational leaders were role models, who are inspirational and motivate intrinsically.

Interestingly, employees with a very transactional leader also generated, on average, 62% more ideas than those working for a leader who was not so transactional.

“Intrinsic motivation is often linked to creativity so you would expect that the transformational leader, the one who motivates employees’ intrinsically, would be more successful in stimulating employees to come up with new ideas. But the opposite is true,” said Dirk Deichmann, assistant professor at Rotterdam School of Management, Erasmus University.

Deichmann advised businesses to focus on developing transactional leaders.

“However, if businesses struggle to find transactional leaders, they can encourage their transformational leaders to set more goals and reward employees for accomplishing these goals,” the report stated.

Image: Shutterstock

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