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, initially presented at a management conference in 1957, and developed during the 1960s. These two theories describe contrasting models of workforce motivation applied by managers in human resource management, organizational behavior, organizational communication and organizational development. According to the models, the two opposing sets of general assumptions of how workers are motivated form the basis for two different managerial styles. Theory X stresses the importance of strict supervision, external rewards, and penalties: in contrast, Theory Y highlights the motivating role of job satisfaction and encourages workers to approach tasks without direct supervision.
Theory X is based on pessimistic assumptions regarding the typical worker. This management style supposes that the typical employee has little to no ambition, shies away from work or responsibilities, and is individual-goal oriented. Generally, Theory X style managers believe their employees are less intelligent than the managers are, lazier than the managers are, or work solely for a sustainable income. Due to these assumptions, Theory X concludes the typical workforce operates more efficiently under a "hands-on" approach to management. 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 in a workforce that is not intrinsically motivated to perform. It is usually exercised in professions where promotion is infrequent, unlikely or even impossible and where workers perform repetitive tasks.
According to McGregor, there are two opposing approaches to implementing Theory X: the "hard" approach and the "soft" approach. The hard approach depends on close supervision, intimidation, and imminent punishment. This approach can potentially yield a hostile, minimally cooperative work force that could harbor resentment towards management. The soft approach is the literal opposite, characterized by leniency and less strictly regulated rules in hopes for high workplace morale and therefore cooperative employees. Implementing a system that is too soft could result in an entitled, low-output workforce. McGregor believes both ends of the spectrum are too extreme for efficient real world application. Instead, McGregor feels that somewhere between the two approaches would be the most effective implementation of Theory X.
Overall, Theory X generally proves to be most effective in terms of consistency of work. Although managers and supervisors are in almost complete control of the work, this produces a more systematic and uniform product or work flow. Theory X can also benefit a work place that is more suited towards an assembly line or manual labor type of occupation. Utilizing theory X in these types of work conditions allow the employee to specialize in a particular area allowing the company to mass produce more quantity and higher quality work, which in turns brings more profit.
In contrast, Theory Y managers act on the belief that people in the work force are internally motivated, enjoy their labor in the company, and work to better themselves without a direct "reward" in return. Theory Y employees are considered to be one of the most valuable assets to the company, and truly drive the internal workings of the corporation. Also, Theory Y states that these particular employees thrive on challenges that they may face, and relish on bettering their personal performance. Workers additionally tend to take full responsibility for their work and do not require the need of constant supervision in order to create a quality and higher standard product.
Because of the drastic change compared to the "Theory X" way of directing, "Theory Y" managers gravitate towards relating to the worker on a more personal level, as opposed to a more conductive and teaching based relationship. As a result, Theory Y followers may have a better relationship with their higher ups, as well as potentially having a healthier atmosphere in the work place. Managers in this theory tend to use a democratic type of leadership because workers will be working in a way that does not need supervision the most.
In comparison to "Theory X", "Theory Y" adds more of a democratic and free feel in the work force allowing the employee to design, construct, and publish their works in a timely manner in co-ordinance to their work load and projects. Aydin reports a study undertaken to analyze the different management styles of professors at a Turkish University. This study found that the highly supervised Theory X management affected the research performance of the academics negatively. In general, the study suggests that the professional setting and research based work that professors perform is best managed using a Theory Y management style.
While "Theory Y" may seem optimal, it does have some drawbacks. While there is a more personal and individualistic feel, this does leave room for error in terms of consistency and uniformity. The workplace lacks unvarying rules and practices, and this can result in an inconsistent product which could potentially be detrimental to the quality standards and strict guidelines of a given company.
For McGregor, Theory X and 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. This approach is derived from Fred Fiedler's research over various leadership styles known as the contingency theory. This theory is based on 3 dimensions: Leader-member relationship, degree of task structure, and the leader's position power.
According to the contingency theory, it is likely that a manager will need to adopt both approaches depending on the evolving circumstances, and internal and external locus of control throughout their workforce.
People with a strong internal locus of control (personality) believe outcomes in their life develop primarily from their own actions and abilities, as a result they are task-oriented and spend little time building relationships among peers (Theory X). People with strong external locus of control believe outside factors are the primary influence on the outcomes in their life, therefore, they are relationship-oriented and focus on building relationships among peers (Theory Y).
For example, when completing a project, an internal locus of control manager may use their rank as a factor to lead a workforce and focus on the group's ability and skills to achieve the best outcome, however, an external locus of control manager will use their relationship formed with a workforce to lead the group and focus on the workforce's morale and self-satisfaction to achieve the best result.
McGregor's management theories closely relate to Maslow's hierarchy of needs, a model in which motivation is used to achieve higher level needs (social, esteem, and self-actualization) after basic physiological and safety needs are met. Maslow believes that higher level needs can be achieved through sense of achievement, having autonomy, having feelings of self-worth, and realizing one's potential. McGregor agreed with Maslow that self-actualization is the highest level human need that ought to be achieved, this reflects his bias for promoting Theory Y management which emphasizes self-motivation. With the adoption of Theory Y practices, managers can create an environment where workers can achieve their highest needs of esteem and self-actualization. Because of the close supervision Theory X managers adopt, these types of workers tend not to feel autonomous or have self-direction, therefore workers are typically not motivated to achieve higher level needs.