McGregor's Theory X and Theory Y

Source: www.iwer.mit.edu

Origin Of Theory

Back in the 1950s, a social psychologist called Douglas McGregor who put forward his thoughts in the classical book called “the Human side of Enterprise” parallel to leading management theories like Ed Schein and Kurt Lewins (Birkinshaw and Mark, 2015). In that period companies treated their employees as cogs in the machinery, McGregor presented a different set of assumptions about a different perspective of human motivation (Jensen, 2014).

The essence of “bad old way of working” labelled as “scientific management” in the 1920s (Birkinshaw and Mark, 2015). These types of people are lazy, not interested to work, not willing to assume responsibilities, but want to have job security. And they are motivated for money, fringe perks and the threat of punishment (Birkinshaw and Mark, 2015). These set of employees correspond the Theory X. Theory Y shows an alternative of Theory X which is people willing to work extensively and to do a good job, to develop their career and to work in a stimulating environment is most important than monetary rewards (Birkinshaw and Mark, 2015).

 Dive into X and Y Theories

Theory X: Traditional way of control and direction

·         Inherited with avoiding work if it is possible (Adair, 2011).

·         People are to be coerced, controlled and feared  of punishment to achieve the organizational objects (Adair, 2011).

·         Most people prefer being directed, trying to avoid responsibilities, lacking of ambitions and wanting their job security (Bates and McGrath, 2013).

·         People are not innovative or not creative, and they just focus on assigned work (Adair, 2011).

·         Tight control by closed supervision, demands strict adherence to rules and threats of punishment (Adair, 2011).

·         Naturally demotivated and motivated by fear (Bates and McGrath, 2013).

·         Heavily rely on incentives, overtime allowances and work for money (Adair, 2011).

·         Resistance to organizational changes (Adair, 2011).

 

Theory Y : The wining way of personal and organizational goals

·         People are matured on the work pattern which is self-directed and self-controlled in their committed objectives (Adair, 2011).

·         Efforts in assigned work are natural as physically and mentally (Bates and McGrath, 2013).

·         People are always learning to develop their state while being innovative and creative when the opportunity is given in organizational problems (Adair, 2011).

·         Actively seeking more work and responsibilities.

·         Commitment to work is a part of their achievements (Bates and McGrath, 2013).

·         Naturally motivated and showing ambition towards the organizational needs (Bates and McGrath, 2013).

·         Adoptive to the organizational changes (Adair, 2011).

 

Summary of Theory X and Y

Table:1.0 - The many differences between Theory X and Theory Y are summarized 

(Hersey and Blanchard, 1977)

 

How to Use Theory X and Y

In an organization level, Theory X and Y stress a lot of decisions on a company to put forward on how the work gets done by their employees (Bates and McGrath, 2013). For example, if a company uses Theory X which strict on command and control style of working, then people are forced to work in a target driven narrowed scope and get paid on a specific job they have done (Bates and McGrath, 2013). Also, the Theory X organizations must focus on a structure where incentive systems in place (Birkinshaw and Mark, 2015). So if the staff is empowered, participate in decision making, be matured and self-motivated then the company can move towards Theory Y (Jensen, 2014). Where Theory Y promote cooperation, reward and healthy working relationships, there can be people who think this approach as a weakness and try to get the advantage of it (Bates and McGrath, 2013).

However, in modern work environments, there will be a blend of Theory X and Y both (Birkinshaw and Mark, 2015). Because the company’s recruitment and selection process must be very stronger to identify Theory X and Y people specifically (Jensen, 2014).  That’s why modern techniques like psychometric testing and lengthy interview processes introduced (Palmer, 2007). So sometimes it is hard for modern managers to embrace Theory Y and reject the Theory X in their teams (Bates and McGrath, 2013). The approach should be between two extremes of X and Y (Bates and McGrath, 2013). So, teammates who are in between are motivated by opportunities to work with the rest of teammates and gain respect around them (Bates and McGrath, 2013).  So clear out the confusions between Theory X and Y people management, it is import to set the clear limits on procedures, deadlines and set the expectation of total compliance (Adair, 2011). Also, making clear when the failures will enforce the rules and punishments (Adair, 2011).

Finally, the McGregor theory helps to understand people and how to manage them (Birkinshaw and Mark, 2015). It also supports to design more productive jobs and develops compensation and incentive systems to get the best from the employees (Birkinshaw and Mark, 2015).

 

Conclusion

In the Sri Lankan context, the Theory X and Y people exist in both government and private sectors. As an example, most of the government servants are placed into Theory X where they are working on directions, their scope is narrowed and motivated only on their salary. The manufacture factories, garments factories, call centers, and fast-food restaurants are operated on Theory X model where the professional service companies, R&D institutes and startup companies are functioned on Theory Y.

According to the unpublished surveys and internal sources, the software and technology development companies like Pearson operates on Theory Y model where the business need self-motivated people who think out of the box and more innovative. The company always focus to maintain healthy levels on hygiene factors like company policies, supervision, interpersonal relations, salary, status, job security personal life and working conditions. And the Theory Y model nurtures that culture. Also, the company encourage the people to have more contact and relationship with each other to achieve associated social, esteem and self-actualization goals by making open office environment which does not have any cubicles, even not for general manager. That also supports the positive aspect of Theory Y. So Theory Y highly benefitted Pearson to execute its business model with more profits and productivity.

 

Reference

Adair, J., 2011. John adair's 100 greatest ideas for effective leadership. 1st ed. Minnesota, United States: Capstone.

Bates, B. and McGrath, J., 2013. The little book of big management theories. 1st ed. London, United Kingdom: Pearson.

Birkinshaw, J. and Mark, K., 2015. Key MBA models. 1st ed. New Jersey, United States: FT Publishing International.

Hersey, P. and Blanchard, K., 1977. Management of organizational behavior. 1st ed. New Jersey, United States: Prentice-Hall.

Jensen, R., 2014. Improving software development productivity: effective leadership and quantitative methods in software management. 1st ed. New Jersey, United States: Prentice-Hall.

McGregor, D., 1960. The human side of enterprise. 1st ed. New York, United States: McGraw-Hill.

Palmer, S., 2007. People and self management. 1st ed. London, United Kingdom: Routledge.