Douglas McGregor who set forth in his book “Human Side of Enterprise” two pairs of assumptions about human beings which he thought were implied by the actions of autocratic and permissive managers. The first set of assumptions is contained in “Theory X” and the second set of assumptions in “Theory Y”. It is important to note that these sets of assumptions were not based on any research, but is intuitive deductions.
Theory X:
Theory X’ believes that autocratic managers often make the following assumptions about their subordinates. Accordingly, the subordinate in general:
(i) Has an inherent dislike for work and will avoid it, if he can;
(ii) Is lazy and avoids responsibility.
(iii) Is indifferent to organisational goals; and
(iv) Prefers to be directed, wishes to avoid responsibility, has relatively little ambition and wants security above all.
According to McGregor, this is a traditional theory of what workers are like and what management must do ot motivate them. Workers have to be persuaded and pushed into performance. This is management’s task. Management can offer rewards to a worker who shows higher productivity and can punish him if his performance is below standard. This is also called ‘carrot and stick’ approach to motivation. It suggests that threats of punishment and strict control are the ways to control the people. McGregor questioned the assumptions of Theory X, which followed carrot and stick approach to motivation of people and suggested autocratic style of leadership. He felt that management by direction and control is a questionable method for motivating such people who’s physiological and safety needs have been satisfied and whose social esteem and self-actualization needs are becoming important. For such people, Theory Y seems to be applicable.
Theory Y:
Managers with Theory Y orientation make the following assumptions about their subordinates. Accordingly, the subordinate in general:
(i) Does not inherently dislike work. Depending upon controllable conditions, work may be a source of satisfaction or a source of punishment;
(ii) Will exercise self-direction and self-control in the service of objectives to which he is committed;
(iii) Commitment to objectives is a function of the rewards associated with their achievement;
(iv) Learns under proper conditions, not only to accept, but also to seek responsibility; and
(v) The capacity to exercise a relatively high degree of imagination, ingenuity and creativity in the solution of organisational problems is widely, not narrowly, distributed in the population.
Theory Y assumes that goals of the organisation and those of the individuals are not necessarily incongruent. The basic problem in most of the organisations is that of securing commitment of workers to organisational goals. Worker’s commitment is directly related to the satisfaction of their needs. Thus, this theory places great emphasis on satisfaction of the needs, particularly the higher once, of the employees. It does not rely heavily on the use of authority as an instrument of command and control. It assumes that employees exercise self-direction and self-control in the direction of the goals to which they feel themselves committed. They could be motivated by delegation of authority, job enlargement, and management by objectives and participative management practices.
Application of Theory X and Theory Y:
Theory X and theory Y represent two extremes to draw the fencing within which the organisational man is seen to behave. No man would belong completely to either theory X or theory Y. each person possesses the traits of both in varying degrees under different situations. Thus, these theories are important tools in understanding the behaviour of human beings and in designing the incentive schemes to motivate the employees. Neither of the two sets of assumptions is applicable fully in all situations and to all types of people.
It has been noted that theory X is more applicable to unskilled and uneducated lower-level workers who work for the satisfaction of their basic needs of food, clothing and shelter. Theory Y seems to be more applicable to educated, skilled and professional employees who understand their responsibility and are self-controlled. However, there can be exceptions. A lower-level employee may be more responsible and mature than a well-qualified higher-level employee. The examples of highly placed employees in modern organisations shirking responsibility are not uncommon. Therefore, the management should use an amalgamation of both the theories to motivate different employees.
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