The primary purpose of this nonexperimental, correlational, and descriptive quantitative study research was to gain an empirical understanding of the effects of transformational leadership and contingent reward as extrinsic motivation on employee satisfaction with leadership and leadership effectiveness in virtual team workplace environments. Using the Multifactor Leadership Questionnaire (5X Short) as the primary research instrument, a total of 122 randomly selected research participants with virtual team experience participated in the study. For data analysis, Pearson product-moment correlation was used to measure the relationships between the predictor constructs contingent rewards, transformational leadership styles, and the criterion variables (employ satisfaction, leadership effectiveness, and extra effort). Multiple regression analysis was used to measure the significance of the hypotheses comparing the relationships between the leadership factors and the measured outcomes of employee satisfaction with leadership, employee extra effort, and leadership effectiveness in virtual teams. Factor analysis was used for analyzing additional relationships between the model factors. Research results indicated statistically significant positive correlations between contingent rewards, transformational leadership attributes (idealized influence-attributed, idealized influence-behaviors, intellectual stimulation, individual consideration, and inspirational motivation), and outcome variables (employ satisfaction, leadership effectiveness, and extra effort). Based on the findings, the study concluded by identifying transformational leadership behaviors conducive for fostering employee satisfaction and leader effectiveness in virtual team environments. Secondly, the study concluded that contingent rewards as a form of extrinsic motivation positively impacted employee satisfaction with leadership and leadership effectiveness in virtual teams. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]