Mhrm project 2

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Mhrm project 2

  1. 1. introductionDouglas McGregor, an American social psychologist, proposed his famous X-Y theory inhis 1960 book The Human Side Of Enterprise. Theory x and theory y are still referredto commonly in the field of management and motivation, and whilst more recentstudies have questioned the rigidity of the model, Mcgregors X-Y Theory remains avalid basic principle from which to develop positive management style and techniques.McGregors XY Theory remains central to organizational development, and to improvingorganizational culture.McGregors X-Y theory is a salutary and simple reminder of the natural rules formanaging people, which under the pressure of day-to-day business are all too easilyforgotten.McGregors ideas suggest that there are two fundamental approaches to managingpeople. Many managers tend towards theory x, and generally get poor results.Enlightened managers use theory y, which produces better performance and results,and allows people to grow and develop.McGregors ideas significantly relate to modern understanding of the PsychologicalContract, which provides many ways to appreciate the unhelpful nature of X-Theoryleadership, and the useful constructive beneficial nature of Y-Theory leadershiptheory x (authoritarian management style) The average person dislikes work and will avoid it he/she can. Therefore most people must be forced with the threat of punishment to work towards organisational objectives. The average person prefers to be directed; to avoid responsibility; is relatively unambitious, and wants security above all else.theory y (participative management style) Effort in work is as natural as work and play. People will apply self-control and self-direction in the pursuit of organisational objectives, without external control or the threat of punishment. Commitment to objectives is a function of rewards associated with their achievement. People usually accept and often seek responsibility. The capacity to use a high degree of imagination, ingenuity and creativity in solving organisational problems is widely, not narrowly, distributed in the population. In industry the intellectual potential of the average person is only partly utilised.
  2. 2. McGregor argued that the conventional approach to managing was based on three majorpropositions, which he called Theory X: 1. Management is responsible for organizing the elements of productive enterprise-money, materials, equipment, and people-in the interests of economic ends. 2. With respect to people, this is a process of directing their efforts, motivating them, controlling their actions, and modifying their behavior to fit the needs of the organization. 3. Without this active intervention by management, people would be passive-even resistant- to organizational needs. They must therefore be persuaded, rewarded, punished, and controlled. Their activities must be directed. Managements task was thus simply getting things done through other people.According to McGregor, these tenets of management are based on less explicit assumptionsabout human nature. The first of these assumptions is that individuals do not like to work andwill avoid it if possible. A further assumption is that human beings do not want responsibilityand desire explicit direction. Additionally, individuals are assumed to put their individualconcerns above that of the organization for which they work and to resist change, valuingsecurity more than other considerations at work. Finally, human beings are assumed to be easilymanipulated and controlled. McGregor contended that both the classical and human relationsapproaches to management depended this same set of assumptions. He called the first style ofmanagement "hard" and identified its methods as close supervision, tight controls, and coercion.The hard style of management led to restriction of output, mutual distrust, unionism, and evensabotage. McGregor called the second style of management "soft" and identified its methods aspermissiveness and need satisfaction. McGregor suggested that the soft style of managementoften led to managers failure to perform their managerial role. He also pointed out thatemployees often take advantage of an overly permissive manager by demanding more butperforming at lower levels.McGregor drew upon the work of Abraham Maslow (1908-1970) to explain why Theory Xassumptions led to ineffective management. Maslow had proposed that mans needs are arrangedin levels, with physical and safety needs at the bottom of the needs hierarchy and social, ego, andself-actualization needs at upper levels of the hierarchy. Maslows basic point was that once aneed is met, it no longer motivates behavior; thus, only unmet needs are motivational. McGregorargued that most employees already had their physical and safety needs met and that themotivational emphasis had shifted to the social, ego, and self-actualization needs. Therefore,management had to provide opportunities for these upper-level needs to be met in the workplace,or employees would not be satisfied or motivated in their jobs.Such opportunities could be provided by allowing employees to participate in decision making,by redesigning jobs to make them more challenging, or by emphasizing good work grouprelations, among other things. According to McGregor, neither the hard style of managementbased on the classical school nor the soft style of management inspired by the human relationsmovement were sufficient to motivate employees. Thus, he proposed a different set ofassumptions about human nature as it pertains to the workplace
  3. 3. Comparing Theory X and Theory Y Motivation Theory X assumes that people dislike work; they want to avoid it and do not want to take responsibility. Theory Y assumes that people are self-motivated, and thrive on responsibility. Management Style and Control In a Theory X organization, management is authoritarian, and centralized control is retained, whilst in Theory Y, the management style is participative: Management involves employees in decision making, but retains power to implement decisions. Work Organization Theory X employees tend to have specialized and often repetitive work. In Theory Y, the work tends to be organized around wider areas of skill or knowledge; Employees are also encouraged to develop expertise and make suggestions and improvements. Rewards and Appraisals Theory X organizations work on a ‘carrot and stick’ basis, and performance appraisal is part of the overall mechanisms of control and remuneration. In Theory Y organizations, appraisal is also regular and important, but is usually a separate mechanism from organizational controls. Theory Y organizations also give employees frequent opportunities for promotion. Application Although Theory X management style is widely accepted as inferior to others, it has its place in large scale production operation and unskilled production-line work. Many of the principles of Theory Y are widely adopted by types of organization that value and encourage participation. Theory Y-style management is suited to knowledge work and professional services. Professional service organizations naturally evolve Theory Y- type practices by the nature of their work; Even highly structure knowledge work, such as call center operations, can benefits from Theory Y principles to encourage knowledge sharing and continuous improvement.
