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"Management Assumptions" (Theory X and Theory Y)

Douglas McGregor further developed the needs concept of Maslow and specifically applied it to
the workplace. McGregor maintained that every manager made assumptions about their
employees and adopted a management approach based upon these assumptions. He maintained
there were two main categories and that managers adopted one or the other.
The first category, which he termed Theory X, he maintained was the dominant management
approach and assumed:

the average human being has an inherent dislike of work and will avoid it if possible,
because of this most people needed to be coerced, controlled, directed and threatened
with punishment to get them to put adequate effort into the achievement of organisational
objectives, and

the average person prefers to be directed, wishes to avoid responsibility, has very little
ambition and wants security above all else.

McGregor maintains that the application of this approach, as well as misunderstanding the real
needs of employees, creates a self-fulfilling outcome because it forces people to become like this
they have no alternative.
McGregor proposed an alternative set of assumptions which he called Theory Y. The
assumptions here are virtually the opposite to Theory X. They are :

Work is as natural as play or rest.


External control and threat of punishment are not the only means of bringing about effort
towards organisational objectives. People will exercise self-direction and self-control
towards the achievement of objectives they are committed to.

Commitment to objectives is a function of the rewards associated with their achievement.

The average person learns under proper conditions to not only accept responsibility but
also seek it.

The ability to seek and develop innovative problem solving approaches is widely, not
narrowly distributed across the whole population.

In most work organisations the abilities of most employees is only partially utilised.

McGregor advocated that the application of Theory Y, would not only meet the needs of the
organisation but also those of the employee. He believed that Theory X at best only met Maslows
Deficiency needs, whilst Theory Y also met the Growth Needs. You would thus have more
motivated employees if you adopted Theory Y.

Human Relations Contributors

Douglas McGregor
Theory X and Theory Y

Douglas McGregor in his book, "The Human Side of Enterprise" published in 1960 has
examined theories on behavior of individuals at work, and he has formulated two models which
he calls Theory X and Theory Y.
Theory X Assumptions
The average human being has an inherent dislike of work and will avoid it if he can.

Because of their dislike for work, most people must be controlled and threatened before
they will work hard enough.
The average human prefers to be directed, dislikes responsibility, is unambiguous, and
desires security above everything.

These assumptions lie behind most organizational principles today, and give rise both to
"tough" management with punishments and tight controls, and "soft" management which
aims at harmony at work.

Both these are "wrong" because man needs more than financial rewards at work, he also
needs some deeper higher order motivation - the opportunity to fulfill himself.

Theory X managers do not give their staff this opportunity so that the employees behave
in the expected fashion.

Theory Y Assumptions

The expenditure of physical and mental effort in work is as natural as play or rest.
Control and punishment are not the only ways to make people work, man will direct
himself if he is committed to the aims of the organization.

If a job is satisfying, then the result will be commitment to the organization.

The average man learns, under proper conditions, not only to accept but to seek
responsibility.

Imagination, creativity, and ingenuity can be used to solve work problems by a large
number of employees.

Under the conditions of modern industrial life, the intellectual potentialities of the
average man are only partially utilized.

Comments on Theory X and Theory Y Assumptions

These assumptions are based on social science research which has been carried out, and
demonstrate the potential which is present in man and which organizations should recognize in
order to become more effective.
McGregor sees these two theories as two quite separate attitudes. Theory Y is difficult to put into
practice on the shop floor in large mass production operations, but it can be used initially in the
managing of managers and professionals.
In "The Human Side of Enterprise" McGregor shows how Theory Y affects the management of
promotions and salaries and the development of effective managers. McGregor also sees Theory
Y as conducive to participative problem solving.
It is part of the manager's job to exercise authority, and there are cases in which this is the only
method of achieving the desired results because subordinates do not agree that the ends are
desirable.
However, in situations where it is possible to obtain commitment to objectives, it is better to
explain the matter fully so that employees grasp the purpose of an action. They will then exert
self-direction and control to do better work - quite possibly by better methods - than if they had
simply been carrying out an order which the y did not fully understand.
The situation in which employees can be consulted is one where the individuals are emotionally
mature, and positively motivated towards their work; where the work is sufficiently responsible
to allow for flexibility and where the employee can see her or his own position in the
management hierarchy. If these conditions are present, managers will find that the participative
approach to problem solving leads to much improved results compared with the alternative
approach of handing out authoritarian orders.
Once management becomes persuaded that it is under estimating the potential of its human
resources, and accepts the knowledge given by social science researchers and displayed in
Theory Y assumptions, then it can invest time, money and effort in developing improved
applications of the theory.
McGregor realizes that some of the theories he has put forward are unrealizable in practice, but
wants managers to put into operation the basic assumption that:

