HAMIDREZA MAHBOOBINEJAD - University of Wollongong, Faculty of Engineering & Information Sciences, New South Wales, Australia, hrm216@uowmail.edu.au

This paper intends to discuss the strategic policy options available to managers in terms of structure, motivation, leadership and the culture of the organization which would end up in boosting of performance and productivity. In this respect, this paper will argue that effective leadership is based on a transactional relationship in which leaders provide followers with tangible returns and incentives in return for compliance and productivity. The main purpose of this paper is to demonstrate the links between productivity, transactional relationship and effective leadership. In this way, this paper endeavors to give a better definition of the effective leadership. This paper also explains how external factors and business criteria influence strategic decisions relating to how organizations manage their people. To this end, both primary and secondary data were gathered from scholarly articles and relevant text books. The results indicate that there is a mutual relation between job satisfaction and productivity of the origination. Further, the results clearly demonstrate the significance of transactional relationship in order to have a profitable organization.

TRANSACTIONAL RELATIONSHIP, EFFECTIVE LEADERSHIP, PRODUCTIVITY, JOB SATISFACTION