Theory X and Theory Y

What Theory X and Theory Y are

Theory X and Theory Y (نظرية X ونظرية Y) is a management concept formulated by Douglas McGregor in his book The Human Side of Enterprise, published in 1960. The two theories are opposed assumptions that a manager may hold about the nature of the people who work for them, and each gives rise to a style of management. They are not a classification of employees into two kinds. They classify what the manager assumes about employees.

The concept matters to the human resources officer, the line manager and the owner of the establishment, because a manager’s assumption can come before every control, delegation and goal the manager sets. The assumption shapes the work before the manager has met any employee. Several nearby concepts go with it, and they are set out further down.

What Theory X assumes

In McGregor’s formulation, Theory X rests on assumptions about the average person at work:

• A dislike of work. The average person dislikes work by nature and avoids it whenever possible.
• A need for pressure. People are therefore compelled, directed, watched and threatened with punishment until they put in the effort that achieves the organisation’s goals.
• A preference for direction. The average person prefers to be directed, avoids responsibility, has little ambition and seeks security before anything else.

A manager who builds work on these assumptions may move toward close supervision, toward decisions kept at the manager’s own level, and toward incentives and penalties that push the employee to what is wanted. Control in that case can be a logical result of the assumption and not a managerial decision separate from it.

What Theory Y assumes

Theory Y answers with other assumptions, which McGregor set out as follows:

• Effort is natural. Putting physical and mental effort into work is as natural as play or rest.
• Self direction and self control. External control and the threat of punishment are not the only means of directing effort, because people direct and control themselves toward goals to which they are committed.
• Commitment in return for what is gained. Commitment to goals is tied to what is gained by achieving them, including satisfaction of the self and recognition.
• Responsibility. Under suitable conditions the average person learns not only to accept responsibility but to seek it.
• Capabilities. The capacity for imagination and creativity in solving the organisation’s problems is spread widely among employees, and under present working conditions it is not fully used.

A manager who holds these assumptions may involve employees in setting goals, delegate some decisions, and evaluate performance by what was achieved and not by what was observed. McGregor gave the name integration to the principle at which Theory Y arrives. It means that conditions are created in which employees achieve their own goals by directing their effort toward the success of the organisation.

How the two assumptions show up in management practice

The table is a rough picture of what may appear in a manager who holds each assumption. It is not a description of any particular manager.

The four rows are opposed pictures drawn for clarity, and a single manager need not show every row from one column.

What distinguishes Theory X and Theory Y from nearby concepts

The two theories are confused with concepts that are mentioned alongside them in discussions of motivation and leadership, and each of those has its own subject:

• Hierarchy of needs arranges human needs in levels. McGregor drew on it when presenting his argument, but the two theories are not an ordering of needs. They are a manager’s assumptions about employees.
• Work motivation covers what has been said about why people put in effort. A manager’s assumption about motivation comes before the choice of any means of motivating employees.
• Employee empowerment is an arrangement that gives the employee authority and decisions. The assumptions in the two theories may decide whether such an arrangement is granted at all.
• Job autonomy is the degree of choice the employee has in carrying out the work. It may widen when assumptions move toward Y and narrow when they move toward X.
• Participative leadership is a style of leading that is consistent with Y assumptions. It is a style practised, while the theory is an assumption held.

How Theory X and Theory Y connect to job design and the structure of supervision

Among the practices consistent with Theory Y, McGregor named decentralisation and delegation, job enlargement, participative management and appraisal by objectives. One may also look at job enrichment and at span of control (نطاق الإشراف), and those two links are ours, not McGregor’s.

The unifying idea is that an organisation has policies and that each policy has an assumption standing behind it. A strict attendance policy and a flexible one may each tell employees what the organisation assumes about them, even if that is written nowhere.

A hypothetical example of two styles in two identical teams

Imagine a customer service team of 8 employees, each of whom submits 5 refund requests a week, and two managers running two identical teams. The first manager approves every request personally and so reviews 8 × 5 = 40 requests a week. The second manager sets a stated limit on the amount, within which the employee decides, and then reviews a sample of 10% of the requests, which is 40 × 10% = 4 requests.

The figures show that the first style puts 40 decisions a week on the manager, while the second puts 4 reviews. The example does not show that one style is better than the other in its result. The figures are hypothetical, and neither errors nor customer satisfaction were measured in it. It shows only that the assumption about the employee fixes the volume of control and the place where the decision sits.

Why McGregor wanted the assumption made visible

McGregor argued that every managerial decision rests on an implicit theory of human nature, and that a manager may not realise what that theory is. A manager who sets up an attendance system or an approvals policy holds an assumption about employees even without stating it. McGregor wanted to make the assumption visible so that it would become open to review, instead of working unseen in every decision.

The assumption can fulfil itself in some cases. An employee who is watched closely may behave as someone who cannot be trusted with the work, and the manager sees in that behaviour confirmation of the assumption. This is a hypothesis about how an assumption works and not a measured result, and it explains why an assumption may stay in place without ever being tested.

Questions that bring a manager’s assumption to light

A manager can put questions about their own practices to themselves, and the human resources officer can put them to the manager:

• Does any small decision in the team need my approval, and why?
• When an employee makes a mistake, do I look for who failed or for the cause?
• Which goals did I involve employees in setting, and which did I only tell them about?
• If I were away for a week, what would stop in the team?

The questions do not give a score on X or Y. They show what the manager actually assumes. If it turns out that a week’s absence would stop everything, that may indicate decisions concentrated with the manager, but it does not necessarily show the cause of the concentration. It may be an assumption, or it may be weak procedures.

A hypothetical example on attendance policy

Take an establishment of 20 employees whose attendance policy rests on individual verification of every entry and exit, in a working month of 22 days. The number of monthly entries and exits recorded is 20 × 22 × 2 = 880. A second, hypothetical establishment with the same number of employees rests on a weekly check of deliverables, and so reviews 20 × 4 = 80 deliverables a month. The first builds its control on the time the employee spends, and the second on what the employee delivers.

The example does not mean that one policy is right and the other wrong. A particular kind of work may call for attendance recording, and counting deliverables may not suit another kind of work. It shows that each policy carries an assumption about the employee. The figures are hypothetical, and no effect on performance can be inferred from them.

The limits of Theory X and Theory Y

The two theories can be presented as a sharp opposition, but a manager need not fall at either end. A manager may hold different assumptions about different employees or about different tasks. Theory Y does not claim that every worker accepts responsibility and controls themselves in every circumstance. It is an assumption on which a style of management is built, not a confirmed description of every person. Nor does Y mean lax management: nothing in its assumptions requires that expectations be dropped, and only the means of achieving them change.

The two theories describe assumptions, and in the sources we reviewed we found no accredited test that gives a manager a score on X or Y. They also do not show how a style is chosen according to the kind of work or the experience of the employee. Other leadership concepts take that up, such as situational leadership.

How an organisation can use the theories

We suggest using the theories as a tool for reflection, and not as a tool for judging managers or classifying people. The human resources officer can ask managers three questions. What controls and approvals are in force in your team? What assumption stands behind each of them? Is that assumption still correct in your team today?

The answers may show that a control put in place after an old incident has outlived its cause, or that a control is missing from work that needs review. In both cases the assumption becomes visible, and it can then be discussed instead of staying an unspoken custom. This is a practical recommendation and not part of the theory as McGregor formulated it.

This is an explanation of the concept, not legal advice.