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Douglas McGregor further developed the needs concept of Maslow and specifically applied it to
the workplace. McGregor maintained that every manager made assumptions about their
employees and adopted a management approach based upon these assumptions. He maintained
there were two main categories and that managers adopted one or the other.
The first category, which he termed Theory X, he maintained was the dominant management
approach and assumed:
the average human being has an inherent dislike of work and will avoid it if possible,
because of this most people needed to be coerced, controlled, directed and threatened
with punishment to get them to put adequate effort into the achievement of organisational
objectives, and
the average person prefers to be directed, wishes to avoid responsibility, has very little
ambition and wants security above all else.
McGregor maintains that the application of this approach, as well as misunderstanding the real
needs of employees, creates a self-fulfilling outcome because it forces people to become like this
they have no alternative.
McGregor proposed an alternative set of assumptions which he called Theory Y. The
assumptions here are virtually the opposite to Theory X. They are :
The average person learns under proper conditions to not only accept responsibility but
also seek it.
The ability to seek and develop innovative problem solving approaches is widely, not
narrowly distributed across the whole population.
In most work organisations the abilities of most employees is only partially utilised.
McGregor advocated that the application of Theory Y, would not only meet the needs of the
organisation but also those of the employee. He believed that Theory X at best only met Maslows
Deficiency needs, whilst Theory Y also met the Growth Needs. You would thus have more
motivated employees if you adopted Theory Y.
Douglas McGregor
Theory X and Theory Y
Douglas McGregor in his book, "The Human Side of Enterprise" published in 1960 has
examined theories on behavior of individuals at work, and he has formulated two models which
he calls Theory X and Theory Y.
Theory X Assumptions
The average human being has an inherent dislike of work and will avoid it if he can.
Because of their dislike for work, most people must be controlled and threatened before
they will work hard enough.
The average human prefers to be directed, dislikes responsibility, is unambiguous, and
desires security above everything.
These assumptions lie behind most organizational principles today, and give rise both to
"tough" management with punishments and tight controls, and "soft" management which
aims at harmony at work.
Both these are "wrong" because man needs more than financial rewards at work, he also
needs some deeper higher order motivation - the opportunity to fulfill himself.
Theory X managers do not give their staff this opportunity so that the employees behave
in the expected fashion.
Theory Y Assumptions
The expenditure of physical and mental effort in work is as natural as play or rest.
Control and punishment are not the only ways to make people work, man will direct
himself if he is committed to the aims of the organization.
The average man learns, under proper conditions, not only to accept but to seek
responsibility.
Imagination, creativity, and ingenuity can be used to solve work problems by a large
number of employees.
Under the conditions of modern industrial life, the intellectual potentialities of the
average man are only partially utilized.
These assumptions are based on social science research which has been carried out, and
demonstrate the potential which is present in man and which organizations should recognize in
order to become more effective.
McGregor sees these two theories as two quite separate attitudes. Theory Y is difficult to put into
practice on the shop floor in large mass production operations, but it can be used initially in the
managing of managers and professionals.
In "The Human Side of Enterprise" McGregor shows how Theory Y affects the management of
promotions and salaries and the development of effective managers. McGregor also sees Theory
Y as conducive to participative problem solving.
It is part of the manager's job to exercise authority, and there are cases in which this is the only
method of achieving the desired results because subordinates do not agree that the ends are
desirable.
However, in situations where it is possible to obtain commitment to objectives, it is better to
explain the matter fully so that employees grasp the purpose of an action. They will then exert
self-direction and control to do better work - quite possibly by better methods - than if they had
simply been carrying out an order which the y did not fully understand.
The situation in which employees can be consulted is one where the individuals are emotionally
mature, and positively motivated towards their work; where the work is sufficiently responsible
to allow for flexibility and where the employee can see her or his own position in the
management hierarchy. If these conditions are present, managers will find that the participative
approach to problem solving leads to much improved results compared with the alternative
approach of handing out authoritarian orders.
Once management becomes persuaded that it is under estimating the potential of its human
resources, and accepts the knowledge given by social science researchers and displayed in
Theory Y assumptions, then it can invest time, money and effort in developing improved
applications of the theory.
McGregor realizes that some of the theories he has put forward are unrealizable in practice, but
wants managers to put into operation the basic assumption that:
Staff will contribute more to the organization if they are treated as responsible and valued
employees.
Douglas McGregor, an American social psychologist, proposed his famous X-Y theory in his
1960 book 'The Human Side Of Enterprise'. Theory x and theory y are still referred to commonly
in the field of management and motivation, and whilst more recent studies have questioned the
rigidity of the model, Mcgregor's X-Y Theory remains a valid basic principle from which to
develop positive management style and techniques. McGregor's XY Theory remains central to
organizational development, and to improving organizational culture.
