1. Douglas MacGregor Theory X and Theory Y

2. The Human Side of Enterprise In his 1960 management book, The Human Side of Enterprise, Douglas McGregor proposed two theories by which managers view employee motivation. He referred to these nearly opposite management approaches as Theory X and Theory Y. Both of these theories assume that management's role is to organize resources, including people, to best benefit the organization. However, after this common objective, there's little else they share.

3. Theory X and Theory Y are two sets of assumptions about the nature of people as managers. They describe the way that managers see themselves in relation to others and do not necessarily indicate "good" or "bad" viewpoints, or the best way to manage.

4. Theory X and Theory Y are completely different views of people. If a manager takes a Theory X perspective, he will always set objectives for the workers without consulting them, will give instructions without feedback and will punish or reward according to strict rules. In contrast, a manager who takes a Theory Y perspective will involve his workers in decision making, encourage feedback during communication and allow sufficient room for self control.

5. Assumptions of X and Y Theory Y Assumptions: • People view work as being as natural as play and rest • People learn to accept and seek responsibility • People will be self-directed and creative to meet their work and organizational objectives if they are committed to them. • People will be committed to their quality and productivity objectives if rewards are in place that address higher needs such as self-fulfilment. • The capacity for creativity spreads throughout organizations.

6. Theory X Assumptions: • People must be coerced or controlled to do work to achieve objectives • People prefer to be directed • Work is inherently distasteful to most people, who will attempt to avoid work whenever possible. • Most people are not ambitious, have little desire for responsibility, and prefer to be directed.

7. Theory X Assumptions: • Most people have little capacity for creativity in solving organizational problems. • Motivation occurs only at the physiological and security levels of Maslow's Hierarchy of Needs • Most people are self-centred. As a result, they must be closely controlled and often forced to achieve organizational objectives • Most people resist change. • Most people are gullible and not particularly intelligent.

8. Applying Theory Y Management - Business Implications If Theory Y holds true, an organization can use the principles of management indicated below to improve employee motivation: • Decentralization and Delegation - If firms decentralize control and reduce the number of levels of management, managers will have more subordinates and consequently will be forced to delegate some responsibility and decision making to them. • Job Enlargement - Broadening the scope of an employee's job adds variety and opportunities to satisfy ego needs.

9. Participative Management - Consulting employees in the decision making process taps their creative capacity and provides them with some control over their work environment. • Performance Appraisals - Having the employee set objectives and participate in the process of evaluating how well they were met. • If properly implemented, such an environment would result in a high level of motivation as employees work to satisfy their higher level personal needs through their jobs.

10. Applying Theory X Management - Business Implications If Theory X holds true, an organization can use the principles of scientific management to improve employee motivation: • Motivation through financial means • Supervision • Simple Tasks • Strict Hierarchy • Authoritarian Management