Theory X and Theory Y

Henry comes to work regularly on time and his performance has been consistent. One of his colleagues, Riya, believes that he is a diligent worker and gains satisfaction through working hard. Another colleague, Joseph, sees him as a worker who performs just for the sake of money. Do you agree with Riya or Joseph? This judgement could say a lot about your style of management.

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Douglas McGregor introduced Theory X and Theory Y to explain different styles of management. Theory X refers to an authoritarian style and Theory Y refers to a participative/interactive style of managing employees.

If you agree with Joseph, you will likely agree with Theory X, which refers to a more authoritarian style of managing. People under Theory X believe that employees see their work as a burden and are lazy, so they tend to micromanage and control their performance and efforts.

If you agree with Riya, you will likely agree with Theory Y, which refers to a more participative style of managing. People under Theory Y believe.

About The Theorist

Douglas McGregor was a management professor at Massachusetts IT university, Cambridge in the 1950s, and published a few articles and books as well. He was one of the most impactful, popular writers in the management field and is credited for modern management thinking. He wrote on leadership as well. He mentioned Theory X and Theory Y in his book, The Human Side of Enterprise, published in 1960.

Theory X

It refers to the management style that believes in authoritarian and controlling behavior. It follows the traditional route of direction and control. Managers following Theory X can be pessimistic and orthodox in their approach and be prone to assume that employees are not interested in their work and need to be pushed. Several assumptions form the basis for this theory.

A manager who believes in Theory X could have assumptions that:

• The employee dislikes working, is not motivated enough and thus avoids working, whenever there is an opportunity.
• The employee is not responsible and hence must be supervised or directed towards the goal of the organization.
• Since the employee is not responsible to work willingly, he or she must be motivated with the rewards and incentives, prompted, punished, coerced or forced into working.
• The employee must be supervised or looked upon so that he or she works appropriately.
• They lack ambition and physiological and safety factors motivate them. The worker is assumed to be immature and viewed as being very gullible. This is a negative view of the nature of workers.

Traits Of A Manager Following Theory X

• The manager would use promotions, incentives, the threat of firing or cutting off pay to motivate employees to put effort or work.
• He would hierarchically arrange the job roles with several supervisors for different departments, looking over employees.
• He would try to constantly control the employees, leading to resentment and exhaustion in the employees, leading to a turnover.
• This approach is usually taken by managers working in older companies and firms. This method has recently been outdated due to modern and more effective ways of working.
• Theory X is related to an authoritarian style of management.
• Intervention of the management is considered to be important to deal with passive, resistant workers. Decision making became centralized and control was established through a chain of command where workers were not being provided an opportunity to contribute to the process.

Criticisms Of Theory X

McGregor termed these assumptions as Theory X assumptions of human nature. He believed that workers who were continuously being treated as robots with no thinking ability, at one point eventually start behaving like robots.

The control and coercion involved in this style of management could lead to employee frustration, de-motivate employees and damage relationships within the organization.

This could lead to more turnover and absenteeism. This could additionally lead to a bad reputation. A lot of control and supervision could lead to resentment and will not help in facilitating innovative or creative ideas.

Applications Of Theory X

Theory X, although outdated, is still used in larger firms, wherein a higher number of people are employed and deadlines are to be met. It is also used in unskilled labor organizations or production firms.

This theory is likely to be used when there are new employees, who need direction and accountability. A crisis could also demand more control and thus, this theory can come in handy.

This theory is also likely to be used when the work in the organization is repetitive and employees are likely to get bored and need some control.

Theory Y

It refers to the management style that follows a more participative, interactive and optimistic approach. It includes a trusting, collaborative and positive relationship between the manager and employees.

Managers following Theory Y believe that employees are willing to work and put effort into their performances. Several assumptions form the basis for this theory.

Theory Y is also known as contingency theory because it allows for flexibility in the work environment. It follows the idea that there is no single way to organize a company or make decisions. There are several ways to lead an organization and this theory allows fluidity.

