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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 theiremployees 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 adeuate effort into the achievement of organisational

ob!ectives, 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 realneeds 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 $. They are :

• %ork is as natural as play or rest.

• &'ternal control and threat of punishment are not the only means of bringing about effort

towards organisational ob!ectives. (eople will e'ercise self"direction and self"control

towards the achievement of ob!ectives they are committed to.

• )ommitment to ob!ectives 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.

• *n most work organisations the abilities of most employees is only partially utilised.

McGregor advocated that the application of Theory +, would not only meet the needs of the

organisation but also those of the employee. He believed that Theory $ at best only met MaslowsDeficiency needs, whilst Theory + also met the Growth eeds. +ou would thus have more

motivated employees if you adopted Theory +.

Human Relations Contributors

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Douglas Mcregor

Theory X and Theory Y

Douglas McGregor in his book, -The Human ide of &nterprise- published in /012 has

e'amined theories on behavior of individuals at work, and he has formulated two models whichhe calls Theory $ and Theory +.

Theory X Assumptions

The average human being has an inherent dislike of work and will avoid it if he can.

• 3ecause 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 organi4ational principles today, and give rise both to

-tough- management with punishments and tight controls, and -soft- management whichaims at harmony at work.

• 3oth 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 $ managers do not give their staff this opportunity so that the employees behave

in the e'pected fashion.

Theory Y Assumptions

• The e'penditure of physical and mental effort in work is as natural as play or rest.

• )ontrol and punishment are not the only ways to make people work, man will direct

himself if he is committed to the aims of the organi4ation.

• *f a !ob is satisfying, then the result will be commitment to the organi4ation.

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

responsibility.

• *magination, creativity, and ingenuity can be used to solve work problems by a large

number of employees.

• 5nder the conditions of modern industrial life, the intellectual potentialities of the

average man are only partially utili4ed.

Comments on Theory X and Theory Y Assumptions

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These assumptions are based on social science research which has been carried out, and

demonstrate the potential which is present in man and which organi4ations should recogni4e in

order to become more effective.

McGregor sees these two theories as two uite separate attitudes. Theory + is difficult to put into

 practice on the shop floor in large mass production operations, but it can be used initially in themanaging of managers and professionals.

*n -The Human ide of &nterprise- McGregor shows how Theory + affects the management of promotions and salaries and the development of effective managers. McGregor also sees Theory

+ as conducive to participative problem solving.

*t is part of the manager6s !ob to e'ercise 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 aredesirable.

However, in situations where it is possible to obtain commitment to ob!ectives, it is better toe'plain the matter fully so that employees grasp the purpose of an action. They will then e'ert

self"direction and control to do better work " uite possibly by better methods " than if they hadsimply 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 work7 where the work is sufficiently responsible

to allow for fle'ibility and where the employee can see her or his own position in themanagement hierarchy. *f 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.

8nce management becomes persuaded that it is under estimating the potential of its humanresources, and accepts the knowledge given by social science researchers and displayed in

Theory + assumptions, then it can invest time, money and effort in developing improved

applications of the theory.

McGregor reali4es that some of the theories he has put forward are unreali4able in practice, but

wants managers to put into operation the basic assumption that:

• taff will contribute more to the organi4ation if they are treated as responsible and valued

employees.

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douglas mcgregor - theory x y

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

Ouchi's Theory Z

Douglas McGregor, an 9merican social psychologist, proposed his famous $"+ theory in his/012 book 6The Human ide 8f &nterprise6. Theory ' and theory y are still referred to commonly

in the field of management and motivation, and whilst more recent studies have uestioned the

rigidity of the model, Mcgregor6s $"+ Theory remains a valid basic principle from which todevelop positive management style and techniues. McGregor6s $+ Theory remains central to

organi4ational development, and to improving organi4ational culture.

McGregor6s $"+ 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.

McGregor6s ideas suggest that there are two fundamental approaches to managing people. Many

managers tend towards theory ', and generally get poor results. &nlightened managers use theoryy, which produces better performance and results, and allows people to grow and develop.

McGregor6s ideas significantly relate to modern understanding of the (sychological )ontract,which provides many ways to appreciate the unhelpful nature of $"Theory leadership, and the

useful constructive beneficial nature of +"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 worktowards organisational objectives.

