In the earlier days, when the concept of ‘Economic Man’ came into the picture. Some of the management gurus emphasized only on the satisfaction of physiological and safety needs of the employees of the firm. However, because of the changes in the value systems and social systems, higher order needs like psychological satisfactions, job enrichment, management by objectives, supportive management, etc has evolved for motivating the employees and also for better functioning of the organization.
Douglas McGregor introduced two theories called as Theory-X and Theory-Y based on the distinct views of human beings. He has given two pairs of assumptions about human beings which were implied by the actions of managers in the organization. McGregor considered Theory-X and Theory-Y as two perspectives of administration action.
The theory of Theory-X is based on the traditional approach to human behavior. This theory shows the autocratic leadership style of leadership based on that the workers must be persuaded and pushed for achieving performance. The assumptions that managers have in this theory are:
⦿ The people dislike work and they search for several reasons to avoid the work whenever possible.
⦿ This theory states that people are lazy and they must be controlled, threatened to punish to make them work.
⦿ The employees will try to avoid responsibilities and they have very little ambitions or goals to achieve.
⦿ Most of the employees of the organization are concerned with security above all other factors associated with work.
The theory of Theory-Y is a new approach to management. This approach emphasizes on co-operation between management and employees. This theory states that the individual goals and organizational goals don’t have conflict. This theory is mainly concerned with the satisfaction of high-level needs of the employees i.e psychological needs of the employee. The assumptions that managers have in this theory are:
⦿ The people love to work and they treat work as natural and enjoyable action.
⦿ Employees will maintain self-control and self-direction for achieving the set of objectives.
⦿ This theory states that if the people are provided with proper working conditions, they will learn to accept and seek responsibility.
⦿ All the people are capable of making innovative and creative decisions for the growth of oneself and the organization as well.
THEORY-XTHEORY-YTheory-X is negative, traditional and based on autocratic style of leadership Theory-Y is positive, participatory and based on the democratic style of leadership. AssumptionsTheory-X assumes that people are distasteful towards work and they don’t like to work.Theory-Y assumes that people like to work and they enjoy doing work. Emphasizes onTheory-X emphasizes that people don’t have ambitions and goals to excel in life.Theory-Y emphasizes that people have many aims and goals to grow in life. Motivation FactorAccording to Theory-X, the motivating factors of the people are lower needs such as physiological needs and safety needs.According to Theory-Y, the motivating factors of the people are higher order needs such as psychological needs, and also lower needs are also important. ResponsibilityTheory-X assumes that people don’t like to accept responsibilities and they avoid responsibilities.Theory-Y states that people are more interested in accepting responsibilities. CreativityTheory-X assumes that people have little capacity fo creativity and they are suited for routine work only.Theory-Y assumes that people are innovative and creative in all aspects. Leadership StyleTheory-X shows the autocratic leadership styles in the organization.Theory-Y shows the democratic and supportive leadership styles in the organization. SupervisionAccording to Theory-X, people lack self-motivation and they need to be continuously monitored and supervised to get maximum productivity out them.According to Theory-Y people are self-controlled and self-directed and they don’t need to be monitored by other people. Focused onTheory-X mainly focuses on scalar chain system and centralization of authority in the organization.Theory-Y mainly focuses on decentralization and greater participation in management decision making process.
Theory-X and Theory-Y represent two exact opposites of extremes. No person on this earth can belong to these extreme behaviors. Every human being possesses the qualities of both Theory-X and Theory-Y.
Though no generalizations can be made, still, it appears that Theory-X is more related to the unskilled workers and uneducated lower class workers whose main motive is to satisfy their physiological needs. Theory-Y is more related to the educated and skilled professional employees who understand their responsibilities and don’t require any force to control and direct them.