Theory X and Theory Y

The eminent psychologist Douglas McGregor has given his theory of motivation called Theory X and Theory Y. He first presented his theory in a classic article titled 'The Human Side of Enterprise'. He treated traditional approach to management as 'Theory X' and the professional approach to management as 'Theory Y'. His theory refers to two sets of employees based on the perception of human nature. Here, theory X and theory Y are two sets of assumptions about the nature of Managers.

Theory X 

Theory X led managers to refuse to relinquish control over work and to use harsh methods of behavior management. Theory X managers would favor the hierarchical chain of command, motivation through punishment or reward and supervision within narrow and rigid parameters.

•      Employees are considered to be lazy by default and dislike work.
•      Employees must be coerced, threatened to work.
•      They must be directed or controlled in order to meet the objectives
•      They dislike additional responsibility
•      They seek security above all else.

 Theory Y 

In contrast to the notions in Theory X that made negative, resistant and lazy assumptions about managers’ beliefs about their subordinates in the workplace, McGregor developed a management view that was in most ways in direct opposition. Theory Y suggests a contrary view. Work is a natural human behaviour and it is something they want do, for the most part. Theory Y holds that humans are problem solvers, innovative and creative and are self-motivated by self-actualization needs much more than by punishments or rewards. Managers believe and trust their employees and the environment created is an ‘us and them’ relationship, instead of a Theory X ‘us versus them’ view, where collegiality is not only possible, but also encouraged.

•    Employees are self-motivated and tend to seek responsibility

•    Organisation is easy to steer towards strategic goals because of acceptance from employees

•    People are creative and have the imagination to come up with breakthrough innovations

•    Work is natural and is distributed easily

•    Managers tend to have liberal control due to natural growth

Theory Z:

Theory Z deals with the way in which workers are perceived by managers, as well as how managers are perceived by workers; is created and developed by William Ouchi. Theory Z offers the notion of a hybrid management style which is a combination of a strict American management style and a strict Japanese management style this theory speaks of Ringi System of Management. This decision-making system is the collective decision-making process and is highly decentralized. Only after the consensus is reached the decision is taken. If the decision is successful, then the one who has advocated it gets the credit but interesting part is that in the event of unsuccessful decision-making, top management takes the responsibility for the failure. Theory Z emphasizes things such as job rotation, broadening of skills, generalization versus specialization, and the need for continuous training of workers.

Theory Z assumes that workers tend to want to build co-operative and intimate working relationships with those that they work for and with, as well as the people that work for them. Also, Theory Z workers have a high need to be supported by the company, and highly value a working environment in which such things as family, cultures and traditions, and social institutions are regarded as equally important as the work itself. These types of workers have a very well developed sense of order, discipline, and moral obligation to work hard, and a sense of cohesion with their fellow workers. Finally, Theory Z workers, it is assumed, can be trusted to do their jobs to their utmost ability, so long as management can be trusted to support them and look out for their well being.

Comparison of Management Theory:

Conclusion:

No theory is bad or good. If we take into consideration of Maslow’s hierarchy of needs, then it can be said that at the bottom of the pyramid, money is the main motivator for work. Theory X managers exploit this human behavior characteristics to maximize organizational profit. It is predominately seen in labour intensive work like steel plants in India. However as we go up in the pyramid, self-actualization is the main motivator. Theory Y managers tries to maximize organizational growth to promote self-esteem, confidence, achievement, respect of others, and respect by others.