•  The average person prefers to be directed; to avoid responsibility; isrelatively unambitious, and wants security above all else.

theory y '"artici"ati#e management' style!• Eort in work is as natural as work and play.• eople will apply self!control and self!direction in the pursuit of organisational

objectives, without e"ternal control or the threat of punishment.

• #ommitment to objectives is a function of rewards associated with their

achievement.

• eople usually accept and often seek responsibility.

•  The capacity to use a high degree of imagination, ingenuity and creativity insolving organisational problems is widely, not narrowly, distributed in thepopulation.

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• $n industry the intellectual potential of the average person is only partlyutilised.

tools $or teaching, understanding and e#aluating xy theory$actors

The $+ Theory diagram and measurement tool below pdf and doc versions; are adaptations of

McGregor6s ideas for modern organi4ations, management and work. They were not created by

McGregor. * developed them to help understanding and application of McGregor6s $+ Theory

concept. The test is a simple reflective tool, not a scientifically validated instrument7 it6s alearning aid and broad indicator. (lease use it as such.

free $+ Theory diagram pdf;

free $+ Theory diagram doc version;

free $+ Theory test tool " personal and organi4ational " pdf;

free $+ Theory test tool " personal and organi4ational " doc version;

same free $+ Theory test tool " two"page version with clearer layout and scoring " pdf;

same free $+ Theory test tool " two"page version with clearer layout and scoring " doc version;

 

characteristics o$ the x theory manager

(erhaps the most noticeable aspects of McGregor6s $+ Theory " and the easiest to illustrate " arefound in the behaviours of autocratic managers and organi4ations which use autocratic

management styles.

%hat are the characteristics of a Theory $ manager< Typically some, most or all of these:

• results!driven and deadline!driven, to the e"clusion of everything else• intolerant

• issues deadlines and ultimatums

• distant and detached

• aloof and arrogant

• elitist

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• 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 sta 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 e"penditure to the point of false economy

• seeks culprits for failures or shortfalls

• seeks to apportion blame instead of focusing on learning from the e"perienceand 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 futureimprovements

• unhappy

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ho% to manage u"%ards - managing your X theory boss

%orking for an $ theory boss isn6t easy " some e'treme $ theory managers make e'tremelyunpleasant managers, but there are ways of managing these people upwards. 9voiding

confrontation unless you are genuinely being bullied, which is a different matter; and delivering

results are the key tactics.

•  Theory % managers &or indeed theory ' managers displaying theory %behaviour( are primarily results oriented ! so orientate your your owndiscussions and dealings with them around results ! ie what you can deliverand when.

•  Theory % managers are facts and )gures 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 % managers generally don*t understand or have an interest in thehuman issues, so don*t try to appeal to their sense of humanity or morality.

+et your own objectives to meet their organisational aims and agree thesewith the managers; be seen to be self!starting, self!motivating, self!disciplined and well!organised ! the more the % theory manager sees you aremanaging yourself and producing results, the less they*ll feel the need to doit for you.

• lways deliver your commitments and promises. $f you are given anunrealistic task and/or deadline state the reasons why it*s not realistic, but bevery sure of your ground, don*t be negative; be constructive as to how theoverall aim can be achieved in a way that you know you can deliver.

• +tand up for yourself, but constructively ! avoid confrontation. -ever threaten

or go over their heads if you are dissatis)ed or you*ll be in big troubleafterwards and life will be a lot more dicult.

• $f an % theory boss tells you how to do things in ways that are notcomfortable or right for you, then don*t uestioning the process, simplycon)rm the end!result that is reuired, and check that it*s okay to *streamlinethe process* or *get things done more eciently* if the chance arises ! they*llnormally agree to this, which eectively gives you control over the *how*,provided you deliver the *what* and *when*.

9nd this is really the essence of managing upwards $ theory managers " focus and get agreementon the results and deadlines " if you consistently deliver, you6ll increasingly be given more

leeway on how you go about the tasks, which amounts to more freedom. 3e aware also thatmany $ theory managers are forced to be $ theory by the short"term demands of the

organisation and their own superiors " an $ theory manager is usually someone with their own problems, so try not to give them any more.

