Theory X and Theory Y is formulated by Douglas McGregor in 1960, It suggesting two aspects of human behavior at work, or in other words, two different views of individuals: one of which is negative, called 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.
Theory X managers tend to take a pessimistic view of their people and assume that they are naturally unmotivated and dislike work. As a result, they think that team members need to be prompted, rewarded, or punished constantly to make sure that they complete their tasks.
Although Theory X management has largely fallen out of fashion in recent times, big organizations may find that adopting it is unavoidable due to the sheer number of people that they employ and the tight deadlines that they have to meet.
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 to achieve organizational goals. Close supervision is required on part of managers.
- 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.
Theory Y has become more popular among organizations. This reflects workers’ increasing desire for more meaningful careers that provide them with more than just money. It’s also viewed by McGregor as superior to Theory X, which, he says, reduces workers to “cogs in a machine,” and likely demotivates people in the long term.
Assumptions of Theory Y
- Employees can perceive their job as relaxing and normal. They exercise their physical and mental efforts inherently 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 the organization.
- An average employee can learn to admit and recognize 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.