Theory X Theory Y

What are Theory X and Theory Y?

Theory X and Theory Y are theories of human work motivation and management. They were created by Douglas McGregor while he was working at the MIT Sloan School of Management in the 1950s and developed further in the 1960s. McGregor's work was rooted in motivation theory alongside the works of Abraham Maslow, who created the hierarchy of needs. The two theories proposed by McGregor describe contrasting models of workforce motivation applied by managers in human resource management, organizational behavior, organizational communication, and organizational development. Theory X explains the importance of heightened supervision, external rewards, and penalties, while Theory Y highlights the motivating role of job satisfaction and encourages workers to approach tasks without direct supervision. Management use of Theory X and Theory Y can affect employee motivation and productivity in different ways, and managers may choose to implement strategies from both theories into their practices.[1]

McGregor believed that managers' basic beliefs have a dominant influence on the way that organizations are run. Managers' assumptions about the behavior of people are central to this. McGregor argued that these assumptions fall into two broad categories - Theory X and Theory Y. These findings were detailed in his book 'The Human Side of Enterprise' which was first published in 1960.

Theory X is a management style that is characterized by a negative view of human nature and a belief that employees are inherently lazy and need to be motivated through punishment and rewards. This approach is based on the assumption that employees are not naturally motivated to work and need to be closely supervised and controlled in order to be productive.

In a Theory X organization, management is typically authoritarian and top-down, with a clear chain of command and a focus on setting strict rules and enforcing them through punishment. Employees are seen as a means to an end, and there is a focus on efficiency and productivity rather than employee development or engagement.

Theory X is often contrasted with Theory Y, which takes a more positive view of human nature and emphasizes the importance of employee motivation and development. Theory Y organizations tend to have a more participative and collaborative management style, with a focus on empowering employees and fostering a positive work culture.

Theory Y is a management style that is characterized by a positive view of human nature and a belief that employees are naturally motivated and capable of taking responsibility for their work. This approach is based on the assumption that employees are not just motivated by punishment and rewards, but also by the opportunity to learn, grow, and take on new challenges.

In a Theory Y organization, management is typically participative and collaborative, with a focus on empowering employees and fostering a positive work culture. There is a belief that employees are capable of taking on more responsibility and are motivated by the opportunity to contribute to the success of the organization. Decision-making is often decentralized, with employees being given more autonomy and the opportunity to participate in the decision-making process.

Overall, Theory Y is seen as a more holistic and positive approach to management that seeks to create a positive work culture and foster employee motivation and engagement. It is often contrasted with Theory X, which takes a more negative view of human nature and emphasizes the importance of punishment and rewards in motivating employees.

Assumptions and Implications of Theory X and Theory Y[2]

Assumptions of Theory X An average employee intrinsically does not like work and tries to escape it whenever possible.

  • Since the employee does not want to work, he must be persuaded, compelled, or warned with punishment so as to achieve organizational goals. Close supervision is required on part of managers. The managers adopt a more dictatorial style.
  • Many employees rank job security on top, and they have little or no aspiration/ ambition.
  • Employees generally dislike responsibilities.
  • Employees resist change.
  • An average employee needs formal direction.

Assumptions of Theory Y

  • Employees can perceive their job as relaxing and normal. They exercise their physical and mental efforts in an inherent manner in their jobs.
  • Employees may not require only threat, external control, and coercion to work, but they can use self-direction and self-control if they are dedicated and sincere to achieving the organizational objectives.
  • If the job is rewarding and satisfying, then it will result in employees’ loyalty and commitment to the organization.
  • An average employee can learn to admit and recognize responsibility. In fact, he can even learn to obtain responsibility.
  • The employees have skills and capabilities. Their logical capabilities should be fully utilized. In other words, the creativity, resourcefulness, and innovative potential of the employees can be utilized to solve organizational problems.

Thus, we can say that Theory X presents a pessimistic view of employees’ nature and behavior at work, while Theory Y presents an optimistic view of the employees’ nature and behavior at work. If correlate it with Maslow’s theory, we can say that Theory X is based on the assumption that employees emphasize physiological needs and safety needs; while Theory X is based on the assumption that social needs, esteem needs, and self-actualization needs dominate the employees.

McGregor views Theory Y to be more valid and reasonable than Theory X. Thus, he encouraged cordial team relations, responsible and stimulating jobs, and participation of all in the decision-making process.

