The X and Y Theory of Management by Douglas McGregor - Coursework Example

The X & Y Theory Introduction: The X and Y Theory of management was first proposed by the American psychologists Douglas McGregor in his 1960 book “The Human Side of the Enterprise”. The theory is based on Maslow’s hierarchy of needs. The basic principle of the theory is based on grouping of human needs into a “lower order” and a “higher order”. The needs in the lower order include the basic physiological needs of food, water, shelter and clothing and security needs and the need to belong. The higher order needs include the need for esteem and realizing the full potential. McGregor based his theory X on the lower order needs and the theory Y on the upper order needs. He suggested that either of the two theories can be used for management of people but theory Y was better than theory X. Although the theory has some limitations, it is considered a path breaking theory in the field of organizational behavior. These two diametrically opposite ways of managing people discuss two separate attitudes of mangers. The manger in the X-theory is the authoritarian type of manager while Y-theory manager is the participative type. The essay will go on to study the two theories in details. Assumptions: The X and Y theory are based on certain assumptions about basic human behavior. The assumptions of the Theory-X are as follows: Humans are lazy and dislike work. Because of this inherent dislike for work, most people have to be controlled and threatened to get them to do hard work. Most people do not like responsibility. Most people prefer to be directed. People have no ambition. People work only for money and security. People do not any interest in the organizational goals. Most people prefer status quo and resist change. Most people are easily influenced and are not very intelligent. The assumptions made by the Theory-Y include: People enjoy working and view it as natural as work and rest. Most employees are ambitious. When properly motivated, people are self-directed and committed to the goals of the organization. Job satisfaction is a good motivator. An average person not only wants responsibility but seeks it. People are imaginative and creative. People or a group of people use their ingenuity to solve work related problems Only partial potential of person is utilized in normal conditions. Theory X: Based on the above assumptions, theory-X advocates closely supervising employees and giving them set verifiable tasks. Theory-X promotes a hierarchical structure with tight controls at each level. In this theory, to get employees to do work and meet organizational goals, the manager needs to resort to an authoritarian approach and order or tell people what to do. The employees are not considered responsible or intelligent enough to know what is best for them and the organization and have to be told. In this theory, the management or the manager makes the decisions and passes them on to employees who must do what they are ordered to do without any questions. There opinion is not sought. Hard and Soft Management Styles: Theory X recommends two management styles: the soft approach and the hard approach. In the soft approach the manager is permissive and seeks harmony and expects employee cooperation. In the hard approach, manger resorts to coercion, threats, tight supervision and control to get the desired outcome. Neither of these two extremes of the X-theory is optimal and results in problems and frictions. In the hard approach, workers tend to get hostile and give low output intentionally. On the other hand, in the soft approach, workers are always making demands and asking for more rewards in return for a lower productivity. The reason for these problems is that assumptions made by Theory X are wrong. Problems with Theory X: The problems with the theory X can be found in Maslow’s hierarchy. We know from Maslow’s hierarchy of motivation that once an employees needs are satisfied, it is no longer a source of motivation. Since Theory X is restricted to the lower end of the hierarchy, these needs are easily satisfied. In Theory X, organizations try to motivate employees through money. Since money is a lower group need, once it is satisfied, workers are no longer motivated and this results in lower outputs. Higher productivity is seen when employees’ higher needs are met. McGregor had himself pointed out these problems with Theory X. According to him, in modern society, the basic lower level needs are already met and hence fail to motivate resulting in employees who dislike work, avoid responsibility and do not share organizational goals. Theory Y is the alternate theory which tries to address the problems of Theory X. Situations Where Theory X Gives Better Results: Despite all the problems with Theory X, certain situations and industry require that manager use the Theory X of management to get the desired results. On large shop floors and in mass production operations, it is not possible to include employees in the decision making process. In such organizations, Theory X better suited in order to give the results and for efficient operations. Also, not all employees have reached the level of maturity required for Theory Y style of management to be successful. In such cases, employees need tighter controls in order to reach desired goals. Theory Y: Theory Y believes that employees feel motivated to contribute towards the organizational