Theory X & Theory Y

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Understanding Douglas McGregor's Theory X And Theory Y

McGregor's Theory X and Theory Y are two contrasting approaches to understanding and managing human motivation and behavior in the workplace. These theories reflect two different assumptions about human nature and how it influences management practices.

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 introduced in his book The Human Side of Enterprise, published in 1960. These theories reflect two different assumptions about human nature and how it influences management practices.

  • Managers with assumptions of Theory X believe employees must be controlled to meet organizational goals.
  • Managers with assumptions of Theory Y 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

Theory X is a pessimistic view of human nature that assumes that people are inherently lazy, dislike work, and avoid responsibility whenever possible.

According to Theory X, management assumes that its employees are resistant to work and must be controlled to meet organizational goals. As a result, managers must use close supervision, external rewards, and punishments to motivate employees.

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.

Key assumptions of Theory X
  • People are inherently lazy and dislike work.
  • People have little ambition and prefer to be directed.
  • People need to be coerced and controlled to work hard.
  • People avoid responsibility and prefer to be told what to do.
Management style based on Theory X
  • Close supervision
  • Rigid control
  • External rewards and punishments
  • Emphasizes obedience and compliance

Assumptions of Theory Y

Contrary to Theory X, Theory Y is a more optimistic view of human nature that assumes that people are inherently motivated and capable of self-direction.

Managers who adopt a Theory Y approach believe that employees are naturally creative, ambitious, self-motivated and anxious to accept challenging responsibility and exercise self-control and self-direction.

As a result, Managers with Theory Y assumption, create a work environment that encourages employees to take initiative, participate in decision-making, and achieve their full potential. 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.

Key assumptions of Theory Y
  • People are inherently motivated and enjoy work.
  • People are capable of self-direction and control.
  • People are committed to organizational goals if they are rewarded for their achievements.
  • People seek out and accept responsibility.
Management style based on Theory Y
  • Decentralized authority
  • Participative decision-making
  • Emphasis on employee growth and development
  • Rewards based on performance and achievement
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 propheciesOpens 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.

Which theory is better?

There is no one-size-fits-all answer to this question. The best theory for a particular situation will depend on a number of factors, including the type of work being done, the individual employees involved, and the overall culture of the organization. However, in general, Theory Y is considered to be a more effective approach to motivation in the workplace. Studies have shown that employees who are managed in a Theory Y style are more likely to be satisfied with their jobs, more productive, and more creative.

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  • References
    • Human Resource Management (Douglas McGregor's Theory X And Theory Y Pg 256-257) By Pattanayak, Biswajeet
    • Nursing Leadership and Management: An Experiential Approach (McGregor's Theory X And Theory Y pg 55) By Elaine L. La Monica, Elaine La Monica Rigolosi
    • Management (McGregor's Theory X And Theory Y pg 38) By John R. Schermerhorn, Jr
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