Implications of Theory X and Theory Y

  • Quite a few organizations use Theory X today. Theory X encourages the use of tight control and supervision. It implies that employees are reluctant to organizational changes. Thus, it does not encourage innovation.
  • Many organizations are using Theory Y techniques. Theory Y implies that managers should create and encourage a work environment that provides opportunities for employees to take initiative and self-direction. Employees should be given opportunities to contribute to organizational well-being.

Theory Y encourages decentralization of authority, teamwork, and participative decision-making in an organization. Theory Y searches and discovers the ways in which an employee can make significant contributions to an organization. It harmonizes and matches employees’ needs and aspirations with organizational needs and aspirations.

Theory X and Theory Y in Education[3]

While McGregor’s theory was developed to improve motivation in the workplace, it has been recently used in the school system. Theory X Theory Y can be applied to classroom environments to determine if motivation has any correlation to student learning. It has been discovered that the intrinsic feedback given in the classroom setting has the greatest effect on motivation and learning.

Educators who believe in Theory X would agree with the following statements:

  • The instructor is responsible for actively sharing their knowledge with the students.
  • Students are not motivated to learn new information.
  • Students prefer to have the instructor direct their learning and not take on that responsibility themselves.
  • The instructor must ensure a controlled learning environment to prevent cheating and necessitate student learning; the students prefer to have the material summarized for them.
  • Students find learning inherently challenging and are only expected to have limited success in the course.

Educators who believe in Theory Y would have different assumptions:

  • Students are naturally predisposed to learn.
  • Responsibility for their own learning will be as natural to the students as other responsibilities.
  • Students experience self-satisfaction when they learn and this is enough to motivate them to meet their learning goals.
  • It is not necessary to threaten students with lower grades; they are not naturally lazy.
  • Traditional classrooms do not enable the potential of almost all students.
  • Students have large amounts of creative thinking and innovation that are applied throughout their learning journey.

Examples of Theory X and Theory Y Approach

At EasyJet, employees enjoy a lot of work recognition, responsibility, growth = development. One way how EasyJet motivates its employees is by rewarding those, who are willing to develop p through learning and putting in a lot of effort, by means of promotion. The informal and flat management structure gives a lot of responsibility to the company's employees. At EasyJet, employees are not just told what to do, but instead, they are requested to make suggestions, improve performance, and generally act like the owners of the company = commitment. The Theory X and Y of Douglas McGregor is one that indicates the motivational tendency of a company. Theory X of motivation holds that people are naturally irresponsible and uncooperative. They resist change and dislike responsibility. This theory is of course not supported by EasyJet. EasyJet believes in theory Y, which is, that people are naturally responsible and growth-oriented, self-motivated = have visions they want to achieve, and are interested in being productive. They are energetic and want to contribute to business growth and change. EasyJet is hiring exactly these kinds of people as they are needed for a learning organization. Of course, you have to support employees in being productive and self-motivated by providing the tools with the right concept, e.g. training, commitment, communication, etc.

Amazon, known for its innovation and superior customer service, has been criticized for being a tyrannical, authoritarian company where employees who embrace the unrelenting work culture become successful “Amabots,” while the “losers” in the species are either fired or leave voluntarily. In the past, Apple- another innovation icon, is known to have had an authoritarian work culture under Steve Jobs. These would be examples of companies that follow the Theory X management styles.

Google and Facebook use theory Y management to run their companies. They choose to use the theory y management style because their company is based on other people’s creativity to come up with different ideas and products. By creating different products and coming up with different ideas people that work at google and apple receive rewards (pay increases, free products, more vacation time, etc...) By having rewards while working at multi-million dollar companies workers are motivated to complete different projects at high standards. Theory Y works well with these companies because it is based on using creativity, having great responsibility, and getting rewards. Theory y does not always work for most companies (e.g. Car factories) because they are always creating the same product at the same standard which does not cause you to use your creativity.

Characteristics of and How to Manage an X-Theory Boss[4]

Characteristics of an X-Theory Manager
Perhaps the most noticeable aspects of McGregor's XY Theory - and the easiest to illustrate - are found in the behaviors of autocratic managers and organizations which use autocratic management styles.

Typically characteristics of an X-Theory manager are 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 ask
  • 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 is 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 an 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 key tactics.

