McGregor’s X and Y Theories: Definition, Example & Limitation

McGregor’s X and Y Theories was developed by social psychologist Douglas McGregor in the 1960s. He established the two contrasting theories to understand a manager’s beliefs regarding employee motivation and its effect on management style. 

What Is The McGregor X and Y Theories?

McGregor’s X and Y Theories are contrasting theories that depict two different aspects of human behavior at work. 

Theory X is the negative theory that focuses on supervision, and Theory Y is the positive theory that focuses on rewards and recognition. Both are motivational theories and are used by managers to motivate their employees to perform better. 

What is Theory X?

Theory X is an authoritative approach to motivating employees where the manager has a pessimistic opinion about their team members. Managers believe employees are not motivated because they dislike the work. 

Therefore, they have to motivate their employees with a carrot and stick approach. The approach focuses on persuading employees to complete work by motivating them with incentives and punishing them if they cannot complete the task. 

Managers follow their team members until they complete the task.  

Assumptions of Theory X

1. Most human beings are not very fond of working and will avoid completing a task. Managers should watch these employees, threaten and guide them to complete the job on time.
2. Necessary rewards upon task completion can be given to keep employees motivated. 
3. Average employees always seek direction as they are lazy. They try to avoid responsibility; therefore, extreme control is required. 
4. Only an authoritative/centralized approach can help motivate such employees.

Characteristics of Workers in Theory X

• Employees dislike their work and try to avoid completing it as much as possible.
• Employees delay work until the deadline.
• Employees in lack ambition and responsibility towards their work.
• Employees demand high centralization and control from their managers.
• Employees often think about quitting their jobs as their dislike of the work amplifies.

Limitations of Theory X 

• Not all employees can work in strict and controlled environments; it can decrease productivity.
• An authoritative management style can hamper employee learning, building, and development. 
• Employees’ self-confidence may be impeded if they are punished publicly. 
• This theory creates a negative environment that instills fear, underconfidence, and insecurity. 
• The financial incentive does not motivate all employees. Therefore, it often cannot push employees to perform better. 
• The theory assumes that employees are lazy and cannot make decisions. This is an incorrect collective assumption. 
• Theory X provides high power to the superiors; it is biased as it does not consider employee recognition and development. 

Example of Theory X

Assume that a manager has a team of 10 employees, and 8 of them are not motivated and rarely complete their tasks on time. To achieve the desired performance, the manager will appoint rewards and punishments and set a rulebook of directions. 

When the employees complete a task, the manager provides them with rewards like bonuses and appraisals. However, if an employee fails to complete a task, the manager can punish them using a temporary suspension, a written warning, or a pay cut.

What is Theory Y?

Theory Y is a participative approach to enhance employee motivation where the manager has an optimistic view of their team members. Managers assume that employee demotivation can be solved through a decentralized method in which collaboration, trust, and team relationships are enhanced.

This theory contradicts Theory X; in this approach, managers believe that control does not motivate employees. Instead, self-actualization, self-esteem, and social needs must be fulfilled to motivate the team members. 

Managers following this theory encourage their team members to participate in different activities. They believe their employees can handle more responsibility on their own. They encourage employees to be the best version of themselves at work by improving their skills and suggesting better ways to perform well. 

Open communication and regular incentives are the foundation of this theory, as managers believe in not controlling the staff but collaborating with them.

Assumptions of Theory Y

1. Employees are motivated by self-control and not external control.
2. Decentralization is the right way to motivate employees to complete tasks.
3. The commitment to complete a task is based on the rewards.
4. Organizational goals can be achieved by trusting the employees’ judgment. 
5. Physical and mental tiredness during work is a natural phenomenon. 
6. An average employee seeks responsibility to become more motivated. 

Characteristics of Workers in Theory Y 

• Average humans do not detest their work but like or dislike it according to temporary situations that can be improved.
• Employees under this theory seek responsibility as motivational drivers.
• Employees prefer making decisions themselves and also solving problems creatively.
• Employees under this theory are self-motivated and enjoy ownership of work.
• Employees only need a little direction.

Limitations of Theory Y

• Some employees require guidance and are not comfortable with undefined working boundaries.
• Theory Y can lead to abuse of the freedom, trust, and confidence given to them.
• Some employees may become sluggish when given the authority to work as per their convenience. 
• Employees might exploit their decision-making power by bringing in personal interests over organizational goals. 
• Since quantitative metrics are not a focus in this theory, it becomes hard to measure employee growth and success. 
• The theory overgeneralizes how an employee behaves in a work environment.
• The theory can lead to managers becoming lazy, as they can delegate and decentralize all work to their subordinates in the name of transferring authority. 

Example of Theory Y

Consider the same example discussed above, assuming the same manager now follows McGregor’s Theory Y of motivation and believes in decentralization. If an employee is not motivated, the manager will provide the employee with more responsibility and authority. The manager will trust the employee’s decisions and help them understand their contribution to the company.

Instead of punishing the employee or associating a reward with work, the manager will allow them to collaborate with others and find solutions that fulfill the team member’s self-actualization, self-esteem, and social needs. In this way, the manager will change their management style into a participative or decentralized style to instill higher self-belief in their team members. 

How To Apply McGregor’s Theory X and Y as a Manager 

Using either theory is an extreme style of management. Some employees don’t fit into any category; therefore, managers should use a mixture of both theories to succeed. 

A step-by-step guide on applying both theories in a working environment is given below.

Step 1: Identify the Work Issue

Issue identification is the first step. 

Does the team not understand the work? Is the team demotivated because of a lack of incentives? Is there an internal conflict between team members? 

Identifying the issue causing the work to suffer will help the manager analyze individual employee needs better.

Step 2: Analyze Employees’ Needs and Wants

After identifying the issue, analyze the employees’ needs and wants. Since every employee is unique, following generic Theory X or Theory Y will not work. Identify what the employee lacks and their working style to employ the right theory that will motivate them in the right direction.

Step 3: Monitor Results After Employing the Theories

After employing a particular theory, monitor its performance. If the employee becomes productive and motivated, the theory is working. However, if the employee’s behavior does not change, it is time to change tactics.  

Step 4: Change the Management Style if the Previous One Doesn’t Work

If the previous management style is not working out, it is best to change it for better results. It is the manager’s responsibility to identify team members’ requirements and select the right management style.

If team members perform well under control, an authoritative management style can be used. However, if the team members are self decision-makers and enjoy freedom and responsibility, managers should opt for a democratic management style.

The Ideal Time to Use Theory X and Theory Y

Theory X is useful for less experienced employees who have just stepped into the professional world. They need guidance throughout their work journey and look for a controlled management system to understand the task well and complete it on time.

This theory cannot be used with experienced professionals. Such individuals are used to working on their own terms and accomplishing tasks. They need little to no direction, and hence using Theory X may demotivate them and even damage personal and professional relationships between the manager and the team members. Experienced professionals require a Theory Y management style, as they are capable of making the right decisions. 

Conclusion 

Management styles impact organizational goals. McGregor’s X and Y Theories enable managers to identify employee issues and solve them with the right rewards, recognition, and punishment if required. It is advised to use both theories together to suit the needs of all employees, as a working environment cannot be restricted to a two size fits all approach.