Teory X and Teory Y

theory X and Theory Y are theories of human motivation created and developed by Douglas McGregor at the MIT Sloan School of Management in the 1960s that have been used in human resource management, organizational behavior, organizational communication and organizational development. They describe two very different attitudes toward workforce motivation. McGregor felt that companies followed either one or the other approach. He also thought that the key to connecting self-actualization with work is determined by the managerial trust of subordinates.

Theory X

In this theory, which many managers practice, management assumes employees are inherently lazy and will avoid work if they can. They inherently dislike work. Because of this, workers need to be closely supervised and comprehensive systems of controls developed. A hierarchical structure is needed with narrow span of control at each and every level. According to this theory, employees will show little ambition without an enticing incentive program and will avoid responsibility whenever they can. According to Michael J. Papa, if the organizational goals are to be met, theory X managers rely heavily on threat and coercion to gain their employee's compliance. Beliefs of this theory lead to mistrust, highly restrictive supervision, and a punitive atmosphere. The Theory X manager tends to believe that everything must end in blaming someone. He or she thinks all prospective employees are only out for themselves. Usually these managers feel the sole purpose of the employee's interest in the job is money. They will blame the person first in most situations, without questioning whether it may be the system, policy, or lack of training that deserves the blame. 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. One major flaw of this management style is it is much more likely to cause Diseconomies of Scale in large businesses.

Theory Y

In this theory, management assumes employees may be ambitious and self-motivated and exercise self-control. It is believed that employees enjoy their mental and physical work duties. According to Papa, to them work is as natural as play. They possess the ability for creative problem solving, but their talents are underused in most organizations. Given the proper conditions, theory Y managers believe that employees will learn to seek out and accept responsibility and to exercise self-control and self-direction in accomplishing objectives to which they are committed. 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 motivation. Many people interpret Theory Y as a positive set of beliefs 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 this creates. He thinks that Theory Y managers are more likely than Theory X managers to develop the climate of trust with employees that is required for human resource development. It's here through human resource development that is a crucial aspect of any organization. This would include managers communicating openly with subordinates, minimizing the difference between superior-subordinate relationships, creating a comfortable environment in which subordinates can develop and use their abilities. This climate would include the sharing of decision making so that subordinates have say in decisions that influence them.

Theory X and Theory Y combined

For McGregor, Theory X and Y are not different ends of the same continuum. Rather they are two different continua in themselves. Thus, if a manager needs to apply Theory Y principles, that does not preclude him from being a part of Theory X & Y.

McGregor and Maslow's hierarchy

McGregor's work was based on Maslow's hierarchy of needs. He grouped Maslow's hierarchy into "lower order" (Theory X) needs and "higher order" (Theory Y) needs. He suggested that management could use either set of needs to motivate employees. As management theorists became familiar with Maslow's work, they soon realized the possibility of connecting higher level needs to worker motivation. If organizational goals and individual needs could be integrated so that people would acquire self-esteem and, ultimately, self-actualization through work, then motivation would be self-sustaining. Today, his Theory Y principle influences the design of personnel policies, affects the way companies conduct performance reviews, and shapes the idea of pay for performance. According to the Douglas McGregor: Theory X and Theory Y article, "He is the reason we use the term 'human resources' instead of personnel department" says Brzezinski. "The idea that people are assets was unheard of before McGregor."