McGregor’s Theory-X and Theory-Y

This question of motivation has been studied by management theorists and social psychologists for decades, in attempts to identify successful approaches to management.

Douglas Murray McGregor

Social psychologist McGregor’s Theory-X and Theory-Yof MIT expounded two contrasting theories on human motivation and management in the 1960s: The X Theory and the Y Theory. McGregor promoted Theory Y as the basis of good management practice, pioneering the argument that workers are not merely cogs in the company machinery, as Theory X-Type organizations seemed to believe. 

The theories look at how a manager's perceptions of what motivates his or her team members affects the way he or she behaves. By understanding how your assumptions about employees’ motivation can influence your management style, you can adapt your approach appropriately, and so manage people more effectively.

Understanding the Theory X & Y

Your management style is strongly influenced by your beliefs and assumptions about what motivates members of your team: If you believe that team members dislike work, you will tend towards an authoritarian style of management; On the other hand, if you assume that employees take pride in doing a good job, you will tend to adopt a more participative style.

Theory X
Theory X assumes that employees are naturally unmotivated and dislike working, and this encourages an authoritarian style of management. According to this view, management must actively intervene to get things done. This style of management assumes that workers: 

• Dislike working.
• Avoid responsibility and need to be directed.
• Have to be controlled, forced, and threatened to deliver what's needed.
• Need to be supervised at every step, with controls put in place.
• Need to be enticed to produce results; otherwise they have no ambition or incentive to work.

X-Type organizations tend to be top heavy, with managers and supervisors required at every step to control workers. There is little delegation of authority and control remains firmly centralized. 

McGregor recognized that X-Type workers are in fact usually the minority, and yet in mass organizations, such as large scale production environment, X Theory management may be required and can be unavoidable.

Theory Y
Theory Y expounds a participative style of management that is de-centralized. It assumes that employees are happy to work, are self-motivated and creative, and enjoy working with greater responsibility. It assumes that workers: 

• Take responsibility and are motivated to fulfill the goals they are given.
• Seek and accept responsibility and do not need much direction.
• Consider work as a natural part of life and solve work problems imaginatively

This more participative management style tends to be more widely applicable. In Y-Type organizations, people at lower levels of the organization are involved in decision making and have more responsibility.

Comparing Theory X and Theory Y

Motivation
Theory X assumes that people dislike work; they want to avoid it and do not want to take responsibility. Theory Y assumes that people are self-motivated, and thrive on responsibility. 

Management Style and Control
In a Theory X organization, management is authoritarian, and centralized control is retained, whilst in Theory Y, the management style is participative: Management involves employees in decision making, but retains power to implement decisions. 

Work Organization
Theory X employees tend to have specialized and often repetitive work. In Theory Y, the work tends to be organized around wider areas of skill or knowledge; Employees are also encouraged to develop expertise and make suggestions and improvements. 

Rewards and Appraisals
Theory X organizations work on a ‘carrot and stick’ basis, and performance appraisal is part of the overall mechanisms of control and remuneration. In Theory Y organizations, appraisal is also regular and important, but is usually a separate mechanism from organizational controls. Theory Y organizations also give employees frequent opportunities for promotion. 

Application 
Although Theory X management style is widely accepted as inferior to others, it has its place in large scale production operation and unskilled production-line work. Many of the principles of Theory Y are widely adopted by types of organization that value and encourage participation. Theory Y-style management is suited to knowledge work and professional services. Professional service organizations naturally evolve Theory Y-type practices by the nature of their work; Even highly structure knowledge work, such as call center operations, can benefits from Theory Y principles to encourage knowledge sharing and continuous improvement.

THEORY X AND THEORY Y IN THE TWENTY-FIRST CENTURY 
McGregor's work on Theory X and Theory Y has had a significant impact on management thought and practice in the years since he first articulated the concepts. In terms of the study of management, McGregor's concepts are included in the overwhelming majority of basic management textbooks, and they are still routinely presented to students of management. Most textbooks discuss Theory X and Theory Y within the context of motivation theory; others place Theory X and Theory Y within the history of the organizational humanism movement. 

Theory X and Theory Y are often studied as a prelude to developing greater understanding of more recent management concepts, such as job enrichment, the job-characteristics model, and self-managed work teams. Although the terminology may have changed since the 1950s, McGregor's ideas have had tremendous influence on the study of management. 

In terms of the practice of management, the workplace of the early twenty-first century, with its emphasis on self-managed work teams and other forms of worker involvement programs, is generally consistent with the precepts of Theory Y. There is every indication that such programs will continue to increase, at least to the extent that evidence of their success begins to accumulate.