Introduction: 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 communicationand organizational development. They describe two contrasting models of workforce motivation. Theory X and Theory Y have to do with the perceptions managers hold on their employees, not the way they generally behave. It is attitude not attributes. Douglas McGregor, an American social psychologist, proposed his famous X-Y theory in his 1960 book 'The Human Side Of Enterprise'. Theory x and theory y are still referred to commonly in the field of management and motivation, and whilst more recent studies have questioned the rigidity of the model, Mcgregor's X-Y Theory remains a valid basic principle from which to develop positive management style and techniques. McGregor's XY Theory remains central to organizational development, and to improving organizational culture. 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: In this theory, management assumes employees are inherently lazy and will avoid work if
they can and that they inherently dislike work. As a result of this, management believes that workers need to be closely supervised and comprehensive systems of controls developed. A hierarchical structure is needed with narrow span of control at each and every level. According to this theory, employees will show little ambition without an enticing incentive program and will avoid responsibility whenever they can. According to Michael J. Papa, if the organizational goals are to be met, theory X managers rely heavily on threat and coercion to gain their employees' compliance. Beliefs of this theory lead to mistrust, highly restrictive supervision, and a punitive atmosphere. 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 employee's 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. 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. One major flaw of this management style is it is much more likely to causediseconomies of scale in large business.

Theory y: In this theory, management assumes employees may be ambitious and selfmotivated and exercise self-control. It is believed that employees enjoy their mental and physical work duties. According to them work is as natural as play. They possess the ability for creative problem

solving, but their talents are underused in most organizations. Given the proper conditions, theory Y managers believe that employees will learn to seek out and accept responsibility and to exercise selfcontrol and self-direction in accomplishing objectives to which they are committed. A Theory Y manager believes that, given the right conditions, most people will want to do well at work. They believe that the satisfaction of doing a good job is a strong motivation. Many people interpret Theory Y as a positive set of beliefs about workers. A close reading of The Human Side of Enterprise reveals that McGregor simply argues for managers to be opened to a more positive view of workers and the possibilities that this creates. He thinks that Theory Y managers are more likely than Theory X managers to develop the climate of trust with employees that is required for employee development. It's employee development that is a crucial aspect of any organization. This would include managers communicating openly with subordinates, minimizing the difference between superior-subordinate relationships, creating a comfortable environment in which subordinates can develop and use their abilities. This climate would be sharing of decision making so that subordinates have say in decisions that influence them.

Theory X and Theory Y In response to the two sides of the debate around employee motivation and the best ways to boost productivity, Douglas McGregor argued that managers would tend to pursue the approach which was most in line with their view of their employees. He claimed that managers who viewed their employees as lazy would be more likely to follow an approach based on control, whilst managers who believed the workers could be motivated and wanted to develop themselves would be more likely to attempt to create positive working environments and opportunities for advancement. McGregor referred to these theories as theory X and theory Y. It is important to note that, in contrast to popular opinion, McGregor did not state the theory Y was preferable to theory X, rather he held that both views had merit, and managers should not have too narrow a view of motivation. As such, he believed that scientific management approaches could benefit from focusing on the need to motivate workers, whilst motivational approaches could also benefit from greater managerial control. As such, he argued that theory X and theory Y simply represented different ends of a continuum of approaches to improving productivity, and managers should not fix themselves to one end of the continuum. Both theory X and theory Y state that managers are responsible for assembling and organising the various factors of production, including their employees, with the goal being to produce maximum economic benefit for the shareholders. However, they take different views around the drivers of employee behaviour. Theory X (steel mill in Pakistan) According to theory X, the average employee is lazy, does not like to work, and will attempt to avoid having to work as much as possible. They also have no ambition or responsibility, and do not care about the performance of the organisation. As such, they will tend to resist any organisational change, and not be particularly innovative or intelligent, only working because they have to in order to have money and security. However, it also holds that they are quite gullible and easy to manipulate. As a result, managers who follow a theory X approach can try to take a hard, controlling approach or a soft persuasive approach. The hard approach depends on tight managerial controls and close supervision, such as proposed by scientific management, whilst also using coercion and implicit threats to prevent any soldiering. In contrast, the soft approach looks to manipulate employees with money and low levels of supervision, in an attempt to acquire employee cooperation and reasonable levels of productivity. Unfortunately, the hard approach will tend to generate hostility and resistance, whilst the soft approach will lead to workers requesting greater levels of rewards whilst working as little as possible. McGregor felt that most firms tried to use some aspect of both of these approaches, but neither were very successful. The reason for this is that McGregor claimed that theory X would only ever focus on low level needs such as security. As such, whilst the threat of removing security, in the form of pay cuts or potential sackings, would only motivate an employee to a certain level. As such, whilst following a Theory X approach would be better than following no approach, it will never satisfy high level needs, and employees will not be motivated by their work. Instead, they will look for more money and rewards to compensate, thus allowing them to fulfil their social and esteem needs outside of work. Therefore, employees will never satisfy their high level needs through work, and thus will never work to their maximum productivity. In addition, McGregor argued that modern developed societies, with their abundant and cheap food, high tax rates and social safety nets, already satisfied most of the physiological and security needs of people. This meant that providing monetary rewards and punishments would not motivate staff as their discomfort at being controlled would outweigh the monetary benefits. As such, employees under theory X will tend to dislike their work and take no interest in the goals of the organisation, thus fulfilling the assumptions made under the

theory. As such, McGregor argued that theory X was a self fulfilling prophecy, and that managers who followed it would end up demotivating even the most intrinsically motivated workforce. Theory Y In contrast to theory X, theory Y assumes that working can be made as natural to people as play and rest. As such, people will motivate themselves to fulfil their work objectives, provided they commit to them, and they feel they will fulfil higher needs by achieving them. In addition, if these conditions can be fulfilled, people will seek additional challenges and responsibility, and will handle them well because humans are naturally creative and innovative: their talents just need to be encouraged in their work. The most important aspect of theory Y is that it focused on the cycle of managers providing interesting work, which motivates employees to achieve, which allows managers to provide them with more interesting and challenging work, thus fulfilling the higher level esteem needs, and allowing people to approach self actualisation in their work. As self actualisation is a continually evolving need, it will thus continue to motivate employees throughout their working lives. This allows managers to align employees personal goals with the goals of the organisation, by allowing the employee to fulfil their needs as the organisation succeeds. For example, a firm can decentralise its control structure, providing employees with more responsibility and harnessing more of their skills to drive success. Companies can also consult employees as part of the planning and decision making processes, giving the employees input into the organisations success whilst benefitting from the employees creativity. Participative performance appraisals are also often used in theory Y, as when employees participate in setting and monitoring their objectives, they are more likely to strive to reach them. If such a system can be properly implemented, it would result in very high levels of motivation, with employees working ever harder as their personal needs develop and their job develops to satisfy them. However, Theory Y management cannot be seen as a soft approach as it is easy for employees to manipulate the system by pretending to be demotivated and hiding their true motivations. Indeed, McGregor argued that some employees may not have developed sufficient emotional maturity to embrace a Theory Y style of management, and may believe the managers are trying to manipulate them or are being weak. As such, managers may need to develop an initial system of control for employees, and relax that system as the employee matures and develops.

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