What is McGregors Theory X and Theory Y discuss briefly?

Our management style is firmly influenced by our beliefs and assumptions about what encourages members of our team like: If we believe that our team members dislike work, then we tend towards an authoritarian style of management. However, if we assume that employees take pride in doing a good job, we tend to adopt a more participative style.

Douglas McGregor, the eminent social psychologist, divides management style into two contrasting theories −

Theory X

This theory believes that employees are naturally unmotivated and dislike working, and this encourages an authoritarian style of management. According to this theory, management must firmly intervene to get things done. This style of management concludes that workers −

• Disfavor working.

• Abstain responsibility and the need to be directed.

• Need to be controlled, forced, and warned to deliver what's needed.

• Demand to be supervised at each and every step, with controls put in place.

• Require to be attracted to produce results, else they have no ambition or incentive to work.

McGregor observed that X-type workers are in fact mostly in minority, and yet in mass organizations, such as large scale production environment, X Theory management may be needed and can be unavoidable.

Theory Y

This theory explains a participative style of management, that is, distributive in nature. It concludes that employees are happy to work, are self-motivated and creative, and enjoy working with greater responsibility. It estimates that workers −

• Take responsibility willingly and are encouraged to fulfill the goals they are given.

• Explore and accept responsibility and do not need much guidance.

• Assume work as a natural part of life and solve work issues imaginatively.

In Y-type organizations, people at lower levels are engaged in decision making and have more responsibility.

Comparing Theory X & Theory Y

Let us now compare both the theories −

Motivation

Theory X considers that people dislike work, they want to avoid it and do not take responsibilities willingly.

While, Theory Y considers that people are self-motivated, and sportingly take responsibilities.

Management Style and Control

In Theory X-type organization, management is authoritarian, and centralized control is maintained.

While in Theory Y-type organization, the management style is participative, employees are involved decision making, but the power retains to implement decisions.

Work Organization

Theory X employees are specialized and the same work cycle continues.

In Theory Y, the work tends to be coordinated around wider areas of skill or knowledge. Employees are also motivated to develop expertise, and make suggestions and improvements.

Rewards and Appraisals

Theory X-type organizations work on a ‘carrot and stick’ basis, and performance assessment is part of the overall mechanism of control and compensation.

Coming to Theory Y-type organizations, appraisal is also regular and crucial, but is usually a separate mechanism from organizational controls. Theory Y-type organizations provide employees frequent opportunities for promotion.

Application

Admitting the fact that Theory X management style is widely accepted as inferior to others, it has its place in large scale production procedure and unskilled production-line work.

Many of the principles of Theory Y are widely accepted by different types of organization that value and motivate active participation.

Theory Y-style management is appropriate for knowledge work and licensed services. Licensed service organizations naturally develop Theory Y-type practices by the nature of their work, even high structure knowledge framework, like call center operations, benefit from its principles to motivate knowledge sharing and continuous improvement.

Theory X and Theory Y were proposed by management theorist Douglas McGregor. Both theories rest on the assumption that management is required to coordinate all aspects of the value delivery process to be productive. 

As part of this theory, managers must be able to motivate employees. Importantly, different types of employees are motivated by different sorts of rewards. 

The approaches to motivation (and the type of employee) were divided into:

What is Theory X?

This approach assumes that some employees are lazy or not motivated by the work (in fact, they have a distaste of the work), unambitious, avoid responsibility, is self-centered, indifferent about organizational goals, and prefers to be directed. 

It calls on the leader to be proactive in managing the employees and allocation of resources. She should motivate the subordinate through specific directives, closely supervise their efforts, and take steps to motivate (through reward or punishment) accordingly. 

In other words, it is an authoritative style of management.

What is Theory Y? 

Theory Y assumes that subordinates do not dislike the work, are self-motivated, can be creative, seeks responsibility (leadership roles), and can be self-directed. Leaders must respond with a participative style of management. 

As such, threats of punishment are far less effective in motivating the employee. Also, the employee is committed to an objective that is based upon rewards - though they may respond to different types of rewards. 

These types of employees generally respond better to rewards leading to esteem and self-actualization. Management attempts to get the maximum output with the least efforts on their part. 

As you can see, these theories are diametrically opposed. They do, however, view behavior as an effect of attitude rather than a trait.

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Definition: The Theory X and Theory Y are the theories of motivation given by Douglas McGregor in 1960’s. These theories are based on the premise that management has to assemble all the factors of production, including human beings, to get the work done.

McGregor believed that management can use either of the needs to motivate his employees, as grouped under theory X and theory Y. But however, the theory Y yields better results than the theory X, how? Let’s see.

Theory X: Theory X relies on the authoritarian style of management, where the managers are required to give instructions and keep a close check on each employee. As it is assumed, the employees are not motivated, and they dislike working. This theory is based on the following assumptions:

1. The employee is lazy and dislikes work.
2. He is not ambitious and dislikes responsibility and therefore prefers to be led.
3. The employee is self-centered and indifferent towards the organizational interest.
4. Management is responsible for assembling all the factors of production, Viz. Money, material, equipment, people.
5. The managers are required to control his employees, manage their efforts, motivate them, modify their behavior to comply with the organizational needs.
6. The management must intervene to keep the employees working towards the economic ends. The employees must be persuaded, rewarded, motivated, punished, controlled to get the work completed.

Theory Y: Theory Y relies on the participative style of management, where the managers assume that the employees are self-directed and self- motivated to accomplish the organizational objectives. Thus, here the management attempts to get the maximum output with least efforts on their part. Following are the assumptions of Theory Y:

1. The average human being does not inherently dislike work, they are creative and self-motivated and likes to work with greater responsibilities.
2. Employees are self-directed and self-controlled and therefore the threat of punishment is not only the means for getting the desired results.
3. The extent to which an employee is committed to objectives is determined by the rewards associated with their achievement. The most significant rewards in this context could be the satisfaction of the ego and the fulfillment of self-actualization needs.
4. The average human being is ambitious and is ready to take responsibilities. He likes to lead rather than to be led by others.
5. The employees exercise a relatively high degree of imagination and creativity in solving the complex organizational problems.

Thus, theory X and theory Y are two contrasting models that depict the set of assumptions a manager holds on his employees, which may or may not coincide with their general way of behaving. Therefore, these theories are based on the attitude, not attributes.

During the past 30 years, managers have been bombarded with two competing approaches to the problems of human administration and organization. The first, usually called the classical school of organization, emphasizes the need for well-established lines of authority, clearly defined jobs, and authority equal to responsibility. The second, often called the participative approach, focuses on the desirability of involving organization members in decision making so that they will be more highly motivated.

A version of this article appeared in the May 1970 issue of Harvard Business Review.

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