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Theory X and Theory Y 

Submitted to: Sir.Hamid Cheema

Submitted by: Noor Amna (28)

Hania Ahmad (14)

Tehreem Sherazi (138)

2015 

BBA 5th Regular  

12/14/2015

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Theory X and Theory Y 

Douglas McGregor:

Douglas Murray McGregor (1906 –  1 October 1964) was

a management  professor at the MIT Sloan School of Management and

 president of  Antioch College from 1948 to 1954.] He also taught atthe Indian Institute of Management Calcutta. His 1960 book The Human

Side of Enterprise had a profound influence on education practices.

Douglas McGregor is a contemporary of Abraham Maslow. Likewise,

he also contributed much to the development of the management and

motivational theory. He is best known for his Theory X and Theory Y as

 presented in his book ‘The Human Side of Enterprise’ (1960), which

 proposed that manager’s individual assumptions about human nature and

 behavior determined how individual manages their employees.

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Theory X and Theory Y 

Career:

McGregor was born in Detroit. He earned a B.E. (Mechanical) from

Rangoon Institute of Technology, an A.B. from Wayne StateUniversity in 1932, then earned an M.A. and Ph.D. in psychology

from Harvard University in 1933 and 1935 respectively. 

The Human Side of Enterprise: 

In the book The Human Side of Enterprise, McGregor identified an

approach of creating an environment within which employees aremotivated via authoritative, direction and control or integration and self-

control, which he called theory X and theory Y, respectively. Theory Y

is the practical application of Dr. Abraham Maslow's Humanistic School

of Psychology, or Third Force psychology, applied to scientific

management.

He is commonly thought of as being a proponent  of Theory Y, but,

as Edgar Schein tells in his introduction to McGregor's subsequent,

 posthumous (1967), book The Professional Manager  : "In my owncontacts with Doug, I often found him to be discouraged by the degree

to which theory Y had become as monolithic a set of principles as those

of Theory X, the over-generalization which Doug was fighting....Yet

few readers were willing to acknowledge that the content of Doug's

 book made such a neutral point or that Doug's own presentation of his

 point of view was that coldly scientific".

Graham Cleverley in Managers & Magic (Longman's, 1971) comments:

"...he coined the two terms Theory X and theory Y and used them tolabel two sets of beliefs a manager might hold about the origins of

human behavior. He pointed out that the manager's own behavior would

 be largely determined by the particular beliefs that he subscribed

to....McGregor hoped that his book would lead managers to investigate

the two sets of beliefs, invent others, test out the assumptions underlying

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Theory X and Theory Y 

them, and develop managerial strategies that made sense in terms of

those tested views of reality. "But that isn't what happened. Instead

McGregor was interpreted as advocating Theory Y as a new and

superior ethic - a set of moral values that ought  to replace the valuesmanagers usually accept."

The Human Side of Enterprise was voted the fourth most influential

management book of the 20th century in a poll of the Fellows of

the Academy of Management. 

Legacy:

McGregor died, age 58, in Massachusetts. In 1994, the School of Adult

and Experiential Learning at Antioch College was renamed the

"McGregor School" in his honor. It was later renamed "Antioch

University McGregor" and then "Antioch University Midwest."

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Theory X and Theory Y 

Introduction:'Theory X' and 'Theory Y' are theories of human

motivation and management. They were created and developed by Douglas McGregor  at the MIT Sloan School of

Management in the 1960s. These theories describe two

contrasting models of workforce motivation applied by

managers in human resource management, organizational

 behavior , organizational communication and organizational

development. McGregor terms the two models as 'Theory X',

which stresses the importance of strict supervision and external

rewards and penalties; and 'Theory Y', which highlights themotivating role of   job satisfaction and allows scope for workers

to approach tasks creatively.

Theory X and Theory Y pertain to employee motivation and

have been used in human resource management, organizational

 behavior analysis, and organizational

development. EmpXtrack   –  an Integrated Human Capital and

Talent Management Tool is based on such theories and helpsorganizations to transform their human resource practices.

