Theory X and Theory Y

In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two aspects of
human behavior at work, or in other words, two different views of individuals (employees): one
of which is negative, called as Theory X and the other is positive, so called as Theory Y.
According to McGregor, the perception of managers on the nature of individuals is based on
various assumptions.

Assumptions of Theory X
 An average employee intrinsically does not like work and tries to escape it whenever
possible.
 Since the employee does not want to work, he must be persuaded, compelled, or warned
with punishment so as to achieve organizational goals. A close supervision is required on
part of managers. The managers adopt a more dictatorial style.
 Many employees rank job security on top, and they have little or no aspiration/ ambition.
 Employees generally dislike responsibilities.
 Employees resist change.
 An average employee needs formal direction.

Assumptions of Theory Y
 Employees can perceive their job as relaxing and normal. They exercise their physical
and mental efforts in an inherent manner in their jobs.
 Employees may not require only threat, external control and coercion to work, but they
can use self-direction and self-control if they are dedicated and sincere to achieve the
organizational objectives.
 If the job is rewarding and satisfying, then it will result in employees’ loyalty and
commitment to organization.
  An average employee can learn to admit and recognize the responsibility. In fact, he can
even learn to obtain responsibility.
 The employees have skills and capabilities. Their logical capabilities should be fully
utilized. In other words, the creativity, resourcefulness and innovative potentiality of the
employees can be utilized to solve organizational problems.

Thus, we can say that Theory X presents a pessimistic view of employees’ nature and behavior at
work, while Theory Y presents an optimistic view of the employees’ nature and behavior at
work. If correlate it with Maslow’s theory, we can say that Theory X is based on the assumption
that the employees emphasize on the physiological needs and the safety needs; while Theory X is
based on the assumption that the social needs, esteem needs and the self-actualization needs
dominate the employees.

McGregor views Theory Y to be more valid and reasonable than Theory X. Thus, he encouraged
cordial team relations, responsible and stimulating jobs, and participation of all in decision-
making process.

Implications of Theory X and Theory Y

Quite a few organizations use Theory X today. Theory X encourages use of tight control and
supervision. It implies that employees are reluctant to organizational changes. Thus, it does not
encourage innovation.
Many organizations are using Theory Y techniques. Theory Y implies that the managers should
create and encourage a work environment which provides opportunities to employees to take
initiative and self-direction. Employees should be given opportunities to contribute to
organizational well-being. Theory Y encourages decentralization of authority, teamwork and
participative decision making in an organization. Theory Y searches and discovers the ways in
which an employee can make significant contributions in an organization. It harmonizes and
matches employees’ needs and aspirations with organizational needs and aspirations.

Conclusion:
For McGregor, Theory X and Theory Y are not opposite ends of the same continuum, but rather
two different continua in themselves. In order to achieve the most efficient production, a
combination of both theories may be appropriate.[6] This approach is derived from Fred
Fiedler's research over various leadership styles known as the contingency theory. This theory
states that managers evaluate the workplace and choose their leadership style based upon both
internal and external conditions presented. Managers who choose the Theory X approach have
an authoritarian style of management. An organization with this style of management is made
up of several levels of supervisors and managers who actively intervene and micromanage the
employees.[12] On the contrary, managers who choose the Theory Y approach have a hands-off
style of management. An organization with this style of management encourages participation
and values individuals' thoughts and goals. However, because there is no optimal way for a
manager to choose between adopting either Theory X or Theory Y, it is likely that a manager
will need to adopt both approaches depending on the evolving circumstances and levels of
internal and external locus of control throughout the workplace.
 Maslow's Hierarchy of Needs
Maslow first introduced his concept of a hierarchy of needs in his 1943 paper "A Theory of
Human Motivation" and his subsequent book Motivation and Personality. This hierarchy
suggests that people are motivated to fulfill basic needs before moving on to other, more
advanced needs.

There are five different levels of Maslow’s hierarchy of needs. Let's take a closer look at
Maslow’s needs starting at the lowest level, known as physiological needs.

