McGregor’s Theory X and Theory Y explained

- Motivation

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Theory X and Theory Y suggest two aspects of human behavior at work. But what does it mean in practice? And how does Management 3.0 come into play? Facilitator André Cruz digs into it.

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Motivation is a topic that is being discussed more and more as the world continues to change at an exponential rate. The explanation: It’s not just technology, business models, products, and services that evolve, but so do people.

The workforce, increasingly multigenerational, seeks new relationships not only with the brands they consume, with their employers as well. More autonomy, more purpose, and mastery items mentioned in Daniel Pink’s book (Drive) are just three of a series of items mentioned when we talk about motivation, engagement, and happiness at work.

Although new theories and practices have emerged regarding the theme, the foundations and principles of motivation are from a long time ago. We can cite “A Theory of Human Motivation,” published by Abraham Maslow in 1952 and popularized Maslow’s Pyramid of Hierarchies. The Situational Leadership Theory by Paul Hersey and Ken Blanchard, who says that there is no single “best” leadership style, was published in 1969.

Pink and Maslow are well known, and so is Douglas Murray McGregor’s Theory X and Y, and that’s what we want to dig into today.

Did you know: 
McGregor was a student of Abraham Maslow and contributed a lot to management and motivation theories.

Theory X and Y, first published in the book “The Human Side of Enterprise” from 1960 (ok, definitely, work motivation is not something new) which brought as a provocation the question: “What are your assumptions (implicit as well as explicit) about the most effective way to manage people?”. 

McGregor identified that people act according to their premises and assumptions. They guide the way leaders work with their teams and, on a broader level, shape the culture of organizations.

Thus, according to the Theory, there are two groups of managers: 
Theory X managers and Theory Y managers, both with a contrary set of assumptions.

What is McGregor’s Theory X and Theory Y?

Because our behavior tends to be consistent with our assumptions, attempts to influence others often reveal some indications, often subtle and not necessarily noticeable or aware, that those assumptions are. It’s important to us that we challenge our assumptions frequently.

Theory X Assumptions

  • Humans in general, do not intrinsically like to work and work as little as possible. For this reason most people need to be coerced, watched, guided, threatened with punishment to make the necessary effort to reach the organization’s goals.
  • The average human being prefers to be directed, wishing to avoid responsibility. It is unambitious, looking for safety above all else. Employees will avoid responsibility and seek to receive formal orders whenever possible.
  • Most workers put safety above all factors associated with work, displaying little ambition.
Bored at Work
Read on about Rewards and Incentives

Theory Y Assumptions

Theory Y serves as a counterpoint to Theory X’s authoritarian and control-oriented assumptions over people.

Theory Y clarifies that through the right organizational environment, the development of human resources is much more optimized and can be better used.

The premises are:

  • Physical and mental effort at work is as natural as leisure or rest.
  • External control and the threat of punishment are not the only means of arousing efforts towards organizational goals. Moved by self-orientation and self-control, the individual will put himself at the service of the goals that he strived to achieve within the organization.
  • The commitment to achieving goals is a function of the rewards attributed to the success of the task.
  • Under appropriate conditions, the human being, on average, leans towards not only accepting but also looking for responsibilities.
  • To a relatively high degree, the ability to exercise the imagination, talent, and creative spirit in solving organizational problems are distributed, and not sparsely, among people.

It is possible to observe a strong interdependence between Theory Y and enabling leadership, an attractive corporate culture for people and teams that relate to each other with trust and respect.

Theory X and Y in practice

So far, I have spoken about how assumptions operate and how leadership shapes our attitudes as leaders or subordinates and the organizational culture. Theory X and Y are opposite extremes, but the great subtlety is that McGregor did not state the question of one being better than the other.

Theory Y does no better than Theory X. It negates the assumptions of Theory X and vice versa.

Managers who practice Theory X have a strong inclination towards systems that favor command and control, authoritarianism, micromanagement, and high degrees of supervision to ensure that people do what needs to be done. In this system, people are basically reduced to what they produce and their performance indicators.

In terms of incentives, Theory X relies heavily on extrinsic motivations, that is, for people to achieve better performance if they make use of rewards and punishments—the famous metaphor of the Carrot and the Stick.