McGregor's X-Y theory is a salutary and simple reminder of the natural rules for managing
people, which under the pressure of day-to-day business are all too easily forgotten.
McGregor's ideas suggest that there are two fundamental approaches to managing people. Many
managers tend towards theory x, and generally get poor results. Enlightened managers use theory
y, which produces better performance and results, and allows people to grow and develop.
McGregor's ideas significantly relate to modern understanding of the Psychological Contract,
which provides many ways to appreciate the unhelpful nature of X-Theory leadership, and the
useful constructive beneficial nature of Y-Theory leadership.
The average person dislikes work and will avoid it he/she can.
Therefore most people must be forced with the threat of punishment to work
towards organisational objectives.
elitist
short temper
shouts
one-way communicator
poor listener
anti-social
takes criticism badly and likely to retaliate if from below or peer group
unhappy
If an X theory boss tells you how to do things in ways that are not
comfortable or right for you, then don't questioning the process, simply
confirm the end-result that is required, and check that it's okay to 'streamline
the process' or 'get things done more efficiently' if the chance arises - they'll
normally agree to this, which effectively gives you control over the 'how',
provided you deliver the 'what' and 'when'.
And this is really the essence of managing upwards X theory managers - focus and get agreement
on the results and deadlines - if you consistently deliver, you'll increasingly be given more
leeway on how you go about the tasks, which amounts to more freedom. Be aware also that
many X theory managers are forced to be X theory by the short-term demands of the
organisation and their own superiors - an X theory manager is usually someone with their own
problems, so try not to give them any more.
Theory X and Theory Y
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
Resists change.
Essentially, Theory X assumes that people work only for money and security.
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
Drawing on Maslow's hierarchy, McGregor argues that a satisfied need no longer motivates.
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. Consequently, the 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:
People will be committed to their objectives if rewards are in place that address higher
needs such as self-fulfillment.
Most people can handle responsibility because creativity and ingenuity are common in
the population.
Under these assumptions, there is an opportunity to align personal goals with organizational
goals by using the employee's own quest for fulfillment as the motivator. McGregor stressed that
Theory Y management does not imply a soft approach.
McGregor recognized that some people may not have reached the level of maturity assumed by
Theory Y and therefore may need tighter controls that can be relaxed as the employee develops.
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.
Performance Appraisals - Having the employee set objectives and participate in the
process of evaluating how well they were met.
5. Theory X
8. Theory Y
Description of Theory Y
Management influenced by this theory assumes that employees are ambitious, self-motivated,
anxious to accept greater responsibility and exercise self-control, self-direction, autonomy and
empowerment. Management believes that employees enjoy their work. They also believe that,
given a chance, employees have the desire to be creative at their work place and become forward
looking. There is a chance for greater productivity by giving employees the freedom to perform
to the best of their abilities, without being bogged down by rules.
A Theory Y manager believes that, given the right conditions, most people will want to do well at
work and that there is a pool of unused creativity in the workforce. They believe that the
satisfaction of doing a good job is a strong motivation in itself. A Theory Y manager will try to
remove the barriers that prevent workers from fully actualizing themselves.
Many people interpret Theory Y as a positive set of assumptions about workers. A close reading
of The Human Side of Enterprise reveals that McGregor simply argues for managers to be open
to a more positive view of workers and the possibilities that create enthusiasm.
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 McGregors 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.
THEORY X AND Y
DOUGLAS McGREGOR
Introduction
Douglas McGregor suggested that organisations manage employees based on their view of what
employees are like. This view of employees is usually somewhere between one of two extremes.
McGregor called these extremes theory X and theory Y.
Theory X
Theory X organisations hold a negative view of employees, they believe employees:
Are not motivated by work alone, they need pay incentives or threats
Require control and punitive measures to prevent misconduct
A manager with a theory X view will therefore attempt to coerce employees into work through
control and punishment.
Theory Y
Theory Y organisations hold a positive view of employees, they believe employees:
Are motivated and will work hard under the right conditions
Learn to like responsibility and can handle responsibility
Are loyal and care about their employer if their work is appreciated
A manager with a theory Y view of employees is likely to attempt to motivate employees through
a culture of reward and recognition.
Summary
McGregor believed that the features of each view (theory X or theory Y) have a place in the
workplace. The type of work will determine which theory will work best for the organisation. He
carried out experiments to find out which theory would suit each organisational type.