The utility of transactional and transformational leadership for predicting performance and satisfaction within a path‐goal theory framework

In a test of hypotheses derived from the integration of principles of path‐goal theory ( House, 1996 ) and transformational leadership theory ( Bass, 1985 ), data collected from 179 high school teachers and their principals were examined with hierarchical regression analysis. Augmentation analysis indicated that transactional leadership had a stronger role in explaining unique criterion variance beyond the contribution of transformational leadership, than did transformational leadership relative to transactional leadership. In addition, both the transactional and transformational leadership had a negative interactive relationship for predicting the outcome of performance, such that leader vision and leader intellectual stimulation were more positively correlated with employee performance when leader use of contingent reward was low. These augmentation effects, in conjunction with the findings of negative moderation, suggest that transactional leadership may have greater potential predictive value than previously assumed.