Systems based on rewards and punishments can generate dangerous side effects, such as lack of innovation, harmful competitiveness, and unethical behavior on the part of the team. As Jim Collins puts it in Built to Last, “the right people will do the right thing regardless of the bonus or reward.”

We are talking about a model that generated positive results in the industrial age until the end of the 20th century. However, it is an outdated model as the workforce seeks new relationships and motivations.

On the other hand, managers who adopt Theory Y assumptions shape systems where trust in people is one of the central pillars. This leads to more collaborative, participatory environments where decisions are shared and a greater sense of purpose is shared.

Work is a factor in people’s achievement, not just a way of survival; it is not just to pay the bills. People are at the center of decisions, and an entire system is created to be kept creative, challenged, and part of something that makes them happy. Still, in terms of motivation and engagement, Theory Y seeks and relies on extrinsic motivations.

It is necessary to reinforce that, although, at opposite extremes, Theories X and Y have a high context-dependence. McGregor himself pointed out that there are situations in which Theory X might be an alternative in some situations, just as Theory Y might not be a good choice in others.

If we take as an example extrinsic (X) and intrinsic (Y) motivations and their context dependence. Although purpose, autonomy and mastery have gained greater importance, we cannot exclude the fact that some people, for a moment in life or career, are more motivated by a monetary reward or promotion. Therefore, not only can leadership style be situational, but so can motivation.

Theory X and Theory Y in Human Resource Management

Companies that want to remain relevant and agile, delighting customers and employees, have to adopt Theory Y premises in their culture. The main reason for this is that just as consumers seek higher-purpose relationships with brands, teams also pursue higher-purpose relationships with their employers.

Theory X-based cultures will fail to retain the best talent for the simple fact that knowledge workers cannot tolerate systems based on command and control, micromanagement, and a management style of the last century.

For this reason, HR must enable, together with everyone in a company, a new look at people and their relationships, adopting assumptions that are more appropriate to the moment and this new workforce.

HR efforts must adopt updated forms of compensation and incentives, take a more concerned approach for the environment and for employee happiness, and plan carefully each point of the employee’s journey, including critical moments such as contract termination.

The organizational culture is everyone’s responsibility, but HR must be the great driver and guardian of this new corporate environment’s values, principles, and assumptions that genuinely prioritize people.

Read on about Agile HR and how you can foster that

Theory X and Y and Management 3.0

3.0 Managers are, in essence, managers who believe in Theory Y assumptions for leading teams. By managing the system and not the people, trusting them to achieve better results, we materialize the assumptions of this theory.

The principles that guide our practices also demonstrate this alignment:

  • Delight everybody
  • Improve everything
  • Engage People
  • Managing the system, not the people
  • Co-create

There are also a bunch of practices that bring the assumptions of Theory Y into shape and form part of the context of teams. 

Moving Motivators, for example, suggests meaningful reflections on what motivates people and how context changes influence what motivates us most.

Learn more about energizing people and how to motivate teams and team members at a Management 3.0 Workshop. Motivation and Engagement is an essential part: You will learn how engagement relates to motivation, get introduced to difference between intrinsic and extrinsic motivation and get to know the CHAMPFROGS model, the ten motivators and how to use the Moving Motivator Cards to learn about individual motivators of people.

Conclusion: Why it is important to discuss Theory X and Theory Y?

  • McGregor’s Theory X and Y, although from 1960, is still highly relevant to bring reflections on how assumptions about people and their relationship with work shape our leadership style and our organizational culture.
  • While it is recognized that Theory X may have worked in some contexts and that Theory Y may fail in others, changes in the context of technology, innovation, ESG, business models, business agility, and the new workforce make the Most Appropriate Theory Y
  • Twenty-first-century professionals will find it increasingly difficult to deal with management styles based on command and control and Theory X assumptions.
  • Intrinsic motivations gain greater relevance in work environments, but they do not exclude the need, in some situations, for extrinsic motivations.
  • More than changes in organizational assumptions, HR must lead the change in organizational assumptions in favor of talent retention and a strong culture in terms of agility, creativity, and innovation.

Also read: Innovation Management

Header photo by via Pexels

2 thoughts on "McGregor’s Theory X and Theory Y explained"

  • Russell says:

    Very helpful information it would be great to learn more😁

  • Stefani says:

    Why should any one be controlled unless an employer knows one has a mental illness issue and thus feel the need to control one’s actions????

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