Theory X and Theory Y by Douglas McGregor

Theory X and Theory Y are theories of human motivation created and developed by Douglas McGregor at the MIT Sloan School of Management in the 1960s that have been used in human resource management, organizational behavior, organizational communication and organizational development. They describe two contrasting models of workforce motivation. Douglas McGregor, an American social psychologist, proposed his famous X-Y theory in his 1960 book 'The Human Side Of Enterprise'.

McGregor's X-Y theory is a salutary and simple reminder of the natural rules for managing people, which under the pressure of day-to-day business are all too easily forgotten.

McGregor's ideas suggest that there are two fundamental approaches to managing people. Many managers tend towards theory x, and generally get poor results. Enlightened managers use theory y, which produces better performance and results, and allows people to grow and develop.

McGregor's ideas significantly relate to modern understanding of the Psychological Contract, which provides many ways to appreciate the unhelpful nature of X-Theory leadership, and the useful constructive beneficial nature of Y-Theory leadership.

Theory X and Theory Y represent two sets of assumptions about human nature and human behavior that are relevant to the practice of management. Theory X represents a negative view of human nature that assumes individuals generally dislike work, are irresponsible, and require close supervision to do their jobs. Theory Y denotes a positive view of human nature and assumes individuals are generally industrious, creative, and able to assume responsibility and exercise self-control in their jobs. One would expect, then, that managers holding assumptions about human nature that are consistent with Theory X might exhibit a managerial style that is quite different than managers who hold assumptions consistent with Theory Y..

Theory x ('authoritarian management' style)

• The average person dislikes work and will avoid it he/she can.
• Therefore most people must be forced with the threat of punishment to work towards organizational objectives.
• The average person prefers to be directed; to avoid responsibility; is relatively unambitious, and wants security above all else.

Theory y ('participative management' style)

• Effort in work is as natural as work and play.
• People will apply self-control and self-direction in the pursuit of organizational objectives, without external control or the threat of punishment.
• Commitment to objectives is a function of rewards associated with their achievement.
• People usually accept and often seek responsibility.
• The capacity to use a high degree of imagination, ingenuity and creativity in solving organizational problems is widely, not narrowly, distributed in the population.
• In industry the intellectual potential of the average person is only partly utilized.