• Understand the difference between Theory X, Theory Y, and Theory Z managers
• Understand how managers’ attitudes affect worker motivation

Manager’s Perceptions of Employees

The idea that a manager’s attitude has an impact on employee motivation was originally proposed by Douglas McGregor, a management professor at the Massachusetts Institute of Technology. In his 1960 book, The Human Side of Enterprise, McGregor proposed two theories by which managers perceive and address employee motivation. He referred to these opposing motivational methods as Theory X and Theory Y management. Each assumes that the manager’s role is to organize resources, including people, to best benefit the company. However, the attitudes and assumptions of the X and Y managers are quite different.

Theory X

The Theory X management style is based on a pessimistic view of human nature and assumes the following:

• The average person dislikes work and will avoid it if possible.
• Because people don’t like to work, they must be controlled, directed, or threatened with punishment to get them to make an effort.
• The average person prefers to be directed, avoids responsibility, is relatively unambitious, and wants security above all else.

This view of people suggests that managers must micro-manage workers by constantly prodding them to perform and closely controlling their on-the-job behavior. Theory X managers tell people what to do, are very directive, like to be in control, and show little confidence in employees. They often foster dependent, passive, and resentful subordinates.

McGregor makes the point that a command-and-control environment is not effective because it relies on lower needs for motivation, but in modern society those needs are mostly satisfied and thus are no longer motivating. In this situation, one would expect employees to dislike their work, avoid responsibility, have no interest in organizational goals, resist change, etc.—creating, in effect, a self-fulfilling prophecy. To McGregor, a steady supply of motivation seemed more likely to occur under Theory Y management.

Theory Y

The higher-level needs of esteem and self-actualization are ongoing needs that, for most people, are never completely satisfied. As such, it is these higher-level needs through which employees can best be motivated. In contrast, Theory Y management makes the following assumptions:

• Work is as natural as play or rest. People want to and can be self-directed and self-controlled and will try to achieve organizational goals they believe in.
• Workers can be motivated using positive incentives and will try hard to accomplish organizational goals if they believe they will be rewarded for doing so.
• Under proper conditions, the average person not only accepts responsibility but seeks it out. Most workers have a relatively high degree of imagination and creativity and are willing to help solve problems.

Managers who operate on Theory Y assumptions recognize individual differences and encourage workers to learn and develop their skills. An administrative assistant might be given the responsibility for generating a monthly report. The reward for doing so might be recognition at a meeting, a special training class to enhance computer skills, or a pay increase. In short, the Theory Y approach builds on the idea that worker and organizational interests are the same.

It is not difficult to find companies that have created successful corporate cultures based on Theory Y assumptions. In fact, Fortune’s list of “100 Best Companies to Work For” and the Society for Human Resource Management’s list of “Great Places to Work” are full of companies that operate using a Theory Y management style. Starbucks, J. M. Smucker, SAS Institute, Whole Foods Market, and Wegmans are all examples of companies that encourage and support their workers. Genencor, a biotechnology firm listed on America’s Best Places to Work five times, has a culture that celebrates success in all aspects of its business. Employees can reward colleagues with on-the-spot awards for extraordinary effort. According to the company’s former CEO, Robert Mayer, “Genencor is truly unique among U.S. companies of any size. It is a model for innovation, teamwork, and productivity—and a direct result of our ‘work hard, play hard, change the world’ philosophy. Investing in our employees has always been good business for Genencor.”^[1]

X vs. Y managers

• Theory X managers believe that employees avoid work and need constant supervision.
• Theory Y managers believe that employees are self-motivated and can be trusted to take initiative and responsibility for their work.

Management Implications

If Theory Y holds true, an organization can apply the following principles of scientific management to improve employee motivation:

• Decentralization and delegation: If firms decentralize control and reduce the number of levels of management, managers will have more subordinates and consequently need to delegate some responsibility and decision making to them.
• Job enlargement: Broadening the scope of an employee’s job adds variety and opportunities to satisfy ego needs.
• Participative management: Consulting employees in the decision-making process taps their creative capacity and provides them with some control over their work environment.
• Performance appraisals: Having the employee set objectives and participate in the process of self-evaluation increases engagement and dedication.

If properly implemented, such an environment can increase and continually fuel motivation as employees work to satisfy their higher-level personal needs through their jobs.

---