Theory X and Theory Y 

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*n his /012 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. 3oth of these theories begin with the premise that management6s roleis to assemble the factors of production, including people, for the economic benefit of the firm.

3eyond this point, the two theories of management diverge.

Theory X 

Theory $ assumes that the average person:

• Dislikes work and attempts to avoid it.

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

• *s self"centered and therefore does not care about organi4ational goals.

• =esists change.

• *s gullible and not particularly intelligent.

&ssentially, Theory $ assumes that people work only for money and security.

 Theory % ! The 0ard pproach and +oft pproach

5nder Theory $, 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 e'tremes is optimal. The hard approach results in hostility, purposely

low"output, and hard"line union demands. The soft approach results in ever"increasing reuests

for more rewards in e'change for ever"decreasing work output.

The optimal management approach under Theory $ probably would be somewhere betweenthese e'tremes. However, McGregor asserts that neither approach is appropriate because the

assumptions of Theory $ are not correct.

 The roblem with Theory %

Drawing on Maslow6s hierarchy, McGregor argues that a satisfied need no longer motivates.

5nder Theory $ the firm relies on money and benefits to satisfy employees6 lower needs, and

once those needs are satisfied the source of motivation is lost. Theory $ management styles in

fact hinder the satisfaction of higher"level needs. )onseuently, the only way that employees canattempt to satisfy their higher level needs in their work is by seeking more compensation, so it is

uite predictable that they will focus on monetary rewards. %hile money may not be the most

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effective way to self"fulfillment, in a Theory $ environment it may be the only way. 5nder

Theory $, people use work to satisfy their lower needs, and seek to satisfy their higher needs in

their leisure time. 3ut 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 itrelies on lower needs as levers of motivation, but in modern society those needs already are

satisfied and thus no longer are motivators. *n this situation, one would e'pect employees todislike their work, avoid responsibility, have no interest in organi4ational goals, resist change,

etc., thus making Theory $ a self"fulfilling prophecy. >rom this reasoning, McGregor proposed

an alternative: Theory +.

Theory Y 

The higher"level needs of esteem and self"actuali4ation are continuing needs in that they are

never completely satisfied. 9s such, it is these higher"level needs through which employees can

 best be motivated.

Theory + makes the following general assumptions:

• %ork can be as natural as play and rest.

• (eople will be self"directed to meet their work ob!ectives if they are committed to them.

• (eople will be committed to their ob!ectives if rewards are in place that address higher

needs such as self"fulfillment.

• 5nder these conditions, people will seek responsibility.

• Most people can handle responsibility because creativity and ingenuity are common in

the population.

5nder these assumptions, there is an opportunity to align personal goals with organi4ational

goals by using the employee6s own uest for fulfillment as the motivator. McGregor stressed thatTheory + management does not imply a soft approach.

McGregor recogni4ed that some people may not have reached the level of maturity assumed by

Theory + and therefore may need tighter controls that can be rela'ed as the employee develops.

 Theory ' 1anagement $mplications

*f Theory + holds, the firm can do many things to harness the motivational energy of its

employees:

• Decentrali4ation and Delegation " *f firms decentrali4e control and reduce the number of

levels of management, each manager will have more subordinates and conseuently will be forced to delegate some responsibility and decision making to them.

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• ?ob &nlargement " 3roadening the scope of an employee6s !ob adds variety and

opportunities to satisfy ego needs.

• (articipative Management " )onsulting employees in the decision making process taps

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

• (erformance 9ppraisals " Having the employee set ob!ectives and participate in the

 process of evaluating how well they were met.

*f 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 !obs.

Transcri"t

• 2. 131T 452 6rgani7ational 8ehavior $nstructor9 sst. rof. :r. :oan<nlucan 1c3regor Theories % and Theory ' +tudent9

• =. $ntroduct>on Theory % and Theory ' are theories of humanϖ motivation

created and developed by :ouglas 1c3regor at the 1$T +loan +chool of1anagement in the 2?@A. They describe two contrasting models ofworkforceϖ motivation. Theory % and Theory ' have to do with the

perceptionsϖ managers hold on their employees, not the way they generallybehave. $t is attitude not attributes.

