The aim of this study is to compare the transactional and transformational leadership styles before and after the banks’ privatization in terms of employees’ perception. The three subdimensions were used to measure the transactional leadership namely contingent reward, management by exception-active and management by exception-passive whereas idealized influence, inspirational motivation, intellectual stimulation and individualized consideration were used to assess the transformational leadership style. Data was collected through the questionnaires from OG-I, II, III and executive level employees of ABL and UBL Khyber Pakhtunkhwa Province. Paired t-test, descriptive statistics, skewness and kurtosis was used to analyze data. The significant difference was noted in both the leadership styles, favorable for transactional and overall unfavorable for transformational leadership. Only intellectual stimulation showed no change for both the banks. To positively affect the perception regarding transformational leadership style, the banks’ leadership should impart values conducive to banks’ mission and vision, motivating and properly guiding employees, encouraging innovation and creativity culture and having due regard for employees’ needs and concerns.
Keywords: Transactional leadership style, transformational leadership style and privatization.