Theory X and Theory Y of motivation was developed by Douglas McGregor at the MIT Sloan School of Management in the 1960s. He avoided descriptive labels and simply called the Theory X and Theory Y. He did not imply that workers would be one type or the other. Rather, he saw the two theories as two extremes - with a whole spectrum of possible behaviors in between.
Theory X: ('Authoritarian management' style)
Assumptions of Theory X:
Most people dislike work and will avoid it to the extent possible, therefore
They must be continually coerced, controlled, and threatened with punishment to get the work done, and that They have little or no ambition, prefer to avoid responsibility, and choose security above everything else.
The management implications for Theory X workers are that, to achieve organizational objectives, rewards of varying kinds are likely to be the most popular motivator.
Theory Y: ('Participative management' style)
Theory-Y believers create trust based firms with empowered employees.
Assumptions of Theory Y:
Physical and mental effort are natural and most people find work to be a source of satisfaction
They generally, on their own motivation, exercise self-control, self-direction, creativity, and ingenuity in pursuit of individual and collective goals, They either seek responsibility or learn to accept it willingly, and that Their full potentials not tapped in most organizations. These assumptions serve as powerful behavioral models reflected in the way an organization is structured.
The challenge for management with Theory Y workers is to create a working environment where workers can show and develop their creativity.
Comparing Theory X and Theory Y
Theory X assumes that people dislike work; they want to avoid it and do not want to take responsibility. Theory Y assumes that people are self-motivated, and thrive on responsibility.
Management Style and Control
In a Theory X organization, management is authoritarian, and centralized control is retained, whilst in Theory Y, the management style is participative: Management involves employees in decision making, but retains power to implement decisions.
Theory X employees tend to have specialized and often repetitive work. In Theory Y, the work tends to be organized around wider areas of skill or knowledge; Employees are also encouraged to develop expertise and make suggestions and improvements.
Rewards and Appraisals
Theory X organizations work on a ‘carrot and stick’ basis, and performance appraisal is part of the overall mechanisms of control and remuneration. In Theory Y organizations, appraisal is also regular and important, but is usually a separate mechanism from organizational controls. Theory Y organizations also give employees frequent opportunities for promotion.
Although Theory X management style is widely accepted as inferior to others, it has its place in large scale production operation and unskilled production-line work. Many of the principles of Theory Y are widely adopted by types of organization that value and encourage participation. Theory Y-style management is suited to knowledge work and professional services. Professional service organizations naturally evolve Theory Y-type practices by the nature of their work; Even highly structure knowledge work, such as call center operations, can benefits from Theory Y principles to encourage knowledge sharing and continuous improvement.