Influence of Transactional Leadership on Employee Job Satisfaction: Case Study of Firms Listed on the Nairobi Securities Exchange

Abstract

This study examined the influence of transactional leadership on employee job satisfaction. Transactional leadership style entails an exchange process between the leader and the followers thus the transaction or an activity. This implies that the leader through the exchange of relationships, provides followers with a chance to satisfy their lower order material needs; for example, pay increases and emotional needs such as trust. Transactional leadership variables included contingent reward, active management by exception and passive management by exception. The paper provides a conceptual discussion of transactional leadership in management and business practices. Descriptive survey design was adopted. The study sample comprised of 400 employees working in all levels in various companies listed at the Nairobi Securities Exchange (NSE). Stratified sampling technique was used to select the study respondents, both descriptive and inferential statistics were utilized while factor analysis was used through principal component analysis and varimax rotation method to generate factor scores for each construct. Multiple linear regression was used to test the study hypothesis 

Transactional leadership was found to play an important role in influencing employee job satisfaction therefore firms should aim at achieving the highest levels of leaders with leadership skills in order for them to positively influence job satisfaction among the employees. Employees in the study confirmed that their managers were passionate about what needs to be accomplished and focuses attention on irregularities and mistakes; a component of management by exception passive. The study established that transactional leadership positively influences employee job satisfaction thus companies should train and retrain their managers on how to be transactional leaders in order to increase employees' job satisfaction.