Theory X And Theory Y Management Philosophy For Improving Employee Productivity

Theory X and Theory Y management philosophy – Introduction

Discuss about the Analysing Management Theory and Evaluating Strength.

In today’s competitive business worlds, highly productive employees provide a competitive advantage to companies. Organisations focus on hiring qualified employees and providing them a positive working environment to improve their performance. Executives implement different leadership approaches and management theories to improve their employees’ productivity and performance to generate a competitive advantage over competitors (Hill, Jones and Schilling, 2014). There are a number of management philosophies which provide different views on how leaders can manage and inspire their employees. Leaders use management philosophies to establishing a positive working environment and motivating employees. Management theory assists leaders in managing and supervising employees to achieve common organisational goals by motivating and inspiring them to perform better. Leaders can use these theories to inspire employees through support and encouragement to achieve desired results (Smith et al., 2012). This essay will analyse the statement “Workers are inherently lazy and require constant supervision to ensure they achieve set tasks”. The statement is based on “Theory X and Theory Y” management philosophy for motivation which assists managers in encouraging their employees to improve their performance. This essay will suggest a particular application of the management theory and evaluate its strengths and weaknesses. Further, the essay will analyse suitable alternative to this management approach.

The statement mentioned above is based on the ‘Theory X and Theory Y’ management philosophy which is a theory of human motivation and management. Douglas McGregor originally proposed the theory in his book titled ‘The Human Side of Enterprise’ in 1960 (Gannon and Boguszak, 2013). In his book, McGregor proposed two theories which can be implemented by managers for perceiving and addressing issues relating to employee motivation. McGregor called these opposing motivational methods as Theory X and Theory Y. Each theory assumes that the key roles and responsibilities of managers include organising resources, taking decisions for benefiting the company, supervision people and others. The theory provides two different approaches for motivating employees that can be implemented by managers. However, the modern concept for managing and motivating employees has changed as the demand for talent labour increases (Stoyanov and Diderich, 2017). Many other theories have emerged which provides an opposite view than Theory X and Theory Y for motivating employees. The theory is old, and it did not seem suitable for modern enterprises such as technology companies or start-ups.

According to McGregor, there are a number of assumptions made under Theory X management regarding employees. For example, it assumes that work is inherently distasteful to most employees, and generally they attempt to avoid the work whenever possible. It assumes that most people are not ambitious, and they did not desire to get new responsibilities (Kopelman, Prottas and Falk, 2012). They preferred to get directed by a strong leader who can motivate them only through fulfilling physiological and security level needs provided by Abraham Maslow in the hierarchy of needs theory. Theory X assumes that most people are self-centred due to which they must be closely controlled and often coerced by management to achieve organisational objectives. It also assumes that employees resist change, and they are gullible and unintelligent. According to Theory X, the primary source of employee motivation is monetary rewards, with security being a strong second (Mohamed and Nor, 2013). Managers can take either hard or soft approach to get desired results from employees. In hard approach, motivation of employees relies on implicit threats, tight control, micromanagement, and coercion. In this approach, managers establish a workplace environment of command and control in which employees are punished if they did not comply with organisational policies. However, this approach is not optimal in modern corporations since it results in creating a hostile working environment, extreme union demands and purposely low output from employees.

Understanding Theory X and Theory Y

On the other hand, the soft approach is being permissive and seeking harmony from the employees. This approach focuses on employees’ demands and fulfilling them in the hopes that in return they will be encouraged to improve their performance and achieve organisational goals. Based on the principles of Maslow hierarchy of needs theory, McGregor argues that once a need is satisfied, it can no longer motivate an employee (Ozguner and Ozguner, 2014). Organisations use monetary benefits and rewards to satisfy their employees’ lower-level needs. After satisfaction of such needs, the motivation disappears. Theory X did not focus on fulfilling higher-level needs of employees because it did not acknowledge such needs as relevant in the workplace. Employees who satisfy their lower-level needs by working are more likely to satisfy their higher-level demands in leisure time. However, modern organisations avoid implementing this theory for motivating their employees because it is not suitable according to modern requirements (Russ, 2013). In recent years, the demand for talented employees has grown, and managers focus on retaining them into the company for gaining a competitive advantage. Unlike Theory X, managers focus on more than fulfilling demands of employees. They implement strategic policies for enhancing job satisfaction and interpersonal development which improve retention rate in a firm.

Theory Y accepts that employees are naturally cheerful towards work, and they have higher level needs such as self-actualisation and esteem needs. In this theory, managers focus on fulfilling higher level needs of employees to motivate them to improve their performance (Gurbuz, Sahin and Koksal, 2014). The assumptions made by Theory Y regarding employees are complete opposite than Theory X. Theory Y assumes that if the working conditions are favourable than work can be as natural as play and employees will enjoy their work. It assumes that people will be self-directed and more likely to meet organisational objectives if they are committed to them. It assumes if managers implement reward system approach for addressing higher-level needs of employees than people will be committed to performing with high productivity and quality. The theory assumes that if ingenuity and creativity are common in the workplace, most employees will prefer to handle new responsibilities. Theory Y provides that managers are required to align personal goals of employees with organisational objectives by using employees’ higher level needs as motivators. The key principles of Theory Y focus on decentralising management control and reducing layers of administration by encouraging managers to delegate their powers and responsibilities to subordinates (Roby, 2012). Job enlargement is another key factor which emphasises on broadening the scope of employees’ job variety and opportunities. Participative management and performance appraisals are key factors of Theory Y which increases employees’ role in decision-making and providing them rewards based on their performance.