Generally, the study of Psychological interaction between the

management of an organization and the subordinate employees

are very wide. Before considering distribution of works, an

organization must decide from the outset how to deal with

employees. In order to lead to improved performance for the

company and possibly to improved employee relations, a strong

understanding of the relationship should be practiced. Thus,

numerous theories have been designed related to the

 psychological interaction between the management of an

organization and the subordinate employees. Theory X and Y

which deals with the motivational factors that influence

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Theory X and Theory Y 

employee behavior was one of the theories. Since Theory X and

Y dealing with a complete system of interaction, similar to how

a physical model simulates the behavior of a physical system,

Theory X and Y considered as ‘models’. Douglas McGregor isthe one who constructed Theory X and Y in the 1960s. Theory

X and Y created by McGregor has been a valid basic principle

from which to develop positive management style and

techniques. McGregor's ideas suggest that there are two

fundamental approaches to managing people. Several managers

influenced by theory x, and generally get poor results. On the

other hand, liberal managers use theory y, which produces better performance and results, and allows people to grow and

develop. Moreover, McGregor’s concept relatively relate to

modern understanding of the Psychological Contract, which

 provides several ways to appreciate the unhelpful nature of X-

Theory leadership, and the useful constructive beneficial nature

of Y-Theory leadership. The aim of this research is to review

and synthesizing concepts and ideas from related sources relying

on literature reviews to argue that there is a relationship between

Theory X, Theory Y management style with fulfillment of

Psychological Contract.

Literature review:Theory X and Theory Y was an idea devised by Douglas

McGregor in his book “The Human Side of Enterprise” 1960. It

encapsulated a fundamental distinction between management

styles and has formed the basis for much subsequent writing onthe subject.

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Theory X and Theory Y 

Theory X and Theory Y: Theories of employee

Motivation:

Theory X and Theory Y, created

and developed by Douglas McGregor at the MIT Sloan School

of Management in the 1960s, pertain to employee motivationand have been used in human resource management,

organizational behavior analysis, and organizational

development. They describe two very different attitudes towards

workforce motivation. McGregor felt that companies followed

either one of these approaches.

Theory X:In the first few decades of the 20th century Theory X is the stylethat predominated in business after the mechanistic system of

scientific management had swept everything away. Theory X is

an authoritarian style where the emphasis is on “productivity, on

the concept of a fair day's work, on the evils of feather-bedding

and restriction of output, on rewards for performance (Tim

Hindle 2003). Latterly Theory X has been considered as a

negative way of dealing with employees. In this theory itsassume that employees are, by nature, reluctant to fulfill the

obligations of their job and instead will find ways to avoid work

or otherwise reduce their work output in a bid to expend the

least amount of effort possible. When there is more motivated

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Theory X and Theory Y 

management staff and owners urge the employees into making

them work, the company will be successful and have productive

employees as conceived by Theory X. In order to detect

attempts by the staff to avoid work it is demanded a strictcontrol and monitoring of behavior. The authority must keep a

careful eye out for sabotaging effects by self-interested

employees and find the cause of disruptions, handing out

 penalties in the belief that a sincere wish to avoid responsibility

is the root cause for the majority of trouble. 

In this theory management assumes employees are inherently

lazy and will avoid work if they can. Because of this, workers

need to be closely supervised and comprehensive systems of

control put in place. A hierarchical structure is needed, with

narrow span of control at each level, for effective management.

According to this theory employees will show little ambition

without an enticing incentive program and will avoidresponsibility whenever they can.

The managers influenced by Theory X believe that everything

must end in blaming someone. They think most employees are

only out for themselves and their sole interest in the job is to

earn money. They tend to blame employees in most situations,

without questioning the systems, policy, or lack of training

which could be the real cause of failures.

Managers that subscribe to Theory X tend to take a rather pessimistic view of their employees. A Theory X manager

 believes that it is the manager’s job to structure the work and

energize the employee. The result of this line of thought is that

Theory X managers naturally adopt a more authoritarian style

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Theory X and Theory Y 

 based on the threat of punishment. Critics believe that a Theory

X manager could be an impediment to employee morale &

 productivity.

Theory X considers that on the whole, workers dislike their

work, and have little inherent motivation to perform well.

Therefore, if organizational goals are to be met, 'Theory X'

managers must rely heavily on detailed rules and instructions, on

close monitoring, and on the threat of punishment to gain

employee compliance. When practiced, this theory can lead to

mistrust, highly restrictive supervision and a punitive

atmosphere. The 'Theory X' manager believes that all actions

should be traced and the responsible individual given a direct

reward or a reprimand according to the action's outcomes. This

managerial style is more effective when used to motivate a

workforce that is not inherently motivated to perform. It is

usually exercised in professions where promotion is infrequent,unlikely or even impossible and where workers perform

repetitive tasks. A flaw of this management style is that it limits

the employee's potential and discourages creative thinking. 