Staff will contribute more to the organization if they are treated as responsible and valued
employees.

douglas mcgregor - theory x y


Douglas McGregor's XY Theory, managing an X Theory boss, and William
Ouchi's Theory Z

Douglas McGregor, an American social psychologist, proposed his famous X-Y theory in his
1960 book 'The Human Side Of Enterprise'. Theory x and theory y are still referred to commonly
in the field of management and motivation, and whilst more recent studies have questioned the
rigidity of the model, Mcgregor's X-Y Theory remains a valid basic principle from which to
develop positive management style and techniques. McGregor's XY Theory remains central to
organizational development, and to improving organizational culture.
McGregor's X-Y theory is a salutary and simple reminder of the natural rules for managing
people, which under the pressure of day-to-day business are all too easily forgotten.
McGregor's ideas suggest that there are two fundamental approaches to managing people. Many
managers tend towards theory x, and generally get poor results. Enlightened managers use theory
y, which produces better performance and results, and allows people to grow and develop.
McGregor's ideas significantly relate to modern understanding of the Psychological Contract,
which provides many ways to appreciate the unhelpful nature of X-Theory leadership, and the
useful constructive beneficial nature of Y-Theory leadership.

theory x ('authoritarian management' style)

The average person dislikes work and will avoid it he/she can.
Therefore most people must be forced with the threat of punishment to work
towards organisational objectives.

The average person prefers to be directed; to avoid responsibility; is


relatively unambitious, and wants security above all else.

theory y ('participative management' style)

Effort in work is as natural as work and play.


People will apply self-control and self-direction in the pursuit of organisational
objectives, without external control or the threat of punishment.

Commitment to objectives is a function of rewards associated with their


achievement.

People usually accept and often seek responsibility.

The capacity to use a high degree of imagination, ingenuity and creativity in


solving organisational problems is widely, not narrowly, distributed in the
population.

In industry the intellectual potential of the average person is only partly


utilised.

tools for teaching, understanding and evaluating xy theory


factors
The XY Theory diagram and measurement tool below (pdf and doc versions) are adaptations of
McGregor's ideas for modern organizations, management and work. They were not created by
McGregor. I developed them to help understanding and application of McGregor's XY Theory
concept. The test is a simple reflective tool, not a scientifically validated instrument; it's a
learning aid and broad indicator. Please use it as such.
free XY Theory diagram (pdf)
free XY Theory diagram (doc version)
free XY Theory test tool - personal and organizational - (pdf)
free XY Theory test tool - personal and organizational - (doc version)
same free XY Theory test tool - two-page version with clearer layout and scoring - (pdf)
same free XY Theory test tool - two-page version with clearer layout and scoring - (doc version)

characteristics of the x theory manager


Perhaps the most noticeable aspects of McGregor's XY Theory - and the easiest to illustrate - are
found in the behaviours of autocratic managers and organizations which use autocratic
management styles.
What are the characteristics of a Theory X manager? Typically some, most or all of these:

results-driven and deadline-driven, to the exclusion of everything else


intolerant

issues deadlines and ultimatums

distant and detached

aloof and arrogant

elitist

short temper

shouts

issues instructions, directions, edicts

issues threats to make people follow instructions

demands, never asks

does not participate

does not team-build

unconcerned about staff welfare, or morale

proud, sometimes to the point of self-destruction

one-way communicator

poor listener

fundamentally insecure and possibly neurotic

anti-social

vengeful and recriminatory

does not thank or praise

withholds rewards, and suppresses pay and remunerations levels

scrutinises expenditure to the point of false economy

seeks culprits for failures or shortfalls

seeks to apportion blame instead of focusing on learning from the experience


and preventing recurrence

does not invite or welcome suggestions

takes criticism badly and likely to retaliate if from below or peer group

poor at proper delegating - but believes they delegate well

thinks giving orders is delegating

holds on to responsibility but shifts accountability to subordinates

relatively unconcerned with investing in anything to gain future


improvements

unhappy

how to manage upwards - managing your X theory boss


Working for an X theory boss isn't easy - some extreme X theory managers make extremely
unpleasant managers, but there are ways of managing these people upwards. Avoiding
confrontation (unless you are genuinely being bullied, which is a different matter) and delivering
results are the key tactics.

