McGregor’s Theory X and Theory Y. How to understand employee motivations?

McGregor’s Theory X and Theory Y – two theories and two completely different approaches that have one aspect in common: the vital role of the manager in the company. They assume managers have real influence on the way teams are organized, managed and motivated. What do these opposing theories hold, and how can they help in understanding the workings of employee motivation? Read on to find out!

What is McGregor’s Theory X and Theory Y?

McGregor’s Theory X and Theory Y was developed by Douglas McGregor and described in detail in the 1960s. During his observations, he noted that managers could be grouped according to two approaches regarding the management of employee motivation.

While in principle he leaned more towards the fact that there was a more significant benefit in using Theory Y, he also believed that some employees needed tighter control at the beginning and the use of approach X, which over time could be loosened up a bit more and smoothly transition into Theory Y. However, to better understand what both approaches are about, let’s see them in a nutshell first.

Theory X

Theory X assumes the view that managers hold that people’s main motivation is money and that employees are inherently lazy and unambitious, so they require strict guidance and generally prefer to be controlled because then they don’t have to be creative. In addition, Theory X stipulates that:

• The only way to encourage is through a tempting incentive program
• The main goal of employees is to make money
• Employees are selfish and think only of their own needs, not the benefits of the organization
• Employees don’t like change and will resist it on principle
• Effective management requires close supervision and an efficient control system
• Higher-order needs don’t matter

Image of a manager applying Theory X

Managers who follow Theory X believe that the only way to motivate employees is to control them tightly They often blame workers for failures and do not look for a way to change, for example, through training or filling in missing knowledge.

They display a hard-line management style and believe that the manager’s job is to organize tasks and that threats of punishment are the only way to stimulate employees.

Theory Y

Theory Y’s main premise is that employees enjoy their work, are inherently ambitious and need to pursue self-development. Higher-order needs are important to them, just like greater freedom that allows for better productivity. In addition, Theory Y assumes the following:

• Delegating and increasing responsibilities is a growth opportunity
• Employees have the capacity for self-control and self-direction
• Employees are creative and want to achieve more
• Rigid rules block employee development and kill creativity
• Employees are responsible and do not require constant supervision

Image of a manager applying Theory Y

The managers holding Theory Y belief have a slightly more enthusiastic approach to employees and believe that workers want to develop and their primary motivation is not money or self-interest. They have the good of the organization in mind, and a huge motivation for them is the satisfaction of a job well done and the opportunity to learn new skills.

Why are the premises of McGregor’s Theory X And Theory Y flawed, and why will their rigid application not benefit the organization?

On the one hand, control and a pessimistic view of the employee, on the other a large dose of trust and faith in people. Two contradictory approaches whose assumptions are so extreme. But why does it make little sense to apply both theories literally?

First, generalizing and treating the collective in the same way never works. In any organization, there will be both very ambitious employees who do not need much encouragement to work, and hard direction and strong control will hurt them, and those who cannot imagine functioning without it and feel and function better under rigid rules.

It would seem that the ideal solution is to combine the two theories and apply them according to employee observation. However, McGregor believed that the basis of Theory X was flawed because of its core notion. Why? He believed that rewards and monetary benefits, i.e., satisfying a lower-order need, are not a good motivation because it is not a continuous need.

Once it is satisfied, employee motivation disappears. The only way to maintain it is to introduce an enticing system of salary increases or monthly bonuses, which could be considered a way to turn temporary motivation into a continuous one.

What other basic assumptions of Theory X can lead to limitations? For many employees, the atmosphere in the workplace is important, and a rigid management style can lead to disrupted relationships, misunderstandings and tensions. This, in turn, can translate into insecurity among employees, thereby nullifying their creativity.

When their self-confidence is disturbed and fear is the dominant emotion, they will perform only the bare minimum for fear of public punishment. The assumption is that managers or supervisors have a lot of power and are responsible for making the final decisions. However, this way of management is not always the best. Often employees have a lot to say, and their insights are accurate and can translate into benefits for the entire organization.

While McGregor appreciated Theory Y for its approach to employees and believed that respect and a good atmosphere in the workplace can do a lot of good (which, for the rest, is entirely correct), not all of its assumptions will work in all circumstances. In addition to what we’ve already mentioned, i.e., the recognition that the entire collective has the same motivations and will react in the same way to a particular management style, there are still several of its limitations.

Firstly, rigid application of this principle can lead to employees abusing their power, becoming sluggish and putting their interests above the good of the organization. In addition, some employees even require control and are more effective when someone sets boundaries and norms for them. They feel more secure when they receive top-down guidance and their work is controlled at certain times.

What’s more, adopting this method can lead managers to take on certain tasks instead of delegating them further to develop employees. They do so for their benefit, as it’s convenient and they get rid of their responsibilities.

Does this mean that McGregor’s Theory X and Theory Y makes no sense?

Seeing McGregor’s Theory X and Theory Y in black and white make little sense, yet it doesn’t mean that all its assumptions are wrong. McGregor’s Theory X and Theory Y should be taken as guidelines, basics and adapted to one’s own needs. As a rule, some assumptions of Theory X work well for less experienced employees who are just beginning their development and career, and the best method of learning for them is when taken with a pinch of salt. This solution is ideal for employees whose rigid rules allow them to function correctly and help them achieve their goals.

In contrast, Theory Y, or at least some of its assumptions, will work well for experienced professionals who know their value and need a lot of freedom to spread their wings. Restricting them and putting them into a rigid framework can demotivate and crush them.

There are lessons to be learned from these assumptions. Still, the foundation of good team management is the recognition that every employee is different and no single method will always be effective for the collective.

How to understand employee motivation and what method should we apply to make it most beneficial?

The task of a manager or supervisor should not only be to delegate responsibilities, but also to carefully observe the behavior of employees and be able to analyze it, and then introduce an appropriate management style following their needs. Sometimes this will require more flexibility and getting out of the rigid framework of a particular Theory.

The basis for understanding employee motivation is to define the problem the team is facing and try to find the element that needs to be improved. Perhaps inefficiency and demotivation are due to a lack of incentives, but it could also indicate an internal conflict in the organization or a lack of knowledge. Such an analysis will help define the needs and desires of the team, as well as help select a specific work style. Pulling some elements from both McGregor’s Theory X and Theory Y may be necessary, and perhaps even introducing other rules.

Nonetheless, introducing changes does not mean the end of the process. Not always the first attempt is good and will bring the expected result, which is why it is so important to control and monitor the changes.

If you notice that the work of the team becomes more efficient and employees are more willing and motivated to work, it implies that the changes you have implemented are having the desired effect. If not, it is necessary to start the process over again and perhaps pay more attention to the first step, i.e., defining the problem.

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Author: Nicole Mankin

HR manager with an excellent ability to build a positive atmosphere and create a valuable environment for employees. She loves to see the potential of talented people and mobilize them to develop.

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