Douglas MacGregor Theory X and Theory Y The Human Side of Enterprise In his 1960 management book, The Human Side of Enterprise, Douglas McGregor suggested two very different management views on how employees behave and how to achieve employee motivation. He referred to these nearly opposite management approaches as Theory X and Theory Y. Both of these theories assume that management's role is to organize human resources - employees, in a way that maximises productivity. But how the two types of manager achieve this objective are very different. Theory X and Theory Y managers have completely different views of workers. If a manager has a Theory X approach to management , he will always set objectives for workers without consulting them, will give instructions without feedback and will punish or reward according to strict rules. In contrast, a manager who has a Theory Y view of workers will involve them in decision making, encourage feedback during communication and empower workers. Behaviour of Theory X Managers Theory X managers take the view that • Workers must be forced or controlled in work to do a good job • Workers prefer to be told what to do – supervised and instructed • Work is unpleasant to most people, who will attempt to avoid work whenever possible. • Most employees are not ambitious, have little desire for responsibility, and prefer to have simple, understandable tasks. • Motivation occurs only at the physiological and security levels of Maslow's Hierarchy of Needs – forget Hertzberg’s motivators Most workers have little capacity for creativity in solving problems. Applying Theory X Management – the business impact If Theory X managers are in charge, the a business is likely to use the principles of Taylors scientific management to control and ensure quality. So we would see: • • • • Motivation through financial means - even piece rate pay High levels of supervision Jobs broken down into simple tasks A strict hierarchy – each worker having clear understanding of their role • An authoritarian management Behaviour of Theory Y Managers Theory Y managers take the view that : • Workers learn to accept and seek responsibility • Workers will be self-directed and creative in their efforts to meet their work and organizational objectives. • Workers will be committed to quality and productivity objectives if rewards are in place that address higher needs such as selffulfilment. • The capacity for creativity spreads through all layers of the work place – everyone has something to contribute. Applying Theory Y Management – the business impacts If Theory Y managers are in control the organization is likely to use the principles of management more like Hertzberg's motivators to improve employee performance: • Decentralization and delegation - If firms decentralize control and reduce the number of layers of hierarchy, managers will have wider spans of control and will delegate some responsibility and decision making to them. • Job enlargement / enrichment/empowerment - Broadening the scope of an employee's job adds variety and opportunities to satisfy higher level needs like self fulfilment. Theory Y Management – the business impacts • Workers will be consulted during the decision making process, which motivates them and takes advantage of their creativity and problem solving skills and provides workers with more control over their work environment. • Performance Appraisals can be used to have each employee set their own objectives and take part in the process of evaluating how well they were met. .