Mc Gregor’s Theory X and Theory Y

In the year 1960, Douglas McGregor, a management professor at the Massachusetts Institute of Technology, proposed two theories based on the hypothesis related to human behaviour in his book The Human Side of Enterprise. He believed that while motivating people, there are certain assumptions about human nature that should be taken into consideration. According to McGregor, there are two aspects of human behaviour at work which he described as Theory X (negative aspect) and Theory Y (positive aspect).

The process of stimulating and inspiring people at work to contribute to the best of their capability for the achievement of organisational objectives is known as Motivation. Motivation is the inner psychological force that activates and compels a person to behave in a particular manner. It is a process of inductive individual desire towards a goal. Human beings drive satisfaction when the goal is achieved. Both financial and non-financial factors motivate employees in the organization.

Theory X

According to McGregor, Theory X is based on the following assumptions:

• The average human being will avoid work whenever it is possible because of their inherent dislike of work.
• Most of the people are gullible and not very intelligent.
• Most people by nature, always resist change and have security as their priority.
• An average person doesn’t like responsibility, lacks ambition, and prefers to be directed by others.
• Lastly, an average human being is self-centred and indifferent to organisational goals.

Simply put, Theory X assumed that the basic source of an employee’s motivation is money after which he prefers security.

Based on these assumptions, the following proposition is put together:

1. It is the responsibility of the management to organise the elements of a productive enterprise (money, equipment, material, and people) in the interest of economic gain.

2. While talking about human beings, management includes directing the efforts of people, motivating them, controlling their actions, and modifying their actions and behaviour based on the organisational needs.

3. It is essential for the management to reward, persuade, punish, and control people. It is because, without their active intervention, these people would become passive and even resist the organisational needs.

4. As it is assumed in this theory that people dislike work, it is necessary to coerce, control, direct, and threaten them with punishment to get things done from them for the accomplishment of the organisational goals.

As the above-mentioned assumptions are negative in nature, it can be said that Theory X developed by McGregor is a traditional or conventional approach to motivation. The management feels external control is more appropriate to deal with irresponsible, unreliable, and immature people. McGregor believes that an organisation that closely supervises and controls its subordinates, and has highly centralised authority is one which is built upon the notions of Theory X. Besides, in these kinds of organisations there is autocratic leadership, and the employees, if any, will have very less say in the decisions affecting them. The management motivates people by promising them greater pay and through the threat of punishment. Simply put, an organisation following Theory X will have an impersonal climate as it uses carrot and stick approach to motivation.

Theory Y

The assumptions on which Theory X was formulated had some faulty misconceptions about human nature. McGregor realised that there are some needs that were not considered in Theory X, such as ego satisfaction, social needs, and self-fulfilment of individual workers. Therefore, to meet these left-out needs, McGregor developed a counter approach, known as Theory Y, which proposes that:

1. It is the responsibility of the management to organise the elements of a productive enterprise in the interest of social as well as economic gains.

2. The theory also states that people are not passive or restricted to the needs of the organisation by nature. Their nature changes to this because of experience.

3. Characteristics like readiness to direct behaviour towards the organisational goals, motivation, potential for development, etc., are already present in the people. The management has to just make it possible for these people to recognise these characteristics in themselves.

4. Besides, it is important for the management to arrange the condition and methods of operations of the organisation so that the employees can achieve their personal goals by directing their efforts towards the goals of the organisation. 

The assumptions on which Theory Y is based are as follows:

• First of all, it is assumed that if the working conditions are favourable, then it can be as natural as play and rest. Average human being has no inherent dislike towards work. If the work is meaningful to a person, then it can be a source of satisfaction and there is a high possibility that it is performed voluntarily.
• If an individual is committed to work, then he/she will exercise self-control and self-direction to accomplish the work and organisational objectives. In simple terms, the threat of punishment or external control is not the only means of motivating an individual to complete the work and accomplish organisational goals.
• Besides, if an objective is associated with some reward, then the employee will have a high commitment toward the accomplishment of those objectives. For example, a person will be more committed to an organisational objective or work which accomplishes his self-development needs and satisfies his ego. Also, once an individual has selected his goal, he will continue with the work without any control or close supervision.
• If an average human being gets proper working conditions, then they will not step back from their responsibility. They will not only take the responsibility but will also work towards fulfilling it. Simply put, lack of ambition, avoidance of responsibility, and emphasis on security arise because of experience, not because of an individual’s inherent dislike of work.
• It also assumed that imagination, creativity, and ingenuity are found in high amounts in human beings.
• People have unlimited potential but, under modern industrial life conditions, their intellectual potential is not fully utilised.

With the above explanation and assumptions, it can be seen that the modern and dynamic nature of human beings is represented through Theory Y. This theory is based on assumptions that are closer to reality. An organisation following Theory Y has decentralised authority, a two-way communication system, job enrichment, and participative leadership. The theory focuses on responsible jobs and self-control. With the help of the assumptions of Theory Y, there can be a more cooperative relationship between the workers and their managers. In simple terms, with Theory Y, the management of an organisation tries to establish a working environment in which an individual’s personal needs and goals can relate to the organisational goals.

Critical Appraisal

McGregor’s Theory X and Theory Y of motivation are simple. It has helped in crystalising and putting the findings of Hawthrone Experiments into the right perspective. This theory has also generated a wide range and lasting interest in the field of motivation and offers a framework that is convenient for analysing the relationship between leadership style and motivation. 

Despite its importance, the theory has been criticised because of the following reasons:

• First of all, the theory tends to over-simplify and over-generalise people as being one way or the other. One cannot put human beings in two extreme stereotypes or patterns (for example, as either a person who dislikes work or a person who likes work). Therefore, this theory overlooks the complex nature of people. It is not essential that every organisation has people who either belong to Theory X or Theory Y. There may be some people who have traits or characteristics of both theories, who can shift from one set of properties to the other based on the changing internal and external environment of the organisation.
• Secondly, the theory puts all philosophies and managerial styles in two extremes, which is not possible in real-life situations.
• Also, McGregor has suggested that the key to motivation is the job itself. However, not every individual look into a job for motivation, and every work cannot be made challenging and rewarding.
• Lastly, there may be some people in the organisation who have Theory Y assumptions but their manager might feel that he has to behave in a controlling and directive manner with them for some time, until they develop and become true Y people. 

It is said that Theory Y is too idealistic and an organisation with only Theory Y cannot succeed as direction and structure are required at some level. To improve this drawback, Maslow advocated an improved version of Theory Y. In this version, an element of direction and structured security is taken from Theory X.

If we talk about which theory is best, Theory X or Theory Y, most people prefer Theory Y as it is more productive and desirable. However, Theory Y may not be best for all types of organisational situations. There may be some situations of crisis in which Theory X is more appropriate, but they may also be some situations (routine and formalised) in which it is less appropriate. In under-developed countries like India, Theory X is considered to be more useful at lower levels of the organisation. 

Conclusion:

With the above explanation, it can be concluded that neither Theory X nor Theory Y is best in all situations. Therefore, a mix of both theories should be used. In simple terms, an organisation should use the approach of motivation which is best suitable for a specific situation. Thus, the best approach to motivation is the contingency approach.