  4. 4. Theory YMcGregor put forth these assumptions, which he believed could lead to more effectivemanagement of people in the organization, under the rubric of Theory Y. The major propositionsof Theory Y include the following: 1. Management is responsible for organizing the elements of productive enterprise-money, materials, equipment, and people in the interests of economic ends. 2. People are not by nature passive or resistant to organizational needs. They have become so as a result of experience in organizations. 3. The motivation, potential for development, capacity for assuming responsibility, and readiness to direct behavior toward organizational goals are all present in people- management does not put them there. It is a responsibility of management to make it possible for people to recognize and develop these human characteristics for themselves. 4. The essential task of management is to arrange organizational conditions and methods of operation so that people can achieve their own goals by directing their efforts toward organizational objectives.Thus, Theory Y has at its core the assumption that the physical and mental effort involved inwork is natural and that individuals actively seek to engage in work. It also assumes that closesupervision and the threat of punishment are not the only means or even the best means forinducing employees to exert productive effort. Instead, if given the opportunity, employees willdisplay self-motivation to put forth the effort necessary to achieve the organizations goals. Thus,avoiding responsibility is not an inherent quality of human nature; individuals will actually seekit out under the proper conditions. Theory Y also assumes that the ability to be innovative andcreative exists among a large, rather than a small segment of the population. Finally, it assumesthat rather than valuing security above all other rewards associated with work, individuals desirerewards that satisfy their self-esteem and self-actualization needs.Although McGregor did not believe that it was possible to create a completely Theory Y-typeorganization in the 1950s, he did believe that Theory Y assumptions would lead to moreeffective management. He identified several approaches to management that he felt wereconsistent with the precepts of Theory Y. These included decentralization of decision-makingauthority, delegation, job enlargement, and participative management. Job enrichment programsthat began in the 1960s and 1970s also were consistent with the assumptions of Theory Y.
  5. 5. CRITICISM OF THEORY YThe goal of managers using Theory X management styles was to accomplish organizationalgoals through the organizations human resources. McGregors research suggested that whenwork was better aligned with human needs and motivations, employee productivity wouldincrease. As a result, some critics have suggested that, rather than concern for employees, TheoryY style managers were simply engaged in a seductive form a manipulation. Even as managersbetter matched work tasks to basic human motivational needs through participative management,job rotation, job enlargement, and other programs that emerged at least partly from McGregorswork, managers were still focusing on measures of productivity rather than measures ofemployee well-being. In essence, critics charge that Theory Y is a condescending scheme forinducing increased productivity from employees, and unless employees share in the economicbenefits of their increased productivity, then they have simply been duped into working harderfor the same payTHEORY X AND THEORY Y IN THE TWENTY-FIRST CENTURYMcGregors work on Theory X and Theory Y has had a significant impact on managementthought and practice in the years since he first articulated the concepts. In terms of the study ofmanagement, McGregors concepts are included in the overwhelming majority of basicmanagement textbooks, and they are still routinely presented to students of management. Mosttextbooks discuss Theory X and Theory Y within the context of motivation theory; others placeTheory X and Theory Y within the history of the organizational humanism movement.Theory X and Theory Y are often studied as a prelude to developing greater understanding ofmore recent management concepts, such as job enrichment, the job-characteristics model, andself-managed work teams. Although the terminology may have changed since the 1950s,McGregors ideas have had tremendous influence on the study of management.In terms of the practice of management, the workplace of the early twenty-first century, with itsemphasis on self-managed work teams and other forms of worker involvement programs, isgenerally consistent with the precepts of Theory Y. There is every indication that such programswill continue to increase, at least to the extent that evidence of their success begins toaccumulate.
  6. 6. EFFECT ON MANAGEMENT FUNCTIONSIn their well-known textbook, Harold Koontz and Cyril ODonnell illustrated how the managerialfunctions of planning, leading, and controlling might be affected by Theory X and Theory Yassumptions. In regard to planning, Theory X assumptions might lead to the superior setting ofobjectives with little or no participation from subordinates. Theory Y assumptions, conversely,should lead to cooperative objectives designed with input from both employees and managers,resulting in a higher commitment by subordinates to accomplish these shared objectives.Under Theory X, managers leadership styles are likely to be autocratic, which may createresistance on the part of subordinates. Communication flow is more likely to be downward frommanager to the subordinates. In contrast, Theory Y may foster leadership styles that are moreparticipative, which would empower subordinates to seek responsibility and be more committedto goal achievement. Theory Y leadership should increase communication flow, especially in theupward direction.In regard to control, Theory X is likely to result in external control, with the manager acting as aperformance judge; the focus is generally on the past. Conversely, Theory Y should lead tocontrol processes based on subordinates self-control. The manager is more likely to act as acoach rather than a judge, focusing on how performance can be improved in the future ratherthan on who was responsible for past performance. Although the conceptual linkages betweenTheory X and Theory Y assumptions and managerial styles are relatively straightforward,empirical research has not clearly demonstrated that the relationship between these assumptionsand managers styles of planning, organizing, leading, and controlling is consistent withMcGregors ideas.

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