  • Theory X managers (or indeed Theory Y managers displaying Theory X behavior) are primarily results-oriented, so orientate your discussions and dealings with them around results - i.e what you can deliver and when.
  • Theory X managers are facts and figures oriented - so cut out the incidentals, and 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 human issues, so don't try to appeal to their sense of humanity or morality. *Set your objectives to meet their organizational aims and agree on these with the managers; be seen to 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 afterward 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 question 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 the essence of managing upward 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 organization and their superiors - an X-Theory manager is usually someone with their problems, so try not to give them anymore.

Advantages and Disadvantages of Theory X and Theory Y[5]

Advantages of Theory X

  • Some employees thrive on an authoritative management style
  • Focus on achieving the company goals
  • No room for ambiguity, which makes roles and responsibilities clear

Disadvantages of Theory X

  • Some employees do not work well under such strict enforcement
  • Not everyone is motivated by financial gain, so they might not make much of an effort to achieve more
  • Can be detrimental to employee learning and development

Advantages of Theory Y

  • Much more appealing management style
  • Gives employees freedom and responsibility, which allows them to perform better
  • Encourages teamwork, development, and creative problem solving

Disadvantages of Theory Y

  • Not everyone will be comfortable with undefined working boundaries
  • It would be easy to abuse the freedom and trust
  • Can be harder to measure success, as there is less focus on quantifiable metrics

The main disadvantage of both theories is that not all employees will neatly fit into either category – the workplace is not a “two sizes fit all” environment.

Limitations of Theory X and Theory Y[6]

Limitations of Theory X

  • Not all employees can work in strict and controlled environments; it can decrease productivity.
  • An authoritative management style can hamper employee learning, building, and development.
  • Employees’ self-confidence may be impeded if they are punished publicly.
  • This theory creates a negative environment that instills fear, underconfidence, and insecurity.
  • The financial incentive does not motivate all employees. Therefore, it often cannot push employees to perform better.
  • The theory assumes that employees are lazy and cannot make decisions. This is an incorrect collective assumption.
  • Theory X provides high power to the superiors; it is biased as it does not consider employee recognition and development.

Limitations of Theory Y

  • Some employees require guidance and are not comfortable with undefined working boundaries.
  • Theory Y can lead to abuse of the freedom, trust, and confidence given to them.
  • Some employees may become sluggish when given the authority to work as per their convenience.
  • Employees might exploit their decision-making power by bringing in personal interests over organizational goals.
  • Since quantitative metrics are not a focus in this theory, it becomes hard to measure employee growth and success.
  • The theory overgeneralizes how an employee behaves in a work environment.
  • The theory can lead to managers becoming lazy, as they can delegate and decentralize all work to their subordinates in the name of transferring authority.

Critique of Theory X and Theory Y[7]

Theory Y has been criticized for being too idealistic, but if we examine each of the six tenets of Theory Y in turn, we can trace much modern thinking back to McGregor:
1. Work - as a source of satisfaction - means accepting that people need to know not just what or how, but why; the adoption of meaningful objectives is one of the keys to self-motivation.
2-4. Ownership, commitment, and responsibility are three of the key facets of empowerment
5-6. The encouragement for people to be fully exercised in the solution of organizational problems is central to action learning, Total Quality Management, strategic thinking, and knowledge exploitation.

Moss Kanter on empowerment, Bennis on leadership, and Peters on excellence as well as chaos, all acknowledge their debt to McGregor. Contemporary and subsequent commentaries on McGregor's theories have tended to see them as black and white. Harold Geneen, former President and CEO of ITT, commented that although Theories X and Y propose a neat summary of business management, no company is run in strict accordance with either one or the other. Peter Drucker argued that the contrast between Theory X and Theory Y is “largely a sham battle” since people behave in a reactive way and in fact the situation and job requirements often dictate the best approach.

The two contrasting theories are best seen perhaps as two polarising forces with which managers have to grapple. Blake and Mouton expressed this in terms of the managerial grid where managers constantly have to balance the drives and forces between tasks - getting things done - and people - how best to get them done for the benefit of the organization and the individuals doing them.

If Theory Y has been held up as an unachievable aim - where individual and organizational aspirations converge - there is a growing body of successful cases where progress towards this aim has been made. Organizations are attempting to achieve this alignment through continuous improvement, continuous professional development, and employee participation schemes operating in climates of empowerment.

It is possible to conclude that 'The Human Side of Enterprise' recognizes that we cannot actually motivate people, but we do have to acknowledge the opposing forces at play. What we can do is attempt to create the right climate, environment or working conditions for motivation to be enabled.

See Also