Theory X managers (or indeed theory Y managers displaying theory X


behaviour) are primarily results oriented - so orientate your your own
discussions and dealings with them around results - ie what you can deliver
and when.
Theory X managers are facts and figures oriented - so cut out the incidentals,
be able to measure and substantiate anything you say and do for them,
especially reporting on results and activities.

Theory X managers generally don't understand or have an interest in the


human issues, so don't try to appeal to their sense of humanity or morality.
Set your own objectives to meet their organisational aims and agree these
with the managers; be seen to be self-starting, self-motivating, selfdisciplined and well-organised - the more the X theory manager sees you are
managing yourself and producing results, the less they'll feel the need to do
it for you.

Always deliver your commitments and promises. If you are given an


unrealistic task and/or deadline state the reasons why it's not realistic, but be
very sure of your ground, don't be negative; be constructive as to how the
overall aim can be achieved in a way that you know you can deliver.

Stand up for yourself, but constructively - avoid confrontation. Never threaten


or go over their heads if you are dissatisfied or you'll be in big trouble
afterwards and life will be a lot more difficult.

If an X theory boss tells you how to do things in ways that are not
comfortable or right for you, then don't questioning the process, simply
confirm the end-result that is required, and check that it's okay to 'streamline
the process' or 'get things done more efficiently' if the chance arises - they'll
normally agree to this, which effectively gives you control over the 'how',
provided you deliver the 'what' and 'when'.

And this is really the essence of managing upwards X theory managers - focus and get agreement
on the results and deadlines - if you consistently deliver, you'll increasingly be given more
leeway on how you go about the tasks, which amounts to more freedom. Be aware also that
many X theory managers are forced to be X theory by the short-term demands of the
organisation and their own superiors - an X theory manager is usually someone with their own
problems, so try not to give them any more.
Theory X and Theory Y

In his 1960 book, The Human Side of Enterprise, Douglas McGregor proposed two theories by
which to view employee motivation. He avoided descriptive labels and simply called the theories
Theory X and Theory Y. Both of these theories begin with the premise that management's role
is to assemble the factors of production, including people, for the economic benefit of the firm.
Beyond this point, the two theories of management diverge.
Theory X

Theory X assumes that the average person:

Dislikes work and attempts to avoid it.


Has no ambition, wants no responsibility, and would rather follow than lead.

Is self-centered and therefore does not care about organizational goals.

Resists change.

Is gullible and not particularly intelligent.

Essentially, Theory X assumes that people work only for money and security.
Theory X - The Hard Approach and Soft Approach

Under Theory X, management approaches can range from a hard approach to a soft approach.
The hard approach relies on coercion, implicit threats, close supervision, and tight controls,
essentially an environment of command and control. The soft appoach is to be permissive and
seek harmony with the hope that in return employees will cooperate when asked to do so.
However, neither of these extremes is optimal. The hard approach results in hostility, purposely
low-output, and hard-line union demands. The soft approach results in ever-increasing requests
for more rewards in exchange for ever-decreasing work output.
The optimal management approach under Theory X probably would be somewhere between
these extremes. However, McGregor asserts that neither approach is appropriate because the
assumptions of Theory X are not correct.
The Problem with Theory X

Drawing on Maslow's hierarchy, McGregor argues that a satisfied need no longer motivates.
Under Theory X the firm relies on money and benefits to satisfy employees' lower needs, and
once those needs are satisfied the source of motivation is lost. Theory X management styles in
fact hinder the satisfaction of higher-level needs. Consequently, the only way that employees can
attempt to satisfy their higher level needs in their work is by seeking more compensation, so it is
quite predictable that they will focus on monetary rewards. While money may not be the most

effective way to self-fulfillment, in a Theory X environment it may be the only way. Under
Theory X, people use work to satisfy their lower needs, and seek to satisfy their higher needs in
their leisure time. But it is in satisfying their higher needs that employees can be most
productive.
McGregor makes the point that a command and control environment is not effective because it
relies on lower needs as levers of motivation, but in modern society those needs already are
satisfied and thus no longer are motivators. In this situation, one would expect employees to
dislike their work, avoid responsibility, have no interest in organizational goals, resist change,
etc., thus making Theory X a self-fulfilling prophecy. From this reasoning, McGregor proposed
an alternative: Theory Y.
Theory Y

The higher-level needs of esteem and self-actualization are continuing needs in that they are
never completely satisfied. As such, it is these higher-level needs through which employees can
best be motivated.
Theory Y makes the following general assumptions:

Work can be as natural as play and rest.


