Theory X & Theory Y

Understanding Douglas McGregor's Theory X And Theory Y

Douglas McGregor (1960) began investigation into the organizational behavior of individuals at work. From his research came two models “Theory X and Theory Y”, which he devised to describe two contrasting beliefs that managers hold about their paid workers.

Theory X managers believe employees must be controlled to meet organizational goals. Theory Y managers believe employees would be motivated to meet goals in the absence of organizational controls, given favorable conditions.

McGregor’s work was based on Maslow’s Hierarchy of Needs Opens in new window; he grouped Maslow’s hierarchy into ‘lower order’ needs (Theory X) and ‘higher order’ needs (Theory Y). In His classic book, The Human Side of Enterprise, McGregor advances the thesis that managers should give more attention to the social and self-actualizing needs of people at work. He called upon managers to shift their view of human nature away from a set of assumptions he called Theory X and toward ones he called Theory Y.

Assumptions of Theory X

According to Theory X, management assumes that its employees are resistant to work and must be controlled to meet organizational goals. Theory X managers were likely to use punishments and rewards as mechanisms of control.

McGregor (1960) posited that managers holding Theory X assumptions approach their jobs believing their workers are inherently lazy, lack ambition, generally dislike work, and will avoid work and responsibility whenever possible—adding that they prefer to be led rather than to lead.

According to this theory, employees will show little ambition without an enticing incentive program and will avoid responsibility whenever they can. A ‘Theory X’ manager believes that his or her employees do not really want to work, that they would rather avoid responsibility and that it is the manager’s job to structure the work and energize the employee. They assume that workers need to be closely supervised and comprehensive systems of controls need to be developed for the organization to achieve its goals.

Assumptions of Theory Y

In contrast to Theory X, Theory Y management assumes that its employees are ambitious, self-motivated, and anxious to accept greater responsibility and exercise self-control and self-direction. They believe employees enjoy their mental and physical work activities and have the desire to be imaginative and creative in their jobs. If these employees are afforded the opportunity, the results will be greater productivity.

McGregor posited that a ‘Theory Y’ manager believes that, given the right conditions, most people will want to do well at work. They believe that the satisfaction of doing a good job is a strong motivator within the organization (McGregor, 1960). Instead of a rigid use of concrete punishments and rewards, Theory Y managers were more likely to provide expanded responsibilities and challenges to subordinates.

The following table lists five traits observable in people in each category that underlie McGregor’s Theory X and Theory Y

Theory X (Immature Behavior)TraitTheory Y (Mature Behavior)
People find work dislike work.Work attitudePeople regards work as natural as play, given favorable conditions.
People are not ambitious and prefer direction.AmbitionPeople are self-directed in pursuing organizational goals.
People do not solve organizational problems creatively.CreativityPeople are creative in solving problems.
People are motivated only by physiological and safety factorsMotivationPeople are motivated at all levels of Maslow's hierarchy of needs.
People require close control and coercion to achieve goalsControlPeople are self-controlled if properly motivated.

An important aspect of McGregor’s ideas is his belief that managers who hold either set of assumptions can create self-fulfilling prophecies Opens in new window—that is, through their behavior they create situations where others act in ways that confirm the original expectations.

Managers with Theory X assumptions, for example, act in a very directive “command-and-control” fashion that gives people little personal say over their work. These supervisory behaviors create passive, dependent, and reluctant subordinates, who tend to do only what they are told to or required to do. This enforces the original Theory X viewpoint.

In contrast to Theory X, managers with Theory Y assumptions tend to behave in “participative” ways that allow subordinates more job involvement, freedom, and responsibility. This creates opportunities to satisfy esteem and self-actualization needs; workers tend to perform as expected with initiative and high performance. The self-fulfilling prophecy thus becomes a positive one.