Theory X and Theory Y - American businessPost-World War II manager assumptions about subordinate workplace ethics and their affect on HUMAN RESOURCES management significantly changed in 1960 with management theorist Douglas McGregor’s Theory X and Theory Y propositions. Improving management techniques by understanding what motivates workers supports McGregor’s theories. Furthermore, his propositions were strongly influenced by Abraham MASLOW’S HIERARCHY OF NEEDS, a model demonstrating the motivational need for self-actuation leading to self-fulfillment. Maslow argued that worker dissatisfaction was not the fault of the worker but due to poor job design, inappropriate managerial techniques, and lack of self-fulfillment. McGregor’s Theory X and Theory Y are based on a set of assumptions that managers have about people’s attitude toward work and the value they place on it. These assumptions establish managerial practices and workplace environment guidelines and serve as the basis for personnel development and managerial policies, while directly affect business productivity. McGregor did not oppose authoritative managerial techniques or instructions (appropriate or necessary), but if these tools were ineffective, then alternate employee-oriented methodologies were needed. His theories indicated that managerial beliefs toward employee work ethics directly influence the development of human-resource MANAGEMENT policies and procedures. Organizational policies determined the motivational technique managers used to improve employee productivity. Theory X represents the traditional (authoritarian) management style using close supervision, direction, and control in directing employee behavior. Theory X managers make four assumptions about workers.
1. Workers dislike work.
2. Workers must be closely supervised.
3. Workers avoid responsibility.
4. Workers value job security and have very little ambition.
According to Theory X managers, the main motivator for workers is MONEY. With these assumptions, management felt they must force people to work through coercion and threats of punishment. Theory X organizations/managers use “soft” and “hard” approaches in controlling workers, such as rewards, incentives, close supervision, rules and regulations, and coercion. Soft approaches use rewards and incentives—i.e., more money for more work—whereas hard approaches use coercive and abusive language and other authoritarian methods in directing worker behavior. The saying “a day’s work for a day’s pay” supports the soft approach, and both methods have a wage-work relationship as a motivational factor. However, McGregor argued that extrinsic (external) motivational factors such as money are not necessarily as effective as the intrinsic (internal) motivational factor of self-actuation/self-fulfillment (realizing one’s own potential). He realized the need for a more humanistic management style—Theory Y. In Theory Y, the organizational relationship between managers and workers is based on participatory management. Theory Y enumerates four basic behavioral assumptions of employee work values.
1. If the work is satisfying, employees find work as natural as play.
2. When employees agree with organizational objectives, they use initiative, self-direction, and self-control.
3. Employees value creativity and being involved in the decision-making process.
4. If the work conditions allow, employees not only accept responsibility, they will seek it.
McGregor demonstrated that open-minded, progressive managers accept and use Theory Y principles for motivating employees and improving human-resource management techniques. Generally managers use Theory X with less motivational and managerial success than managers who use Theory Y. In conclusion, Theory X and Theory Y are two fundamental principles used in managing people at work. Based on employee work-ethic assumptions, the theories offer opposing behavioral factors in human-resource management and underpin an organization’s work environment, productivity, and ultimately its success. The traditional approach, Theory X, is often considered less desirable and less effective than Theory Y, because of its authoritative management style resulting from negative and inaccurate assumptions about employee work ethics. Money and job security are the main employee motivational factors assumed by Theory X managers. A more progressive, humanistic, and acceptable approach, Theory Y, presumes a more positive and participatory role toward employee motivation and development in an organization. Selffulfillment— ingenuity, creativity, and decision making— is the main motivational factor for employees holding Theory Y assumptions.
See also MOTIVATION THEORY.