More on Motivation – Theory X and Theory Y

This is from the “Accounting Makes Cents” podcast episode #35 released on Monday, 13 March 2023.

In this episode, we’re going to discuss another motivation theory, this time one that is created by Douglas Mcgregor. This theory is known as Theory X and Theory Y. The theory discusses contrasting management approaches towards affecting employees’ productivity and job satisfaction, and the reasons why management chooses one or the other when dealing with specific situations and environments.

Jump to show notes.

So as you may have gathered from the name of the theory, Theory X is different from Theory Y. You may remember some of the other motivation theories we’ve looked at in the past. In particular, one of the most popular motivation theories is Maslow’s Hierarchy of Needs, which talks about the needs of the employees being fulfilled like rungs on a ladder. The basic needs are fulfilled first, and as each needs are fulfilled, the employee strives to achieve the next need, until he/she gets to the top of the ladder, which is where self-actualisation sits.

Now with Douglas McGregor’s Theory X and Theory Y, he classifies that there are different types of employees and therefore, motivating these employees would also be different. Managers generally adopt either a Theory X management style or a Theory Y, depending on how they want to motivate their employees. Theory X exposes negative assumptions about the employees being motivated, and theory Y promotes positive assumptions. Let’s deal with this a little bit more.

Theory X

The negative assumptions on Theory X refers to employees only working for the sole reason of self-interest. There is no higher desire aside from doing the job and earning the money. With Theory X, management believes that employees avoid responsibilities as much as possible and possess little to no ambition. Whether this is the correct way to actually be thinking is another thing.

Under this style, management generally takes a hands-on supervised approach managing people and performance, and they also use reward and punishment as a means to motivate them. So you get rewarded for doing things requested and you get punished if you fail. Of course, as you can imagine, when used harshly and strictly, this type of management style can create havoc because it can create a toxic and untrustworthy workforce where everybody is always finding fault with everyone and no one trusts anyone. Further it could lead to hostile reactions like resentment towards each other and management. 

Theory Y

On the other hand, we have Theory Y. As mentioned, Theory Y looks at the positive assumptions of the employees. Managers using a Theory Y style believe that employees are self-motivated. They love their work and therefore strive to do better in it, with no big push from management. With this type of management style, there is not a lot of supervision happening. Employees direct themselves and take responsibility over their work.

It’s a little more touchy-feely, and in general, managers have more of a relationship with the employees under Theory Y management style. It’s on a deeper level, it’s more personal. So it creates a healthier environment within the workspace. 

Which one then?

You may think, well, this sounds totally bad. Why would any manager use a Theory X management stylethen? And the truth is, there are some uses for this approach and it is good for certain situations. In general, because of the hands-on and supervised way of managing people, Theory X is good for producing a uniformed and systematic operation. So in my mind, I can see it working in a kind of assembly work, where there is a workflow on where materials are used and worked on, until it is molded and created into the final product. It goes through various steps and processes, and it has to be very structured and mechanical.

And for all its goodness, Theory Y is not all roses. Because of the non-existence of direct supervision on this part, the limitation is that the quality of work might tend to be more subjective. It is up to the individual employee. And there is an argument that could be made that the quality of work for one employee might totally differ to the quality standard of another person. This could be detrimental especially if you are trying to get consistent results because it won’t beconsistent if you have two sets of standards for your quality of work.

Show notes simplified

In this episode, MJ the tutor touches upon the topic of motivation at work once again, but this time, discussing the concept of Theory X and Theory Y, and how management uses this theory to affect employees’ productivity and satisfaction at work. 

“Ding Ding Small Bell” ( by JohnsonBrandEditing ( licensed under CC0 Licence.

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