McGregor's Theory X and Theory Y

Douglas McGregor, strongly influenced by the human relations movement in general and Maslow's work in particular, developed his famous "Theory X and Theory Y" as a way of describing two basic (and conflicting) views of human behaviour:

• Theory X is the assumption that most people prefer to be directed, are not interested in assuming responsibility, have a high need for safety, and are primarily motivated by money, fringe benefits, and the threat of punishment.
• Theory Y assumes that most people are not, by nature, lazy and unreliable and postulates that people can be self-directive.

Assumptions About Human Nature That Underline McGregor’s Theory X and Theory Y:

Theory X

• Work is inherently distasteful to most people.
• Most people are not ambitious, have little desire for responsibility, and prefer to be directed.
• Most people have little capacity for creativity in solving organisational problems.
• Motivation occurs only at the physiological and safety needs.
• Most people must be closely controlled and often coerced to achieve organisational objectives.

Theory Y

• Work is as natural as play if the conditions are favourable.
• Self-control is often indispensable in achieving organisational goals.
• The capacity for creativity in solving organisational problems is widely distributed in the population.
• Motivation occurs at the social, esteem, and self-actualisation levels, as well as physiological and security levels.
• People can be self-directed and creative at work if properly motivated. 

Theory X is found most often in organisations with a classical structure. The job of a Theory X manager is to structure, control and closely supervise all employees. Drawing heavily on the work of Maslow, McGregor demonstrates that a Theory X organisation will fail to motivate those employees whose physiological and safety needs are already well met and whose social, esteem and self-actualisation needs are predominant. McGregor also points out that the bleak view of human nature presented in Theory X is not universally applicable.

The Manager’s Role

Theory Y managers arrange their organisational structures and systems so that people can achieve their own goals by directing their efforts toward organisational objectives. This can be done, for example, by helping employees recognise and develop their capacities for assuming responsibility by decentralisation, job enlargement, participation and consultative management techniques. Obviously, Theory Y postulates a highly democratic organisation.

Limitations

Although McGregor sets up Theory Y as an “answer” to the restrictive Theory X, Theory Y tends to ignore some basic flaws in human nature. For instance, while everyone has the potential to be mature and self-motivated, not everyone is mature and self-motivated. So, it is often necessary for managers to direct some employees according to Theory X until they develop more maturity.

The Theory X/Theory Y dichotomy is not unlike the “free school” versus
“back-to-basics school” conflict that is still raging in education. Few schools — or organisations in general — are 100% on one side of the
fence. Both points of view are useful in developing an effective
management style.

Summary

• Theory X and Theory Y describe two basic (and conflicting) views of human behaviour.
• Theory X is the assumption that most people prefer to be directed, are not interested in assuming responsibility, have a high need for safety and are primarily motivated by money, fringe benefits, and the threat of punishment.
• Theory Y assumes that most people are not by nature lazy and unreliable and postulates that people can be self-directive.
• Theory Y managers arrange their organisational structures so that people can achieve their own goals by directing their efforts toward organisational objectives.

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