The limitations and strengths of Theory X and Theory Y

The theory is based on “carrot and stick” principle for motivating employees. Theory X is more suitable for organisations who hire labour for work. Employees who work to fulfil their basic needs are more likely to be motivated by monetary rewards (Lawter, Kopelman and Prottas, 2015). On the other hand, Theory Y approach is more suitable for motivating skilled labour and top-level executives who work to fulfil their higher-level needs such as esteem and self-actualisation. Steve Jobs, former CEO and co-founder of Apple Incorporation, used Theory X and Theory Y approach to motivate employees to perform better (Baker, 2013). Jobs maintained a dominating leader position in Apple, and he forced his employees to achieve desired results. Jobs favoured Theory X management approach as a more suitable option for managing employees at the workplace. On the other hand, Tim Cook, current CEO of Apple, preferred Theory Y approach for managing employee motivation in the workplace. Instead of being dominating as Jobs, Cook prefers to use performance approach and participative management approach to motivate its employees. Similarly, executives at Google did not force their employees to perform better; instead, they provide them personal freedom to achieve organisational goals. The company provide a number of offers to its employees such as unlimited sick leave, free tuition, free lunch, breaks at work, office vacations and others. It also allows them to work on their personal projects during office hours which motivate them to perform better (D’Onfro, 2015). Similarly, other technology companies such as Microsoft and Amazon can implement Theory Y for motivating their employees to perform better.

The strengths of Theory X and Theory Y approach is that it is a good guide for management to not only developing motivational strategies but also influencing the complete managerial system based on the behaviour of employees. The theories are heavily influenced by Maslow hierarchy of needs theory which enables managers to use behaviour and needs of employees to improve their performance. The assumptions of human behaviour made are practical, and generally people are likely to correspond to the provisions of Theory X and Theory Y (Akindele and Afolabi, 2013). However, there a number of limitations or weaknesses of these theories as well due to which most modern organisations avoid implementing them to motivate their employees. The first limitation is that McGregor just stated his assumptions regarding human behaviour which cannot be called a reality until all the assumptions are tested. Theory X approach focuses on the hard approach of managing people, and Theory Y focuses on a soft approach which leads to laissez-faire management which might not be able to address management issues. Both theories make extreme assumptions regarding human behaviour when in fact only a few people correspond to such extreme assumptions every time (Jenab and Staub, 2012). Most people fall in between the principle of these theories; however, McGregor ignored this aspect of human behaviour. Implementation of Theory X resulted in establishing a hostile or punitive working environment whereas implementation of Theory Y might lead to an indisciplined working culture.

Modern alternatives to Theory X and Theory Y management philosophy

There are different alternative theories available which can be implemented by managers instead of Theory X and Theory Y. For example, in 1961, David McClelland provided ‘Three needs theory’ or ‘Needs theory’ which identifies three key motivators influence the behaviour of employees (Miner, 2015). The theory provides three motivators which include a need for affiliation, a need for power and a need for achievement. McClelland provided that employees have different characteristics depending on their dominating behaviour. Managers can identify these motivators and use them to motivate employees. For example, characteristics of an employee with achievement as a dominant motivator include setting and accomplishing challenging goals, prefer to work alone, and like regular feedback. The employee with affiliation as a dominant motivator is more likely to favour collaboration, belong to the group, and doesn’t like high risk (Dinibutun, 2012). The employees with power as a dominant motivator are likely to win arguments, enjoy status and want to control operations. These motivators can be used by managers to motivate employees. This theory made assumptions regarding human behaviour as well just as Theory X and Theory Y, but they are more realistic. This theory is better because it provides a middle ground between Theory X and Theory Y because it focuses on motivating employees based on their behaviour rather than making prior assumptions. However, the theory also assumes that there are only three needs for each person and needs will definitely influence their behaviour.

In conclusion, Theory X and Theory Y provide two extreme approaches to management which can be used by executives for motivating employees and improving their performance. McGregor based this theory on principles of Maslow hierarchy of needs theory by stating that once a need is satisfied, it cannot motivate anymore. Theory X made assumptions that employees did not prefer work, and they avoid responsibilities and managers can choose either punitive or reward methods to motivate them and improve their performance. On the other hand, Theory Y assumes that employees like to work, and they accept organisational responsibilities. Therefore, managers should provide them open space and positive working environment in order to motivate them. These theories made assumptions regarding human behaviour without valid evidence. Modern corporations did not prefer to implement these policies because the implementation of both theories either leads to hostile or indisciplined working environment. Managers can implement McClelland needs theory which focuses on behaviour of employees to motivate them. Effective assessment of employee behaviour is necessary before implementation of a motivational theory which assists in improving its effectiveness.

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