Theory x ('authoritarian management' style) 

  The average person dislikes work and will avoid it he/she

can.  Therefore most people must be forced with the threat of

 punishment to work towards organizational objectives.

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Theory X and Theory Y 

The average person prefers to be directed; to avoid

responsibility; is relatively unambitious, and wants security

above all else.

Theory Y:Theory Y is a participative style of management which

“assumes that people will exercise self direction and self -control

in the achievement of organizational objectives to the degree

that they are committed to those objectives”. It is management's

main task in such a system to maximize that commitment (TimHindle 2003). In many ways, Theory Y is, the diverse to that of

Theory X. Rather than taking the view that employees must be

forced to do what management want and that they will not,

under any circumstances, do anything beneficial for the

company under their own direction, Theory Y states that

employees actually become more productive when more trust

and responsibility is delegated to them. According to Theory Y,employees do wish to work and be productive and the act of

doing well at work is itself a strong motivator. Moreover if the

employee’s will seek responsibility and ways to be productive, if

they are allowed to do so. Regarding to Charles M. Carson,

(2005), McGregor theory Y stands in a unique place in

management history and advocated a heightened awareness of

management's responsibility for the human side of employer-

employee relations. In a nutshell, according to McGregor: “Manis a wanting animal and as soon as one of his needs is satisfied,

another appears in its place. McGregor urged companies to

adopt Theory Y. Only it, he believed, could motivate human

 beings to the highest levels of achievement. Theory X merely

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Theory X and Theory Y 

satisfied their lower-level physical needs and could not hope to

 be as productive.

Management influenced by this theory assumes that employees

are ambitious, self-motivated, and anxious to accept greaterresponsibility and exercise self-control, self-direction, autonomy

and empowerment. Management believes that employees enjoy

their work. They also believe that, given a chance, employees

have the desire to be creative at their work place and become

forward looking. There is a chance for greater productivity by

giving employees the freedom to perform to the best of their

abilities, without being bogged down by rules.

A Theory Y manager believes that, given the right conditions,

most people will want to do well at work and that there is a pool

of unused creativity in the workforce. They believe that the

satisfaction of doing a good job is a strong motivation in itself.

A Theory Y manager will try to remove the barriers that preventworkers from fully actualizing themselves.

Many people interpret Theory Y as a positive set of

assumptions about workers. A close reading of The Human

Side of Enterprise reveals that McGregor simply argues for

managers to be open to a more positive view of workers and

the possibilities that create enthusiasm. 

Theory y ('participative management' style) 

  Effort in work is as natural as work and play.

  People will apply self-control and self-direction in the

 pursuit of organizational objectives, without external

control or the threat of punishment.

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Theory X and Theory Y 

  Commitment to objectives is a function of rewards

associated with their achievement.

  People usually accept and often seek responsibility.

  The capacity to use a high degree of imagination, ingenuityand creativity in solving organizational problems is widely,

not narrowly, distributed in the population. In industry the

intellectual potential of the average person is only partly utilized. 

Characteristics of the x theory manager:

Perhaps the most noticeable aspects of McGregor's XY Theory -and the easiest to illustrate - are found in the behaviors of

autocratic managers and organizations which use autocratic

management styles.

What are the characteristics of a Theory X manager? Typicallysome, most or all of these:

  results-driven and deadline-driven, to the exclusion of

everything else

  intolerant

  issues deadlines and ultimatums

  distant and detached

  aloof and arrogant

  elitist

  short temper

  shouts  issues instructions, directions, edicts

  issues threats to make people follow instructions

  demands, never asks

  does not participate

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Theory X and Theory Y 

  does not team-build

  unconcerned about staff welfare, or morale

   proud, sometimes to the point of self-destruction

  one-way communicator   poor listener

  fundamentally insecure and possibly neurotic

  anti-social

  vengeful and recriminatory

  does not thank or praise

  withholds rewards, and suppresses pay and remunerations

levels  scrutinizes expenditure to the point of false economy

  seeks culprits for failures or shortfalls

  seeks to apportion blame instead of focusing on learning

from the experience and preventing recurrence

  does not invite or welcome suggestions

  takes criticism badly and likely to retaliate if from below or

 peer group

   poor at proper delegating - but believes they delegate well

  thinks giving orders is delegating

  holds on to responsibility but shifts accountability to

subordinates

  relatively unconcerned with investing in anything to gain

future improvements

  Unhappy.

