There are two commonly used motivational theories that are in organizations to motivate employees. The first one is the X-Y theory, which was developed by McGregor in1960 and the second, is the Equity theory. McGregor's theory deals with how people are perceived, treated, and how such treatment influence their performance (Beck, 2004). He divided people into two groups; one group includes people who have positive view of their jobs, other people and even themselves. The other group is the exact opposite of the first one; it includes people with negative view of things. Be it the job that they are involved in, other people and themselves.

McGregor postulated two sets of assumptions on human nature. People who have positive perception of everything do their work naturally, they enjoy working. They use their natural abilities since they are motivated (Madsen, 1968). They liken work to play. In an organization, they work with others and are normally part of a team. On the other hand, people with negative attitudes need constant supervision at work. They are incompetent and work but feeling that it would be better if they were somewhere else. They are not only self-centered but are always dishonest. They do not care about the organization, have no ambition and their sole motivation comes from money (Beck, 2004). McGregor thoroughly analyzed people's behavior; his other findings include the following. He found that the effectiveness of those in authority or lack of it is influenced by their perceptions about employees. Managers believe that employees are lazy and un-ambitious who must be pushed in order to work. Therefore, they threaten these employees, they bribe them, and they direct or even punish them in an attempt to make them work. This theory of motivation is called the carrot or the stick approach.

In the approach goals are defined for the workers, decisions are made by the management and workers expected to follow them wholeheartedly. In any case, an employee deviated; he received punishment in one way or the other. This theory perceives people as pieces of machinery. Equity theory on the other hand argues that hard working staff feels that they should be rewarded adequately. It therefore promotes fair distribution of the rewards obtained in the organization. This theory was developed by John Stacey Adams is normally referred to as the justice theory (Madsen, 1968). He argued that if employees are treated fairly, they in turn get motivated. All hardworking employees feel that since other employees are recognized and rewarded, they should also get the same treatment apart from the regular paycheck. They compare their own efforts, skills and talents to those of other employees (Beck, 2004).

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They also evaluate their input with reference to the rewards. An employee will feel that he is treated fairly if the ratio of his input to output is corresponding to his colleagues. The theory thus proposes that managers should not ignore these perceptions (Miner, 1994). A good leader should put in place measures to address the inequities. This should be done in line with the organization's policies. Consideration of these measures needs to be prompt to prevent the employees from the following. The employees may try to alter outcomes by gaining favor from supervisors; they can also encourage the hardworking employees to slowdown in order for their performance to emerge greater than it actually is. As a last resort they may decide to quit and leave the organization altogether (Madsen, 1968).

The similarities between these two theories are that they both seek to motivate the employee. The X-Y theory uses threats, bribes and punishment. Equity theory employs ensures that employees are contented that their input in the organization is equivalent with the benefits they receive from it.  The difference between the two theories is in the outcome whenever they are applied. The X-Y theory is limited because workers may only be controlled to a certain limit or only a certain amount of money can be given to employees as a motivating factor (Parker, 1988). Equity theory when applied will lead to committed, creative and self-driven employees. This is because they feel and believe that their efforts are rewarded as those of their fellow workers. Equity theory.

X-Y theory focuses on the employee. The employee is pushed in order for there to be increased production. It is actually worker focused. On the other hand, equity theory focuses on performance of the workers. Workers are motivated to increase their performance, hence they seek to maximize outcome (Parker, 1988). Employees know that reward will be equivalent to output, which makes them work even harder. Money plays a big role in increasing motivation among workers. As explained, employees go to work each day in order to receive some income. Whenever the salaries are increased, there is normally a corresponding increase in effort applied thus causing higher production. All other like job security, employee benefits, recognition, reputation, and thanks come after money.

Diversity in terms of race, gender, class, ethnicity, age, belief, religion and issues of disabilities affect these theories. The on going global economic crisis also adds to complexity when analyzing how diversity affects the theories. Global giants like China and India have histories in relation to application of these two theories in their work force especially in female employees. In developing nations, lack of jobs cannot allow proper analysis of these theories. All the same, it has been proved that the X-Y theory does not work well in employees with a wide range of diverse differences. Equity theory works satisfactorily well in a diverse group of employees. If the management understands the factors that lead to employee motivation, it can cause better supervisor- subordinate relations thus leading to greater productivity at the work place.

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