Physiological Needs
The basic physiological needs are probably fairly apparent—these include the things that are
vital to our survival. Some examples of physiological needs include:

Food
Water
Breathing
Homeostasis
Security and Safety Needs
At this level, the needs for security and safety become primary. People want control and order in
their lives, so this need for safety and security contributes largely to behaviors at this level.

Some of the basic security and safety needs include:

 Financial security
 Health and wellness
 Safety against accidents and injury

Social Needs
The social needs in Maslow’s hierarchy include such things as love, acceptance, and belonging.
At this level, the need for emotional relationships drives human behavior. Some of the things that
satisfy this need include:

Friendships
Romantic attachments
Family
Social groups

Esteem Needs
At the fourth level in Maslow’s hierarchy is the need for appreciation and respect. When the
needs at the bottom three levels have been satisfied, the esteem needs begin to play a more
prominent role in motivating behavior.

At this point, it becomes increasingly important to gain the respect and appreciation of others.
People have a need to accomplish things and then have their efforts recognized.

Self-Actualization Needs
At the very peak of Maslow’s hierarchy are the self-actualization needs. "What a man can be, he
must be," Maslow explained, referring to the need people have to achieve their full potential as
human beings.

Conclusion
The human brain is a complex system and has parallel processes running at the same time, thus
many different motivations from various levels of Maslow's hierarchy can occur at the same
time. Maslow spoke clearly about these levels and their satisfaction in terms such as "relative",
"general", and "primarily". Instead of stating that the individual focuses on a certain need at any
given time, Maslow stated that a certain need "dominates" the human organism.[5] Thus Maslow
acknowledged the likelihood that the different levels of motivation could occur at any time in the
human mind.
Two-Factor Theory of Motivation
One of the main content theories of motivation, the Two-Factory Theory was proposed by
American psychologist Frederick Herzberg. According to this theory, there are two types of
factors that influence motivation and satisfaction among individuals, particularly those who work
in the employment sector.

In 1959, Herzberg conducted a study with 200 engineers and accountants as the subjects. They
were asked to recollect their experiences and feelings (positive or negative) they had at work,
and the reasons behind the way they felt. Based on the subjective data from the respondents,
Herzberg began to analyze their job attitudes. From the study, he proposed a two-factor approach
when attempting to understand motivation among employees.

Hygiene Factors
Hygiene factors are those that need to be addressed by a business in such a way that they would
not result to the employee’s unpleasant experiences and feelings at work. The satisfaction of
hygiene factors motivates employees in their work. The hygiene factors are:

 Wages, salaries and other financial remuneration

 Company policy and administration
 Quality of interpersonal relations
 Working conditions
 Feelings of job security
 Quality of supervision
Motivator Factors
Motivator factors emerge from the need of an individual to achieve personal growth. Job
satisfaction results from the presence of motivator factors. Moreover, effective motivator factors
do not only lead to job satisfaction, but also to better performance at work. The motivator factors
are:

Challenging or stimulating work

Status
Opportunity for advancement
Responsibility
Sense of personal growth/job achievement
Acquiring recognition

Application
The two-factor theory of motivation can be used to analyze any evidence of de-motivated
employees at work. Applying Herzberg’s model, these evidences may include a low level of
productivity, poor quality of production and/or service, poor employee-employer relationships,
strikes and industrial disputes concerning pay and/or working condition complaints. Following a
thorough assessment on the hygiene factors of the business and the motivator factors concerning
employees at work, Herzberg suggested that the business’ management to apply three methods in
which work can be rearranged:

 Job Enlargement
 Job Rotation
 Job Enrichment

Criticisms
The Two-Factor Theory has been criticized by behaviourists due to its general assumption that
satisfied workers have greater productivity. In addition, critics said that a statistical theory such
as this explains that a management must work primarily to satisfy the employees, which may
lead to lower business output.

Conclusion
According to Herzberg, the factors leading to job satisfaction are "separate and distinct from
those that lead to job dissatisfaction." Therefore, if you set about eliminating dissatisfying job
factors, you may create peace but not necessarily enhance performance. This placates your
workforce instead of actually motivating them to improve performance.

To apply the theory, you need to adopt a two-stage process to motivate people. Firstly, you need
to eliminate the dissatisfaction they're experiencing and, secondly, you need to help them find
satisfaction.