Douglas McGregor Presentation | Self-Improvement | Motivation

Douglas McGregor

Theory X and Theory Y

Facts about his life
• • Born in 1906, in Detroit, and died in 1964, in Massachusetts. His grandfather Thomas McGregor in about 1895 founded McGregor Institute to aid Great Lakes sailors and other transient labour. This Institute housed and fed more than 1000 men every year. In his youth he worked in his grandfather's institute for transient labourers in Detroit, where he gained insight into the problems faced by labour. He worked as a district manager for a retail gasoline merchandising firm to gather up family to start a family. In the course of this job, he learned the concepts of management. He was the first full time professor of Psychology at MIT University. In 1960, he wrote the book “The Human Side of Enterprise”, where he identifies and develops his renowned Theory X and Theory Y.

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His Theory
Theory Y and Theory X are theories of human motivation that have been used for human resource management, organizational behaviour and organizational development. They describe two very different attitudes toward workforce motivation, and are based upon Maslow's “hierarchy of needs”, in that he grouped the hierarchy into "lower order" (Theory X) needs and "higher order" (Theory Y) needs. He suggested that management could use either set of needs to motivate employees, but better results could be gained by the use of Theory Y, rather than Theory X.

Theory X
The role of management is to coerce and control employees: • People have an inherent dislike for work and will avoid it whenever possible. • People must be coerced, controlled, directed, or threatened with punishment in order to get them to achieve the organizational objectives. • People prefer to be directed, do not want responsibility, and have little or no ambition. • People seek security above all else.

Problems with Theory X
Drawing on Maslow's Needs Hierarchy, McGregor argues that a need, once satisfied, no longer motivates. Under Motivation Theory X, the firm relies on money and benefits to satisfy employees' lower needs (mentioned before), and once those needs are satisfied the source of motivation is lost. This is why McGregor makes the point that a command and control environment is not effective because it relies on lower needs as levers of motivation, but in modern society those needs already are satisfied and thus no longer motivate.

Theory Y
The role of management is to develop the potential in employees and help them to release that potential towards common goals: • Work is as natural as play and rest. • People will exercise self-direction if they are committed to the objectives (they are NOT lazy). • Commitment to objectives is a function of the rewards associated with their achievement. • People learn to accept and seek responsibility. • Creativity, ingenuity, and imagination are widely distributed among the population. People are capable of using these abilities to solve an organizational problem. • People have potential.

Business Implications of applying Theory Y
• • • • Decentralization and Delegation - If firms decentralize control and reduce the number of levels of management, managers will have more subordinates and consequently will be forced to delegate some responsibility and decision making to them. Job Enlargement - Broadening the scope of an employee's job adds variety and opportunities to satisfy ego needs. Participative Management - Consulting employees in the decision making process taps their creative capacity and provides them with some control over their work environment. Performance Appraisals - Having the employee set objectives and participate in the process of evaluating how well they were met.

Theory Z
Theory Z is the name applied to the so-called "Japanese Management" style popularized during the Asian economic boom of the 1980s. It contasts with theories X and Y because it focuses on increasing employee loyalty to the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job.

Several business and economics professors and theologists sustain that McGregor was in some way misinterpreted. They say that McGregor wrote his book (The Human Side of Enterprise”) with the objective of leading managers into investigating the two theories and into inventing new ones according to their situation or reality. Instead, his Theory Y was accepted as a new superior ethic- a set of moral values that ought to replace the values managers usually accept. Nevertheless, there is no doubt that McGregor’s work has had a tremendously beneficial impact on the way managing is looked at today.

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