• B. 0is work is based upon 1aslow*s 0ierarchy of ϖ -eeds, where he groupedthe hierarchy into lower!order needs &Theory %( and higher!order needs&Theory '(. 0e suggested that management could use either set of ϖ needs tomotivate employees, but better results would be gained by the use of Theory

 ', rather than Theory %. These two views theori7ed how people view humanϖ behavior at work and organi7ational life.

• C. <nderstanding the Theories 6ur management style is strongly inDuenced

by our beliefsϖ and assumptions about what motivates members of yourteam9 $f you believe that team members dislike work, you will have anauthoritarian style of management; 6n the other hand, if you assume thatemployees take pride in doing a good job, you will tend to adopt a moreparticipation style.

• 4. Theory %

• @. Theory % ! Theory % assumes that employees are naturally unmotivatedand dislike working, and this encourages an authoritarian style of

management. ccording to this view, management must actively intervene toget things done. This style of management assumes that workers9 :islikeworking.ϖ  void responsibility and need to be directed.ϖ  0ave to be

controlled, forced, and threatened to deliver what*s needed.ϖ  -eed to be

supervised at every step, with controls put in place.ϖ  -eed to be enticed to

produce results; otherwise they have no ambition orϖ motivation to work.

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• 5. Theory % #ontinued %!Type organi7ations tend to be top heavy, with

managersϖ and supervisors reuired at every step to control workers. Thereis little delegation of authority and control remains centrali7ed. 1c3regorrecogni7ed that %!Type workers are in factϖ usually the minority, and yet inlarge scale production environment, % Theory management may be reuiredand can be unavoidable.

• . Theory '

• ?. Theory ' Theory ' shows a participation style of management that is de!ϖ centrali7ed. $t assumes that employees are happy to work, are self!motivatedϖ and creative, and enjoy working with greater responsibility. Take

responsibility and are motivated to ful)ll the goals they areϖ given. +eek and

accept responsibility and do not need much direction.ϖ  #onsider work as a

natural part of life and solve work problemsϖ imaginatively.

• 2A. Theory ' #ontinued This management style tends to be more widely

appropriate. $nϖ

 '!Type organi7ations, people at lower levels of theorgani7ation are involved in decision making and have more responsibility. Theory % and Theory ' relate to 1aslow*s hierarchy of needs inϖ how humanbehavior and motivation are main priorities in the workplace in order toma"imi7e output. $n relation to Theory ', the organi7ation is trying to createthe most symbiotic relationship between the managers and workers, whichrelates to 1aslow*s needs for self!actuali7ation and Esteem. For self!actuali7ation issues relate to Esteem when the managerϖ is trying to promoteeach team member*s selfesteem, con)dence, achievement, happiness,respect of others, and respect by others.

• 22. #omparing Theory % and Theory '

• 2=. #omparing Theory % and Theory ' 1otivationϖ Theory % assumes thatpeople dislike work; they want to avoid it and do not want to takeresponsibility. Theory ' assumes that people are self!motivated, and thrive onresponsibility. 1anagement +tyle and #ontrolϖ $n a Theory % organi7ation,management is authoritarian, and centrali7ed control is retained, while in

 Theory ', the management style involves employees in decision making, butretains power to implement decisions.

• 2B. Gork 6rgani7ationϖ Theory % employees tend to have speciali7ed andoften repetitive work. $n Theory ', the work tends to be organi7ed aroundwider areas of skill or knowledge; Employees are also encouraged to develop

e"pertise and make suggestions and improvements. Hewardsϖ Theory %organi7ations work on a Icarrot and stickJ basis, and performance is part ofthe overall mechanisms of control. $n Theory ' organi7ations, appreciation isalso regular and important, but is usually a separate mechanism fromorgani7ational controls. Theory ' organi7ations also give employees freuentopportunities for promotion. ccepting creative and innovative ideas providedby employees.

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• 2C. pplication lthough Theory % management style is widelyϖ accepted aspoor to others, but somehow, it has its place of bene)cial in large scaleproduction operation and unskilled production!line work. Theory '!stylemanagement is suited to knowledgeϖ work and professional services.rofessional service organi7ations naturally evolve Theory '!type practices bythe nature of their work; Even highly structure knowledge work, such as callcenter operations, can bene)t from Theory ' principles to encourageknowledge sharing and continuous improvement.

