Organisational behaviour

Motivation: Theory X and Theory Y

Theory X and Theory Y represent differing perspectives on human motivation

Theories X and Y represent opposing viewpoints on human motivation. According to Theory X, individuals are essentially lazy and do not want to work. You must pay them and relate their salary directly to their output in order to ensure that they do a decent job. According to Theory Y, people enjoy working because they desire to improve themselves and do a good job. It is less vital to pay people well than to provide them with a dynamic working environment.

When to use it

● Understand what makes people tick and how to better manage them.
● Create occupations that bring out the best in people.
● Create an effective compensation or incentive structure.

Origins

In the 1950s, Douglas McGregor worked at MIT alongside other renowned management thinkers such as Ed Schein and Kurt Lewin as a social psychologist. In his classic book, The Human Side of Enterprise, he presented his ideas. He was shocked by how many firms handled their employees like cogs in a machine, and he believed that a new perspective, based on people's natural desire to do a good job, needed to be developed.

In essence, Theory X was the 'poor old style of functioning' that was labeled as'scientific management' in the 1920s. McGregor proposed Theory Y as an alternative, more humane approach. His work relied on Abraham Maslow's earlier concepts, which proposed that persons had a hierarchy of wants, ranging from basic physiological necessities and safety through love, esteem, and self-actualization.

What it is

In the workplace, there are two primary perspectives on human nature. According to Theory X, individuals are naturally unmotivated and despise working, thus managers must give extensive oversight to guarantee that employees complete their tasks. This entails, for example, close supervision and a large dependence on incentives, such as monetary awards for performing tasks and punishments for those who shirk or make mistakes.

Employees are innately motivated to work, according to Theory Y, and will naturally do a good job if given the correct opportunities. Managers, in this worldview, have a very restricted role: their goal is to establish what has to be done, provide help as needed, and then get out of the way. In a Theory-Y world, responsibility is primarily with people who do the work, but in a Theory-X world, responsibility is with the managers who supervise the work. Which hypothesis is correct? They're both partially correct, though. The reality is that people's motivations vary greatly, ranging from primarily money (Theory X) on one end of the spectrum to the joy of working (Theory Y) on the other. Companies can develop management styles and incentive systems to match the various drivers by understanding where employees fall on this spectrum.

Many factories, call centers, and fast-food operations, for example, employ a Theory-X model, whereas many professional services firms, R&D firms, and start-ups use a Theory-Y model.

Although Theory X/Theory Y is the most well-known paradigm in the field of human motivation, research in this area has progressed. Self-determination theory (see ## Further Reading) is a recent extension.

How to use it

Theory X/Theory Y is a way of looking at the world, not a tool that can be used right away. As a result, there are numerous applications.

You can use it to figure out what makes a person tick — what circumstances cause them to work long hours – on an individual level. Some people follow Theory X and are motivated primarily by a desire to make money; others follow Theory Y and are motivated by the possibility to work with fascinating colleagues or to acquire the respect of those around them. You'll know which of your team members' buttons to press if you can determine the relative importance of these distinct drivers for them, and you'll be able to manage them much better.

Theory X/Theory Y underpins many of the fundamental decisions a corporation makes regarding how work is done at the organizational level. Do you, for example, employ a strong command-and-control approach (Theory X) or do you empower your employees and encourage them to participate in decision-making (Theory Y)? Is your incentive system based on the success of the entire team or organization (Theory Y), or does it reward individuals for specific outputs? The theory you choose should have self-reinforcing characteristics. If you construct an organization utilizing Theory-X ideas, for example, individuals will be forced to work in a restricted, goal-oriented manner. There is no apparent right or wrong in this situation. Rather, you should begin by determining what the correct theory is for your organization, and then structure and incentive systems should be built in accordance with that theory.

Top practical tip

While it's easy to dismiss Theory X and Theory Y as diametrically opposed perspectives, the truth is that they're both partially correct. Money motivates us all to some extent, just as doing a good job for its own reason motivates us all to some extent.

It makes sense to strive to make Theory Y work since it is an intrinsically more productive and motivating worldview. If you're in charge of a group of employees, for example, try to give them room to make their own decisions and take responsibility for their actions. Rather than telling people what to do, look for methods to help and encourage them. Instead than rewarding employees just on the basis of outputs, try rewarding them for effort or on a communal basis. Doing these things is difficult, but it may also be extremely gratifying. Remember that if this technique fails, you can always fall back on Theory X.

Top pitfall

Whatever business approach you follow, you run the danger of causing unfavorable side effects.

If you operate in an organization that follows the Theory-X management style, you risk generating a hostile and suspicious environment. Many unionized enterprises have fallen into this trap, causing dissatisfaction among both employees and managers.

If you work for a company that follows the Theory-Y management style, the atmosphere is likely to be lot more upbeat, but you risk losing control and coherence. Some employees may try to take advantage of you as a Theory Y manager by overspending on travel or taking long lunch breaks, for example.