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Theory X and Theory Y 

How to manage upwards - managing your X theory

boss:Working for an X theory boss isn't easy - some extreme X

theory managers make extremely unpleasant managers, but there

are ways of managing these people upwards. Avoiding

confrontation (unless you are genuinely being bullied, which is adifferent matter) and delivering results are the key tactics.

  Theory X managers (or indeed theory Y managers

displaying theory X behavior) are primarily results oriented

- so orientate your own discussions and dealings with themaround results - i.e. what you can deliver and when.

  Theory X managers are facts and figures oriented - so cut

out the incidentals, be able to measure and substantiate

anything you say and do for them, especially reporting on

results and activities.

  Theory X managers generally don't understand or have an

interest in the human issues, so don't try to appeal to their

sense of humanity or morality. Set your own objectives to

meet their organizational aims and agree these with the

managers; be seen to be self-starting, self-motivating, self-

disciplined and well-organized - the more the X theory

manager sees you are managing yourself and producing

results, the less they'll feel the need to do it for you.

  Always deliver your commitments and promises. If you are

given an unrealistic task and/or deadline state the reasonswhy it's not realistic, but be very sure of your ground, don't

 be negative; be constructive as to how the overall aim can

 be achieved in a way that you know you can deliver.

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Theory X and Theory Y 

  Stand up for yourself, but constructively - avoid

confrontation. Never threaten or go over their heads if you

are dissatisfied or you'll be in big trouble afterwards and

life will be a lot more difficult.  If an X theory boss tells you how to do things in ways that

are not comfortable or right for you, then don't questioning

the process, simply confirm the end-result that is required,

and check that it's okay to 'streamline the process' or 'get

things done more efficiently' if the chance arises - they'll

normally agree to this, which effectively gives you control

over the 'how', provided you deliver the 'what' and 'when'.

And this is really the essence of managing upwards X theory

managers - focus and get agreement on the results and deadlines

- if you consistently deliver, you'll increasingly be given more

leeway on how you go about the tasks, which amounts to more

freedom. Be aware also that many X theory managers are forced

to be X theory by the short-term demands of the organization

and their own superiors - an X theory manager is usuallysomeone with their own problems, so try not to give them any

more.

Implementation of theory in management:In practice Theory X managers tend to be autocratic and

controlling, and feel it is up to them to ride people and make

them do their work (i.e., managers are “policemen”). These

managers tend to micro-manage, be extremely task oriented andnot put much emphasis on building positive relationships. Little

emphasis is shown towards developing a positive work

environment, and recognition and appreciation would be rare.

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Theory X and Theory Y 

People working for these managers tend to be motivated by fearand feel unappreciated. 

Working for an X theory boss isn't easy - some extreme Xtheory managers make extremely unpleasant managers, but there

are ways of managing these people upwards. Avoiding

confrontation (unless you are genuinely being bullied, which is adifferent matter) and delivering results are the key tactics.

  Theory X managers (or indeed theory Y managers

displaying theory X behavior) are primarily results oriented

- so orientate your own discussions and dealings with themaround results - i.e. what you can deliver and when.

  Theory X managers are facts and figures oriented - so cut

out the incidentals, be able to measure and substantiate

anything you say and do for them, especially reporting on

results and activities.

  Theory X managers generally don't understand or have an

interest in the human issues, so don't try to appeal to their

sense of humanity or morality. Set your own objectives to

meet their organizational aims and agree these with the

managers; be seen to be self-starting, self-motivating, self-

disciplined and well-organized - the more the X theory

manager sees you are managing yourself and producing

results, the less they'll feel the need to do it for you.

  Always deliver your commitments and promises. If you are

given an unrealistic task and/or deadline state the reasonswhy it's not realistic, but be very sure of your ground, don't

 be negative; be constructive as to how the overall aim can

 be achieved in a way that you know you can deliver.

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Theory X and Theory Y 

  Stand up for yourself, but constructively - avoid

confrontation. Never threaten or go over their heads if you

are dissatisfied or you'll be in big trouble afterwards and

life will be a lot more difficult.  If an X theory boss tells you how to do things in ways that

are not comfortable or right for you, then don't questioning

the process, simply confirm the end-result that is required,

and check that it's okay to 'streamline the process' or 'get

things done more efficiently' if the chance arises - they'll

normally agree to this, which effectively gives you control

over the 'how', provided you deliver the 'what' and 'when'.