• 24. #onclusion <nderstanding your assumptions about employeesϖ motivation can help you learn to manage more eectively. Thank 'ou forKisteningLϖ 

Theory X and Theory Y & Theories o$ em"loyee Moti#ation

!ummary

Theory $ and Theory + pertain to employee motivation and have been used in human resourcemanagement, organi4ational behavior analysis, and organi4ational development. &mp$track  @ an

*ntegrated Human )apital and Talent Management Tool is based on such theories and helps

organi4ations to transform their human resource practices.

Theory X and Theory Y Theories o# employee Moti$ation

Theory $ and Theory +, created and developed by Douglas McGregor at the M*T loan chool

of Management in the /012s, pertain to employee motivation and have been used in human

resource management, organi4ational behavior analysis, and organi4ational development. Theydescribe two very different attitudes towards workforce motivation. McGregor felt that

companies followed either one of these approaches.

Description o# Theory X

*n this theory management assumes employees are inherently la4y and will avoid work if theycan. 3ecause of this, workers need to be closely supervised and comprehensive systems of

control put in place. 9 hierarchical structure is needed, with narrow span of control at each level,

for effective management. 9ccording to this theory employees will show little ambition withoutan enticing incentive program and will avoid responsibility whenever they can.

The managers influenced by Theory $ believe that everything must end in blaming someone.

They think most employees are only out for themselves and their sole interest in the !ob is to earn

money. They tend to blame employees in most situations, without uestioning the systems,

 policy, or lack of training which could be the real cause of failures.

Managers that subscribe to Theory $ tend to take a rather pessimistic view of their employees. 9

Theory $ manager believes that it is the managerAs !ob to structure the work and energi4e the

employee. The result of this line of thought is that Theory $ managers naturally adopt a moreauthoritarian style based on the threat of punishment. )ritics believe that a Theory $ manager

could be an impediment to employee morale B productivity.

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Description o# Theory Y

Management influenced by this theory assumes that employees are ambitious, self"motivated,

an'ious to accept greater responsibility and e'ercise self"control, self"direction, autonomy andempowerment. Management believes that employees en!oy 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 performto the best of their abilities, without being bogged down by rules.

9 Theory + 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 !ob is a strong motivation in itself. 9 Theory + manager will try toremove the barriers that prevent workers from fully actuali4ing themselves.

Many people interpret Theory + as a positive set of assumptions about workers. 9 close reading

of The Human ide of &nterprise 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 $ and + seem to represent unrealistic e'tremes. Most employeesincluding managers; fall somewhere in between these poles. =ecent studies have uestioned the

rigidity of the model, yet McGregorAs $"+ Theories remain guiding principles to the

management to evolve processes which help in organi4ational development. 9 mi' of practiceswhich ensure a healthy blend of systems and the freedom to perform at the work place is likely to

motivate the employees more. This mi' of practices calls for induction of technology into H=.

How we can practice Talent Management in all types of organi4ations will indicate how well we

have understood B deployed these theories $ and + in our real time environment.

TH%&RY X A'D Y

D85GC9 McG=&G8=

*ntroduction

Douglas McGregor suggested that organisations manage employees based on their view of whatemployees are like. This view of employees is usually somewhere between one of two e'tremes.

McGregor called these e'tremes theory $ and theory +.

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Theory $

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

• 9re la4y and work out of need, not choice

• =esist change

• Do not like responsibility and prefer work instructions

• 9re not motivated by work alone, they need pay incentives or threats

=euire control and punitive measures to prevent misconduct

• 9re not loyal and do not care about their employer

9 manager with a theory $ view will therefore attempt to coerce employees into work throughcontrol and punishment.

 

Theory +

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

• 9re motivated and will work hard under the right conditions

• Cearn to like responsibility and can handle responsibility

• (refer rewards over punitive measures

• 9re loyal and care about their employer if their work is appreciated

• 9re open to change

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9 manager with a theory + view of employees is likely to attempt to motivate employees through

a culture of reward and recognition.

ummary

McGregor believed that the features of each view theory $ or theory +; have a place in theworkplace. The type of work will determine which theory will work best for the organisation. He

carried out e'periments to find out which theory would suit each organisational type.