Theory X and Theory Y

Theory X and Theory Y

Douglas  McGregor  was a  management professor at MIT  Sloan School of Management and president of Antioch College  from 1948 to 1954. He also taught in IIM Calcutta.

In his 1960 book, The Human Side of Enterprise, Douglas McGregor proposed two theories  by which to view employee motivation. He avoided descriptive labels and simply called the theories Theory X and Theory Y. Both of these theories begin with the premise that management's role is to assemble the factors of production, including

people, for the economic benefit of the firm. Beyond this point, the two theories of management diverge. 

Theory X

Theory X assumes that the average person:

 Dislikes work and attempts to avoid it.

 Has no ambition, wants no responsibility, and would rather follow than lead.

 Is self-centered and therefore does not care about organizational goals.

 Resists change.

 Is gullible and not particularly intelligent.

Theory X - The Hard Approach and Soft Approach

Under Theory X, management approaches can range from a hard approach to a soft

approach.

The hard approach relies on coercion, implicit threats, close supervision, and tight

controls, essentially an environment of command and control. The soft appoach is to be

permissive and seek harmony with the hope that in return employees will cooperate when

asked to do so. However, neither of these extremes is optimal. The hard approach results

in hostility, purposely low-output, and hard-line union demands. The soft approach

results in ever-increasing requests for more rewards in exchange for ever-decreasing

work output.

The optimal management approach under Theory X probably would be somewhere

between these extremes. However, McGregor asserts that neither approach is appropriate

because the assumptions of Theory X are not correct.

The Problem with Theory X

Under Theory X the firm relies on money and benefits to satisfy employees' lower needs, and once those needs are satisfied the source of motivation is lost. Theory X management styles in fact hinder the satisfaction of higher-level needs.Only way that employees can attempt to satisfy their higher level needs in their work is by seeking more compensation, so it is quite predictable that they will focus on monetary rewards.

 While money may not be the most effective way to self-fulfillment, in a Theory X environment it may be the only way. Under Theory X, people use work to satisfy their lower needs, and seek to satisfy their higher needs in their leisure time. But it is in satisfying their higher needs that employees can be most productive.

McGregor makes the point that a command and control environment is not effective because it relies on lower needs as levers of motivation, but in modern society those needs already are satisfied and thus no longer are motivators. In this situation, one would

expect employees to dislike their work, avoid responsibility, have no interest in

organizational goals, resist change, etc., thus making Theory X a self-fulfilling prophecy.

From this reasoning, McGregor proposed an alternative: Theory Y

Theory Y

The higher-level needs of esteem and self-actualization are continuing needs in that they are never completely satisfied. As such, it is these higher-level needs through which employees can best be motivated.

Theory Y makes the following general assumptions:

 Work can be as natural as play and rest.

 People will be self-directed to meet their work objectives if they are committed to

them.

 People will be committed to their objectives if rewards are in place that address

higher needs such as self-fulfillment.

 Under these conditions, people will seek responsibility.

 Most people can handle responsibility because creativity and ingenuity are

common in the population. 

The higher-level needs of esteem and self-actualization are continuing needs in that they

are never completely satisfied. As such, it is these higher-level needs through which

employees can best be motivated.

Theory Y makes the following general assumptions:

 Work can be as natural as play and rest.

 People will be self-directed to meet their work objectives if they are committed to

them.

 People will be committed to their objectives if rewards are in place that address

higher needs such as self-fulfillment.

 Under these conditions, people will seek responsibility.

 Most people can handle responsibility because creativity and ingenuity are

common in the population. 

Theory Y Management Implications

If Theory Y holds, the firm can do many things to harness the motivational energy of its

employees:

 Decentralization and Delegation - If firms decentralize control and reduce the

number of levels of management, each manager will have more subordinates and

consequently will be forced to delegate some responsibility and decision making

to them.

 Job Enlargement - Broadening the scope of an employee's job adds variety and

opportunities to satisfy ego needs.

 Participative Management - Consulting employees in the decision making process

taps their creative capacity and provides them with some control over their work

environment.

 Performance Appraisals - Having the employee set objectives and participate in

the process of evaluating how well they were met.

If properly implemented, such an environment would result in a high level of motivation

as employees work to satisfy their higher level personal needs through their jobs.

CONCLUSION

   

Though these theories are very basic in nature, they provide a platform for future generations of management theorists and practitioners to understand the changing dynamics of human behavior. Taken too literally, Theories X and Y seem to represent unrealistic extremes. Most employees (including managers) fall somewhere in between these poles. Recent studies have questioned the rigidity of the model, yet McGregor's X-Y Theories remain guiding principles to the management to evolve processes which help in organizational development. A mix of practices which ensure a healthy blend of systems and the freedom to perform at the work place is likely to motivate the employees more. This mix of practices calls for induction of technology into HR. How we can practice Talent Management in all types of organizations will indicate how well we have understood & deployed these theories X and Y in our real time environment

So you got to make a choice! is it Theory X or is it Theory Y.