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Work-from-home arrangements: A Theory X and Theory Y exhibit

IN today's business scene, a notable trend among local enterprises is the diverse array of strategies employed in facilitating remote work privileges for their workforce. Some have adopted a full work-from-home model, while others have opted for more of a hybrid scheme, wherein employees are required to report to the office for 2-3 days weekly. Nevertheless, it is an established fact that the work-from-home set-up is here to stay and will be a bargaining chip for accounting firms vying for top talent in their ranks.

While some local firms have embraced remote or hybrid work arrangements, the traditional office-centric model still prevails for many. A quick scan of job listings reveals that a sizeable portion, majority even, still expect employees to be physically present in the office throughout the week.

My posit is that the root cause of this can be traced back to social psychologist Douglas McGregor's dichotomy of "Theory X and Theory Y." In this viewpoint, Mcgregor explained that Theory X suggests that people are inherently lazy and need strict control, while Theory Y proposes that people are motivated and enjoy work, thriving in an environment of trust and empowerment.

In practical terms, Theory X would result in managers closely supervising and controlling employees, using incentives and punishments to maintain productivity. On the other hand, Theory Y would lead to managers empowering employees, providing autonomy, and trusting employees to take initiative in their work.

The work-from-home paradigm serves as a perfect exhibit for the theory. Forward-thinking firms, particularly those influenced by progressive management ideals, exhibit a more accommodating stance toward remote work, placing trust in their employees to deliver as expected from any location. Conversely, establishments steeped in traditional management doctrines harbor more skepticism regarding remote productivity. Consequently, they lean toward mandating office attendance as a means of ensuring productivity and oversight.

Management should be careful in that Theory X and Theory Y can become self-fulfilling prophecies as they influence the behavior of managers and employees based on their underlying assumptions. If the management adheres to Theory X, they may micromanage their employees, which sometimes leads to demotivation and disengagement among the staff. Conversely, management embracing Theory Y are more likely to empower and trust their employees, fostering a positive work environment and higher levels of motivation. In both cases, the initial beliefs of the manager shape their actions, which in turn influence the behavior of the employees, creating a feedback loop that reinforces the manager's original assumptions.

Admittedly, the implementation of work-from-home arrangements is not without its challenges. Without proper planning and effective internal controls to monitor progress, employees may misconstrue their responsibilities within the firm. Understandably, it is a towering hurdle for burgeoning firms to implement a system that could perfectly implement a work-from-home policy.

In navigating this landscape, management must strike a delicate balance between Theory X and Theory Y. Some firms may initially opt for a more stringent approach, akin to Theory X, to establish structure and discipline. However, the ultimate goal should be to transition toward Theory Y, wherein employees are empowered and trusted to excel in their roles autonomously.

Essentially, Theory X can serve as a starting point, providing necessary structure, but the ultimate aspiration should be to cultivate a culture aligned with Theory Y, characterized by trust, empowerment and a focus on intrinsic motivation.

Local firms face an imperative to adapt, particularly in their approach to working arrangements. The job market is flooded with variations of work-from-home opportunities, especially from accounting firms engaged in offshore outsourcing and larger, more progressive firms with an appetite for a heftier workforce headcount. To remain competitive, firms must evolve, or risk losing top talent to competitors who can meet the demands of the modern workforce.

However, it is not sufficient to simply offer work-from-home privileges that can be taken back anytime the trust of the management falls by the wayside. It's time for firms to fundamentally change the way they manage and think, and gradually embrace a culture that fosters positivity, empowerment and trust among employees. By transitioning to these values, firms not only enhance their appeal to prospective hires but also cultivate a more resilient and engaged workforce poised for success in the evolving business landscape.


Manuel Guilius A. Pamorca, CPA, CLSSGB, is a QARD Manager of Paguio, Dumayas & Associates, CPAs (PrimeGlobal Philippines) and a 2024 member of the Media Affairs Committee of the Association of CPAs in Public Practice (ACPAPP). His opinion does not reflect in any way those of these institutions.

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