The Effect of the Carrot and Stick Transactional Leadership style in Motivating Employees in SMEs

Nowadays, where everything in the business world looks like collapsing, leaders stand out by efficiently exploiting resources, especially human capital. They acknowledge the vital role employees play in realizing objectives. They are also aware that, in order to get the best employee performance, they should identify the needs that motivate each one. Therefore, the purpose of the paper is to highlight the effects of the carrot and stick transactional leadership style on employee motivation. The quantitative approach was adopted. Primary and secondary data were used. Primary data was collected via a small survey conducted at three dairy manufacturing Lebanese SMEs, and was analyzed using SPSS. The reason behind selecting this sector was that its operating activities had not ceased during the financial crisis and the covid-19 lockdown. The survey depended on a small, structured, six-sections questionnaire sent to employees occupying managerial positions. In total, 15 questionnaires were sent. Only 12 were returned and analyzed. This article’s results claps hands to the theories in literature that indicate the existence of a positive relationship between the carrot and stick approach and motivation.