What is Theory X and Theory Y?

Theory X and Theory Y were proposed by management theorist Douglas McGregor. Both theories rest on the assumption that management is required to coordinate all aspects of the value delivery process to be productive. 

As part of this theory, managers must be able to motivate employees. Importantly, different types of employees are motivated by different sorts of rewards. 

The approaches to motivation (and the type of employee) were divided into:

What is Theory X?

This approach assumes that some employees are lazy or not motivated by the work (in fact, they have a distaste of the work), unambitious, avoid responsibility, is self-centered, indifferent about organizational goals, and prefers to be directed. 

It calls on the leader to be proactive in managing the employees and allocation of resources. She should motivate the subordinate through specific directives, closely supervise their efforts, and take steps to motivate (through reward or punishment) accordingly. 

In other words, it is an authoritative style of management.

What is Theory Y? 

Theory Y assumes that subordinates do not dislike the work, are self-motivated, can be creative, seeks responsibility (leadership roles), and can be self-directed. Leaders must respond with a participative style of management. 

As such, threats of punishment are far less effective in motivating the employee. Also, the employee is committed to an objective that is based upon rewards - though they may respond to different types of rewards. 

These types of employees generally respond better to rewards leading to esteem and self-actualization. Management attempts to get the maximum output with the least efforts on their part. 

As you can see, these theories are diametrically opposed. They do, however, view behavior as an effect of attitude rather than a trait.

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