People will be self-directed to meet their work objectives if they are committed to them.

People will be committed to their objectives if rewards are in place that address higher
needs such as self-fulfillment.

Under these conditions, people will seek responsibility.

Most people can handle responsibility because creativity and ingenuity are common in
the population.

Under these assumptions, there is an opportunity to align personal goals with organizational
goals by using the employee's own quest for fulfillment as the motivator. McGregor stressed that
Theory Y management does not imply a soft approach.
McGregor recognized that some people may not have reached the level of maturity assumed by
Theory Y and therefore may need tighter controls that can be relaxed as the employee develops.
Theory Y Management Implications

If Theory Y holds, the firm can do many things to harness the motivational energy of its
employees:

Decentralization and Delegation - If firms decentralize control and reduce the number of
levels of management, each manager will have more subordinates and consequently will
be forced to delegate some responsibility and decision making to them.

Job Enlargement - Broadening the scope of an employee's job adds variety and
opportunities to satisfy ego needs.

Participative Management - Consulting employees in the decision making process taps


their creative capacity and provides them with some control over their work environment.

Performance Appraisals - Having the employee set objectives and participate in the
process of evaluating how well they were met.

If properly implemented, such an environment would result in a high level of motivation as


employees work to satisfy their higher level personal needs through their jobs.
Transcript
1. MGMT 571 Organizational Behavior Instructor: Asst. Prof. Dr. Doan
Unlucan McGregor Theories X and Theory Y Student:
2. Introducton 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 1960. They describe two contrasting models of
workforce motivation. Theory X and Theory Y have to do with the
perceptions managers hold on their employees, not the way they generally
behave. It is attitude not attributes.

3. His work is based upon Maslow's Hierarchy of Needs, where he grouped


the hierarchy into lower-order needs (Theory X) and higher-order needs
(Theory Y). He suggested that management could use either set of needs to
motivate employees, but better results would be gained by the use of Theory
Y, rather than Theory X. These two views theorized how people view human
behavior at work and organizational life.

4. Understanding the Theories Our management style is strongly influenced


by our beliefs and assumptions about what motivates members of your
team: If you believe that team members dislike work, you will have 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
participation style.

5. Theory X

6. 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 motivation to work.

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

8. Theory Y

9. Theory Y Theory Y shows a participation style of management that is de-


centralized. It assumes that employees are happy to work, are selfmotivated and creative, and enjoy working with greater responsibility. 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.

10. Theory Y Continued This management style tends to be more widely


appropriate. In Y-Type organizations, people at lower levels of the
organization are involved in decision making and have more responsibility.
Theory X and Theory Y relate to Maslow's hierarchy of needs in how human
behavior and motivation are main priorities in the workplace in order to
maximize output. In relation to Theory Y, the organization is trying to create
the most symbiotic relationship between the managers and workers, which
relates to Maslow's needs for self-actualization and Esteem. For selfactualization issues relate to Esteem when the manager is trying to promote
each team member's selfesteem, confidence, achievement, happiness,
respect of others, and respect by others.

11. Comparing Theory X and Theory Y

12. 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, while in
Theory Y, the management style involves employees in decision making, but
retains power to implement decisions.

13. 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 Theory X
organizations work on a carrot and stick basis, and performance is part of
the overall mechanisms of control. In Theory Y organizations, appreciation is
also regular and important, but is usually a separate mechanism from
organizational controls. Theory Y organizations also give employees frequent
opportunities for promotion. Accepting creative and innovative ideas provided
by employees.

14. Application Although Theory X management style is widely accepted as


poor to others, but somehow, it has its place of beneficial in large scale
production operation and unskilled production-line work. 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 benefit from Theory Y principles to encourage
knowledge sharing and continuous improvement.

