Theory X and Theory Y

An Overview of McGregor’s Theory X and Theory Y

In his 1960 management book, The Human Side of Enterprise, Douglas McGregorOpens in new window proposed two motivational theories by which managers perceive employees’ motivation. McGregor’s work was based on Maslow’s hierarchy of needsOpens in new window.

He grouped Maslow’s hierarchy into “lower-order” (Theory X) needs and “higher-order” (Theory Y) needs. He suggested management could use either set of needs to motivate employees, but meeting the Theory Y needs could obtain better results. These opposing motivation theories are referred to as Theory X and Theory Y. Each theory assumes management’s role is to organize resources, including people, to the best benefit of the company. Beyond this common benefit, they are quite dissimilar.

McGregor’s Theory X and Theory Y are still featured in textbooks on management and organizational theories, as his work was an important step to theories that have developed since. Written in 1960, McGregor’s book is undoubtedly reflective of the times, yet captures a fundamental core issue of how people treat one another in the workplace. Although much has changed since 1960, many of the issues explored in Theory X and Theory Y, are still evident today in many organizations.

Theory X

Theory X assumes the average human being has an inherited dislike of work and will avoid it if they can.

In this theory, management assumes most employees to be inherently lazy, requiring them to be closely supervised with a comprehensive system of controls. A hierarchical structure is needed with a narrow span of control at each level. According to this theory, employees will show little ambition without an enticing incentive program and will avoid responsibility whenever they can.

Theory Y

Employees enjoy their mental and physical work activities, and desire to be imaginative and creative in their jobs if they are given a chance. There is an opportunity for greater productivity by giving employees the freedom to be their best.

Theory Y managers believe, given the right conditions, most people will want to do well at work and there is a pool of unused creativity in the workforce. The satisfaction of doing a good job is a strong motivation in and of itself.

Theory Y managers will try to remove the barriers that prevent workers from fully actualizing their potential. In contrast to Theory X managers, Theory Y managers tend to believe:

• Given the right conditions for employees, their application, and physical and mental health, work is as natural as rest or play. Work is play that offers satisfaction and meaning.
• If people feel committed, they will exercise self-direction and self-control in support of the organization’s objective(s).
• The accomplishment of these objectives will support the organization’s mission and provide intrinsic rewards associated with their achievements. Theory Y managers recognize the influence of learning. They believe if the right conditions are created, the average person learns to accept and seek responsibility.

• The capacity to exercise imagination, ingenuity, and creativity in the solution of organizational problems is distributed throughout the workforce.
• In modern organizations, the intellectual potential of the average person is only partially utilized. People are capable of handling much more complex problems, given the opportunity.

These assumptions are based on social science research, which observed the potential that is present in people that the organization must recognize in order for it to become more effective.

McGregor saw these two theories as quite separate attitudes. There are times when a manager must exercise authority, and in certain cases this is the only method of achieving those desired results, which happens in an emergency incident. Yet, using that same approach in managing a station, battalion, or the department would likely not be well received, and likely not be effective.