goals if they are included in the decision making process. This belief is based the theory that when a person’s higher level needs of esteem and self actualization are met, they are completely satisfied and hence motivated to give better performance. The Theory Y approach of management should not be confused with the soft approach discussed earlier. Neither the soft approach nor the hard approach of theory X seeks to include employees in the decision making process. A theory Y manager believes that most people are motivated when they are satisfied with their job. That is, theory Y uses job satisfaction as the biggest motivator of employees. Employees can be satisfied with their jobs, if they are included in the decision making process, they can see the end results of their efforts, they are allowed to be creative and have the freedom to do their jobs without being bogged down by too many rules. Also, when employees see an opportunity to move ahead, they tend to be more diligent at their work. Theory Y advocates that mangers take a positive view of the employees and their capabilities. Implications of Theory Y: By successfully employing theory y, firms can motivate their employees and use their abilities for a variety of purposes. Some of the implications of theory Y listed on the NetMBA site are given below. Decentralization and Delegation: Decentralization will be result in more employees having more responsibilities, who in turn will further delegate these responsibilities for a more efficient management. Job Enlargement: When an employees responsibilities are increased, it broadens the scope of his hob, resulting in more variety at work and hence more job satisfaction. Participative Management: When employees are included in the decision making process, it taps their creative potential and gives them more control over their work environment, thus making them more motivated. Performance Appraisal: Instead of the reward and punishment style of theory X, theory Y advocates setting the objectives in advance, and including the employees in their performance appraisal, that is in the process of evaluating how well they have met their objectives. Situations Where Theory Y gives better results: As acknowledged by McGregor, Theory Y is better than Theory X. Yet, as seen above, there are situations where theory X is better. However, in most organizations, employees have already satisfied their basic low-level needs and are hoping to satisfy their needs for recognition, ego and self-worth. In these situations, theory Y is better in getting the desired results. Theory Y is better suited for managing employees who have higher education levels such as management graduates and professionals. Including these kind of employees in the decision making process also helps an organization find solutions to complex problems. So we see that in an organization, the Theory Y of management can used to manage the managers and supervisors while the Theory X can used to for managing the shop-floor workers. Thus together, the two theories give the ideal way of managing a large manufacturing oriented organization. Criticism of the Theory X & Y: The theory X and Theory Y represent two extremes of management styles while in the practical world most employees fall between these two extremes. McGregor himself acknowledged that his theories were not practical but believed that managers could be successful if they remembered that employees are better motivated if they feel responsible. Kopelman et al (2008) have pointed out that it categorizing a manager as having an either Theory X or theory Y mindset is an oversimplification of the management techniques since managers have different type of relationships with different employees. It is possible for manager to have a Theory X mindset for one group of employees and a Theory Y mindset for another group. Graham (1980) asserts that that assumptions made by Theory Y are difficult to create in a Theory X environment. He argues that attempting to implement theory Y management style in a Theory X organization can result in disasters. Conclusion: Thus, although Theory Y may be superior to Theory X, mangers have to be careful which theory they use in an organization and with a particular set of people within the organization. Just because theory Y had worked in one organization it is not necessary that it will work in another organization as well. Implementing Theory Y requires first taking all concerned persons in confidence and teaching them how Theory Y can be used successfully. Similarly, trying to implement a Theory X management style in a Theory Y environment can prove to be counterproductive. Professionals may not appreciate being ordered around and may actually revolt. So the best management theory depends and changes from organization to organization and from people to people and there is not set theory which can called a perfect theory for all circumstances. Works Cited Graham, Robert J. "On The Death of Theory Y." Interfaces 10.3 (June 1980): 76-79. Business Source Complete. EBSCO. 8 Oct. 2008 . Kopelman, Richard E., David J. Prottas, and Anne L. Davis. "Douglas McGregor's Theory X and Y: Toward a Construct-valid Measure." Journal of Managerial Issues 20.2 (Summer 2008): 255-271. Business Source Complete. EBSCO. 7 Oct. 2008 . “Theory X and Theory Y.” NetMBA Business Knowledge Center. Internet Center for Management and Business Administration, Inc. 7 Oct. 2008. Read More