A manager who believes in Theory Y could have assumptions that:

• The employees do not dislike work and it can be a source of satisfaction or joy for them.
• The employees could prefer responsibility and show willingness, depending on their traits. They are not inherently irresponsible or lazy.
• The employees could find their work fulfilling as well as challenging.
• They can be motivated internally to complete their tasks and not always need supervision or micromanaging.
• They do not always need coercion, incentives or force to complete their work. They can use self-direction and self-control in this aspect.
• They can have creativity, innovation and potential skills that they can use to solve problems or to perform effectively.
• The worker here is considered to be mature. This is a positive view of the nature of workers.

Traits Of A Manager Following Theory Y

• The manager provides incentives and appraisals, but they are given as acknowledgement and appreciation of the employees’ performances, and not to control them.
• The manager allows for collaborative decision-making and amicable relations within the organization or firm.
• Managers in newer organizations use this theory as now, people want more than monetary rewards and control.
• Theory Y put forward the idea that management by objectives and involving workers in the decision-making process would lead to the creation of a satisfied and more productive workforce.
• Theory Y showed that by adapting leadership styles, the needs of various individuals could be met.
• An individual who was self- motivated was best left alone in a laissez-faire style of leadership, while those who needed control could have an autocratic leader to guide them and those who require support would benefit best from a democratic leadership style.

Criticisms Of Theory Y

Too much freedom could lead to no accountability and people could lose direction and focus. Some employees may take advantage of this freedom and not meet their work objectives. This theory has also been criticized for being too idealistic and unachievable by some critics.

Applications Of Theory Y

Many startups and new organizations use Theory Y by using flexible deadlines and less controlling supervisors. A lot of young entrepreneurs do not keep hierarchical within their company and believe in the willingness and interest of their employees. A manager dealing with a group of experts would likely use this theory and give them freedom and space to work.

Conclusion

Both theories are mostly used as a mixture in organizations and workplaces. Managers may prefer one theory over the other; it depends on individual trait differences. Some people prefer micromanaging and leading, and some people prefer giving space. Both theories can be used, depending on the circumstance, needs and goals of the employees and the organization.

In actual practice, most managers today practice a combination of Theory X and Theory Y styles of management. Very few practice either being autocratic or democratic completely.

Comparison Between McGregor And Maslow

Abraham Maslow and McGregor both gave popular theories on motivation. McGregor and Maslow respected each other and used each other’s theories in their work. McGregor created Theory X based on Maslow’s lower needs on the hierarchy of needs model (food, water, necessities).

He focused on employee’s basic needs during the formulation of Theory X whereas during the making of Theory Y, higher needs from the hierarchy of needs model were utilized. Self-actualization and creativity were given importance in Theory Y.

Comparison Between Theory X And Theory Y

S. No.	Theory X	Theory Y
1.	The authoritative style of managing.	Interactive, participative style of managing.
2.	Here, managers see employees as lazy and not proactive towards their work.	Here, managers see employees as responsible and proactive.
3.	Managers tend to micromanage and control employee’s performance and efforts.	Managers give employees some free space and flexibility to work.
4.	Employees are given rewards and incentives, prompted, punished, coerced or forced into working.	Managers let employees use self-direction and self-control to do their jobs instead of coercing or forcing them.

In modern days and times, Theory Y works more effectively. People need more than monetary rewards or the threat of punishment to do their jobs. They need an interactive and safe environment with opportunities for growth, learning and creativity.

Theory X works on the belief that employees are lazy and need to be micromanaged. Micromanagement is not looked at positively in today’s scenario, leading to Theory Y being the most productive way of management.

It would be beneficial to use both theories in moderation to ensure productivity and discipline in an organization. Accountability from employees is needed (Theory X) and flexibility and creativity is needed as well (Theory Y). Hence, both theories used in moderation are key to good organization.