15. Conclusion Understanding your assumptions about employees


motivation can help you learn to manage more effectively. Thank You for
Listening!

Theory X and Theory Y : Theories of employee Motivation


Summary
Theory X and Theory Y pertain to employee motivation and have been used in human resource
management, organizational behavior analysis, and organizational development. EmpXtrack an
Integrated Human Capital and Talent Management Tool is based on such theories and helps
organizations to transform their human resource practices.
Theory X and Theory Y : Theories of employee Motivation
Theory X and Theory Y, created and developed by Douglas McGregor at the MIT Sloan School
of Management in the 1960s, pertain to employee motivation and have been used in human
resource management, organizational behavior analysis, and organizational development. They
describe two very different attitudes towards workforce motivation. McGregor felt that
companies followed either one of these approaches.
Description of Theory X
In this theory management assumes employees are inherently lazy and will avoid work if they
can. Because of this, workers need to be closely supervised and comprehensive systems of
control put in place. A hierarchical structure is needed, with narrow span of control at each level,
for effective management. According to this theory employees will show little ambition without
an enticing incentive program and will avoid responsibility whenever they can.
The managers influenced by Theory X believe that everything must end in blaming someone.
They think most employees are only out for themselves and their sole interest in the job is to earn
money. They tend to blame employees in most situations, without questioning the systems,
policy, or lack of training which could be the real cause of failures.
Managers that subscribe to Theory X tend to take a rather pessimistic view of their employees. A
Theory X manager believes that it is the managers job to structure the work and energize the
employee. The result of this line of thought is that Theory X managers naturally adopt a more
authoritarian style based on the threat of punishment. Critics believe that a Theory X manager
could be an impediment to employee morale & productivity.

Description of Theory Y
Management influenced by this theory assumes that employees are ambitious, self-motivated,
anxious to accept greater responsibility and exercise self-control, self-direction, autonomy and
empowerment. Management believes that employees enjoy their work. They also believe that,
given a chance, employees have the desire to be creative at their work place and become forward
looking. There is a chance for greater productivity by giving employees the freedom to perform
to the best of their abilities, without being bogged down by rules.
A Theory Y manager believes that, given the right conditions, most people will want to do well at
work and that there is a pool of unused creativity in the workforce. They believe that the
satisfaction of doing a good job is a strong motivation in itself. A Theory Y manager will try to
remove the barriers that prevent workers from fully actualizing themselves.
Many people interpret Theory Y as a positive set of assumptions 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 create enthusiasm.
Conclusion
Though these theories are very basic in nature, they provide a platform for future generations of
management theorists and practitioners to understand the changing dynamics of human behavior.
Taken too literally, Theories X and Y seem to represent unrealistic extremes. Most employees
(including managers) fall somewhere in between these poles. Recent studies have questioned the
rigidity of the model, yet McGregors X-Y Theories remain guiding principles to the
management to evolve processes which help in organizational development. A mix of practices
which ensure a healthy blend of systems and the freedom to perform at the work place is likely to
motivate the employees more. This mix of practices calls for induction of technology into HR.
How we can practice Talent Management in all types of organizations will indicate how well we
have understood & deployed these theories X and Y in our real time environment.
THEORY X AND Y
DOUGLAS McGREGOR
Introduction
Douglas McGregor suggested that organisations manage employees based on their view of what
employees are like. This view of employees is usually somewhere between one of two extremes.
McGregor called these extremes theory X and theory Y.

Theory X
Theory X organisations hold a negative view of employees, they believe employees:

Are lazy and work out of need, not choice


Resist change

Do not like responsibility and prefer work instructions

Are not motivated by work alone, they need pay incentives or threats
Require control and punitive measures to prevent misconduct

Are not loyal and do not care about their employer

A manager with a theory X view will therefore attempt to coerce employees into work through
control and punishment.

Theory Y
Theory Y organisations hold a positive view of employees, they believe employees:

Are motivated and will work hard under the right conditions
Learn to like responsibility and can handle responsibility

Prefer rewards over punitive measures

Are loyal and care about their employer if their work is appreciated

Are open to change

A manager with a theory Y view of employees is likely to attempt to motivate employees through
a culture of reward and recognition.
Summary
McGregor believed that the features of each view (theory X or theory Y) have a place in the
workplace. The type of work will determine which theory will work best for the organisation. He
carried out experiments to find out which theory would suit each organisational type.