Future Business Leaders of America (FBLA) Business Management Practice Test

What does Theory Y assume about employee performance?

1. Employees will work best with collective decision-making.

2. Employees need strict rules to perform well.

3. Employees perform well only in structured environments.

4. Employees thrive in highly regulated settings.

The correct answer is: Employees will work best with collective decision-making.

Theory Y, developed by Douglas McGregor, posits that employees are inherently motivated to work well and contribute positively to their organization. It assumes that when given the right conditions, individuals are self-directed, capable of taking responsibility, and able to make decisions that align with organizational goals. This theory emphasizes the potential for personal growth and the importance of a supportive work environment. The correct assumption regarding employee performance under Theory Y is that employees will work best in an environment that encourages collective decision-making. This participative approach fosters collaboration, enhances motivation, and empowers employees, allowing them to feel valued and engaged in their work. By involving employees in decision-making processes, organizations can tap into their creativity and insights, leading to improved performance and satisfaction. Other views represented in the response options suggest that employees require strict rules, structured environments, or highly regulated settings to perform effectively. These assumptions align more closely with Theory X, which portrays employees as needing close supervision and direct control to produce satisfactory results. In contrast, Theory Y promotes a more positive and empowering view of employee capabilities and motivations.