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, and organizational development. They describe two very different attitudes toward workforce motivation. McGregor felt that companies followed either one or the other approach. Douglas McGregor (1906 - 1964) was a Management professor at the MIT Sloan School of Management whose 1960 book The Human Side of Enterprise had a profound influence on management practices. ... The MIT Sloan School of Management is one of the five schools of the Massachusetts Institute of Technology, located in Cambridge, Massachusetts, USA. It is one of the worlds leading business schools, conducting research and teaching in finance, entrepreneurship, marketing, strategic management, economics, organizational behavior, operations management, supply chain... Human resource management (HRM) is the strategic and coherent approach to the management of an organizations most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business. ... Organizational Studies (also known as Industrial Organizations, Organizational Behavior and I/O) is a distinct field of academic study which takes as its subject organizations, examining them using the methods of economics, sociology, political science, anthropology, and psychology. ... The field of organization development (OD) has had several definitions. ...

Theory X

In this theory, management assumes employees are inherently lazy and will avoid work if they can. Because of this, workers need to be closely supervised and comprehensive systems of controls developed. A hierarchical structure is needed with narrow span of control at each level. According to this theory, employees will show little ambition without an enticing incentive program and will avoid responsibility whenever they can. A term originating in military organization theory, but now used more commonly in business management, particularly human resource management, span of control describes the number of subordinates that report to each manager (or to each military officer). ...

The Theory X manager tends to believe that everything must end in blaming someone. He or she thinks all prospective employees are only out for themselves. Usually these managers feel the sole purpose of the employees interest in the job is money. They will blame the person first in most situations, without questioning whether it may be the system, policy, or lack of training that deserves the blame. Employment is a contract between two parties, one being the employer and the other being the employee. ...

Furthermore, Theory X supervisors cannot trust any employee, and they reveal this to their support staff via their communications constantly. A Theory X manager can be said to be an impediment to employee morale and productivity.

Managers that subscribe to Theory X, tend to take a rather pessimistic view of their employees. A Theory X manager believes that his or her employees do not really want to work, that they would rather avoid responsibility and that it is the manager's job to structure the work and energize the employee. The result of this line of thought is that Theory X managers naturally adopt a more authoritarian style based on the threat of punishment. he is the best in the world, some call him the junior jose, special 1 version 2 ... Pessimism, generally, describes a belief that things are bad, and tend to become worse; or that looks to the eventual triumph of evil over good; it contrasts with optimism, the contrary belief in the goodness and betterment of things generally. ... Employment is a contract between two parties, one being the employer and the other being the employee. ... The term authoritarian is used to describe an organization or a state which enforces strong and sometimes oppressive measures against the population, generally without attempts at gaining the consent of the population. ...

One major flaw of this management style is it is much more likely to cause Diseconomies of Scale in large businesses. Theory Y allows a business to expand while making more profit because factory-floor workers have their own responsibilities. The rising part of the long-run average cost curve illustrates the effect of diseconomies of scale. ...

Theory Y

In this theory management assumes employees may be ambitious, self-motivated, anxious to accept greater responsibility, and exercise self-control, self-direction, autonomy and empowerment. It is believed that employees enjoy their mental and physical work duties. It is also believed that if given the chance employees have the desire to be creative and forward thinking in the workplace. There is a chance for greater productivity by giving employees the freedom to perform at the best of their abilities without being bogged down by rules.

A Theory Y manager believes that, given the right conditions, most people will want to do well at work and that there is a pool of unused creativity in the workforce. They believe that the satisfaction of doing a good job is a strong motivation in and of itself. A Theory Y manager will try to remove the barriers that prevent workers from fully actualizing themselves . For other uses of Creativity, see Creativity (disambiguation). ...

Many people interpret Theory Y as a positive set of assumptions about workers. A close reading of The Human Side of Enterprise reveals that McGregor simply argues for managers to be open to a more positive view of workers and the possibilities that this creates.

McGregor and Maslow's hierarchy

McGregor's work was based on Maslow's hierarchy of needs. He grouped Maslow's hierarchy into "lower order" (Theory X) needs and "higher order" (Theory Y) needs. He suggested that management could use either set of needs to motivate employees. Maslows hierarchy of needs is a theory in psychology that Abraham Maslow proposed in his 1943 paper A Theory of Human Motivation,[1] which he subsequently extended to include his observations of humans innate curiosity. ...

Criticisms

Today the theories are seldom used explicitly, largely because the insights they provided have influenced and been incorporated by further generations of management theorists and practitioners. More commonly, workplaces are described as "hard" versus "soft." Taken too literally any such dichotomy including Theory X and Y seem to represent unrealistic extremes. Most employees (and managers) fall somewhere in between these poles. Naturally, McGregor was well aware of the heuristic as opposed to literal way in which such distinctions are useful. Theory X and Theory Y are still important terms in the field of management and motivation. Recent studies have questioned the rigidity of the model, but McGregor's X-Y Theory remains a guiding principle of positive approaches to management, to organizational development, and to improving organizational culture. The field of organization development (OD) has had several definitions. ... Organizational culture, or corporate culture, comprises the attitudes, experiences, beliefs and values of an organization. ...

Further reading

• Theory Z - a later work/organizational motivation theory which is likely derivative of Theory Y

Mnemotechnic for Theory X and Theory Y