McGregor’s Participation Model

Douglas McGregor (1906–64) was a professor of industrial management at

Massachusetts Institute of Technology (MIT) for the most part of his career. His
contribution to management thought lies in his proposal that a manager’s
assumptions about the role of employees determines his behaviour towards them.
According to him, the classical organization with its highly specialized jobs,
centralized decision-making and communication from top downwards through the
chain of command was not just a product of the need for productivity and efficiency,
but instead it was a reflection of certain basic managerial assumptions about human
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nature. These assumptions, that McGregor somewhat arbitrarily classified, were
designated as Theory X. Theory X identified the classical approach to management
based upon the ideas generated in the late 1800s and early 1900s, and was primarily
based upon the assumption about economic rationality of all employees. This
evolved around the classical assumption of Adam Smith that people are motivated
by economic incentives and they will rationally consider opportunities that provide
for them the greatest economic gain. To the classical thinkers, an efficiently designed
job, efficiency-centred organization and proper monetary incentives to workers
were the proper tools of motivation.
This approach was effective because it was a product of its times. In the
late nineteenth century and early twentieth century, technology change was relatively
slow and predictable, labour was abundant, competitors were known and
productivity was the main focus.
This approach was based on the following assumptions.
Theory X assumptions
1. Most people shirk work and evade it whenever feasible.
2. These people need to be directed, governed and be given punishment threats
in order to move them to do their job and achieve organizational goals.
3. An average person is lazy, shuns responsibility, prefers to be directed, has
little ambition and is only concerned with his own security.
4. Most people avoid leading and want to be led and supervised. They are
unwilling to accept responsibility.
McGregor believed that managers who hold theory X assumptions are likely to
treat workers accordingly. These managers practice an autocratic management
style and may use the threat of punishment to induce employee productivity. The
communication is primarily directed downwards and the environment is
characterized by minimal manager-employee interaction.
In contrast, theory Y emphasizes management through employee input and
delegation of authority. According to theory Y, managers make the following
assumptions.
Theory Y assumptions
1. Work is natural to most people and they enjoy the physical and mental
effort involved in working, similar to rest or play.
2. Commitment to goals and objectives of the organization is also a natural
state of behaviour for most individuals.
3. They will exercise self-direction and self-control in pursuit and achievement
of organizational goals.
4. Commitment to goals and objectives is a function of rewards available,
especially the rewards of appreciation and recognition.
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5. Most people have the capacity for innovation and creativity for solving
organizational problems.
6. Many individuals seek leadership roles in preference to the security of being
led.
Managers who hold theory Y assumptions treat their workers as responsible persons
and give them more latitude in performing their tasks. Communication is
multidimensional and managers interact frequently with employees. These managers
encourage innovation and creativity, minimize the use of supervision and controls
and redesign the work to make it more interesting and satisfying with regard to
higher level needs of workers such as self-esteem and self-actualization. They
integrate individual goals and organizational goals so that with commitment and
dedication, both goals are achieved at the same time.
Compared to theory X, theory Y has the greater potential to develop positive
job relationships and motivate employee performance. It must be understood,
however, that in some situations where workers do require close supervision and
greater controls, theory X assumptions are more effective in achieving organizational
goals.