And this is really the essence of managing upwards X theory

managers - focus and get agreement on the results and deadlines

- if you consistently deliver, you'll increasingly be given more

leeway on how you go about the tasks, which amounts to more

freedom. Be aware also that many X theory managers are forced

to be X theory by the short-term demands of the organization

and their own superiors - an X theory manager is usuallysomeone with their own problems, so try not to give them any

more.

Applying Theory Y Modern research and your own life experiences validate that,

generally speaking, the Theory Y leadership style will lead to

 better results —  both for your people and for you as a manager. It

is important to determine which style of leadership you want tofollow — then do it.

It can be valuable to get regular feedback through direct

questions, surveys and third parties to assess how effective your

leadership style is. The bottom line is that most people will

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Theory X and Theory Y 

respond positively to a Theory Y leadership approach —and it’s

up to us to provide it.

Let’s get specific: how do we practice Theory Y management?

Here are a few pointers:• Vision and Expectations: paint a positive vision of a better

future, and be clear about expectations. Express your confidence

in your team to be great. As John Steinbeck said: “It is the

nature of man to rise to greatness if greatness is expected of

him.” 

• Leadership approach: be a servant leader, not a “serve me”

leader. Minimize differences between the management-staffrelationship.

• Planning and Decision Making: be participative, not

autocratic. Seek and listen to input from your team members.

• Communication: err on the side of over communication rather

than under communication. Be honest, realistic and positive — 

and be a good listener too.

• Control: it is important to have policies, procedures and work

standards in place. But avoid being over-controlling and micro-

managing the work. Showing trust in your people will lead to

higher morale and motivation. Also, encourage your people to

share their ideas and use their ingenuity and creativity to do the

work smarter and better serve your team’s stakeholders. 

• Recognition: provide regular informal and formal recognition.

A recent study suggested the ratio of positive (appreciative)

statements to constructive statements should be at least 5:1 tomaximize relationships and motivation.

Let me close with a quote from Sam Walton: “Outstanding

leaders go out of their way to boost the self-esteem of their

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Theory X and Theory Y 

 personnel. If people believe in themselves, it’s amazing what

they can accomplish.” 

Good luck as you apply the Theory Y approach and help your

 people and teams achieve their potential

Criticism:. Theory X: 

Theory X suggests that individual's have an instilled dislike for

work and try to avoid it. Thus, all workers dislike work, try toavoid work, are born inherently lazy, must be constantly

dominated into doing a honest day’s work and only turn up to

work to collect their pay. This means that employees must be

controlled by threat in order to perform. Such an employee

 prefers to be directed, avoids responsibility, is explicit, and

 prefers security above all else.

Criticism : These assumptions of the Theory X employee may

lead to various problems, such as a tough management (that

 believes in punishment and tight controls) and a soft

management (who strives for harmony in the workplace, at the

expense of efficiency). It does not make allowance for

employees who need a feeling of self-fulfillment. Theory X

managers also expect employees to behave in an expected,

 predictable fashion.

Theory Y: Theory Y assumes that employees basically like to work and

view work as something rather natural; moreover the worker

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Theory X and Theory Y 

views this as a potentially enjoyable and positive experience. It

 propounds that there are ways to make individuals perform other

than through control and punishment. If the employee is

committed to the mission of the department s/he will become aself directed employee. Job satisfaction means commitment to

the department and its mission. Under the proper conditions, the

employee will learn and lead in to acceptance of responsibility.

Many employees by the use of creativity, imagination and

ingenuity, can solve problems - no matter how big or small.

Criticism : Theory Y may be hard to utilize where there are a

large number of employees, but can be utilized on the

departmental/divisional managers of an organization. This

theory also effects the management of promotions, salaries, and

development of effective managers.

Some of McGregor’s theories are unrealizable in practice, but

the basic assumption can be adhered to, and put into operation.

Conclusion

Theory X-Y by McGregor is one of the easy ways to conduct

 people with natural rules, in daily business which goes through

 pressure. The concept of McGregor says that there are two

fundamental approaches to managing people. Several managers

influenced by theory x, and generally get poor results. On theother hand, liberal managers use theory y, which produces better

 performance and results, and allows people to grow and

develop. Theory Y managers are the effective leaders who could

fulfill the psychological contract of employees. It’s believed that

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Theory X and Theory Y 

mainly Theory Y management’s style is about psychological

contract fulfillment and this area of study is suggested for future

research.