Theory X and theory Y

Theory X and Theory Y are theories of human motivation and management. They were created and developed by Douglas McGregor at the MIT Sloan School of Management, initially presented at a management conference in 1957, and developed during the 1960s. These two theories describe contrasting models of workforce motivation applied by managers in human resource management, organizational behavior, organizational communication and organizational development. According to the models, the two opposing sets of general assumptions of how workers are motivated form the basis for two different managerial styles. Theory X stresses the importance of strict supervision, external rewards, and penalties: in contrast, Theory Y highlights the motivating role of job satisfaction and encourages workers to approach tasks without direct supervision.

Theory X is based on pessimistic assumptions regarding the typical worker. This management style supposes that the typical employee has little to no ambition, shies away from work or responsibilities, and is individual-goal oriented. Generally, Theory X style managers believe their employees are less intelligent than the managers are, lazier than the managers are, or work solely for a sustainable income. Due to these assumptions, Theory X concludes the typical workforce operates more efficiently under a "hands-on" approach to management. The 'Theory X' manager believes that all actions should be traced and the responsible individual given a direct reward or a reprimand according to the action's outcomes. This managerial style is more effective when used in a workforce that is not intrinsically motivated to perform. It is usually exercised in professions where promotion is infrequent, unlikely or even impossible and where workers perform repetitive tasks.

According to McGregor, there are two opposing approaches to implementing Theory X: the "hard" approach and the "soft" approach. The hard approach depends on close supervision, intimidation, and imminent punishment. This approach can potentially yield a hostile, minimally cooperative work force that could harbor resentment towards management. The soft approach is the literal opposite, characterized by leniency and less strictly regulated rules in hopes for high workplace morale and therefore cooperative employees. Implementing a system that is too soft could result in an entitled, low-output workforce. McGregor believes both ends of the spectrum are too extreme for efficient real world application. Instead, McGregor feels that somewhere between the two approaches would be the most effective implementation of Theory X.

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