Modern Management Theory: Theory X & Theory Y
Mc Gregor [1] developed the Theory X & Theory Y [2] in 1960 the author of the book “The Human side of the Enterprise”. For the first time, someone made the claim that the most important asset at the disposal of an organization was actually your Human Resources. It refers to two main schools of thought: Theory X and Theory Y.
Theory X: the employees are inherently lazy. They lack ambition, they possess little capacity for creativity. The only way to motivate the employees then is to provide them with some sort of monetary incentive and to appeal to their physiological and security needs as described by Maslow10. Since employees lack ambition and drive, they need a more coercive leadership style, requiring to be controlled to achieve their goals. This involves an authoritarian management style: Results/Deadline driven, Short tempered/shouts, demanding, unsportsmanlike, do not participate in projects/work, one-way communicators, they do not like to thank or praise, having zero concern about staff welfare or morale.
Theory Y: believes that employees are not lazy, that they do have ambition, that they legitimately enjoy the work that they do and will seek out positions of responsibility and authority and that they are not motivated by money but by a wide variety of different things. Not only monetary incentives would motivate employees to accomplish organizational objectives. Social and self-esteem needs must also be satisfied to accomplish their needs. This implies that workers can and will work independently, if correctly motivated. Enlightened Management is applied: imagination, creativity driven, not narrow minded, allowance of development and growth, friendly environment, easy-going and participating, de-centralized. His theory is just a general assumption on how to process things and view things in the work place. Leadership must be situational. Is it fair to allow employees to work independently if you haven’t yet shown them the ropes? It is about learning how to tailor the leadership style towards the particular situation of the employee. Every person must be assessed individually and obviously make the best decision. Leadership must adjust to Theory X and Theory Y, depending on circumstances. I will get back to these concepts and more later on, in my chapters dedicated to leadership.
https://en.wikipedia.org/wiki/Theory_X_and_Theory_Y
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