Douglas McGregor was an American psychologist and academic who made significant contributions to management theory. He developed Theory X and Theory Y, which propose different assumptions about employee motivation. Theory X assumes employees dislike work and must be coerced, while Theory Y assumes work can be as natural as play if conditions are right. McGregor also improved performance appraisal processes by emphasizing future goals over past performance. He argued organizations should focus more on intrinsic rewards and view employees as individuals rather than machine parts. McGregor's work influenced how managers approach employee motivation and organizational effectiveness.

1. Douglas McGregor
A,B,C …X,Y,Z

2. McGregor’s Profile
 Bachelor’s from Wayne State
University
 District manager of retail gas
company
 Worked with transient laborers
 Masters and PhD from Harvard
 Psychologist at MIT
 President at Antioch

3. McGregor’s Beliefs
“If there is anything he was trying to
overcome or destroy, it was the
institutional habit of talking about
the virtues of democracy while
running affairs autocratically.”
An Antioch College Professor

4. McGregor’s Beliefs
 Employees are not machine parts to
be fixed, redesigned, or eliminated
 They are individual people in all of
their complexity

5. Influencing McGregor’s
Work
 McGregor challenges the prevailing mood
of Taylor, alienation, and dehumanization
 Existing organizations model the church
or the military
 50 years of political, social and economic
change
 The problem is that management is
applying the wrong tools

6. McGregor’s Contributions to
Management
 Improved performance appraisal
process
 Theory X and Theory Y
 How to improve organizational
effectiveness

7. Improved Performance
Appraisal Process

8. Problems with Conventional
Performance Appraisals
 Organizational objectives and
requirements evolve
 Individuals skills, needs and
objectives change
 Management’s judgments differ
 Focus is on the past
 Employee performance is related to
how he is managed

9. McGregor’s Contribution to
Performance Appraisal
 Three uses of performance appraisal
 Administrative – salary, promotion
 Informative – feedback, suggestions for
behavioral change
 Motivation – coach, council

10. McGregor’s Contribution to
Performance Appraisal
 Drucker’s MBO
Subordinate provides a clear job
statement
Subordinate provides job-related
targets
Management and employee come
to terms on worker’s objectives

11. McGregor’s Contribution to
Performance Appraisal
 Employees know their own strengths
and weaknesses best
 The manager knows the goals and
objectives of the organization and
himself

12. McGregor’s Contribution to
Performance Appraisal
 By using MBO, the emphasis is on:
 Analysis not appraisal
 The future not the past
 Performance not personality

13. Critique of McGregor’s
Performance Appraisal
 Performance issues are ignored
 Salary and promotion issues
 Some workers don’t want the
responsibility for setting their own
goals

14. Theory X and Theory Y

15. McGregor’s Contribution to
Management Theory
 Theory X assumptions
 The average person dislikes work and
will avoid it
 Most people must be coerced or
controlled
 People avoid responsibility and have
little ambition

16. McGregor’s Contribution to
Management Theory
 Theory X outcomes
 Work becomes a means to an end
 Reinforces the rigid lines of authority
 Managers that assume Theory X get
Theory X
Satisfied needs are not motivators

17. McGregor’s Contribution to
Management Theory
 Theory Y assumptions
 Physical and mental work effort are natural
 Committing to objectives will allow the full
range of control tools to be utilized
 Commitment is a function of proper rewards
 People learn to seek responsibility
 People have the ability to creatively solve
organizational problems
 Employees need the freedom to utilize their
untapped potential

18. McGregor’s X and Y Theory
Your belief structure (X or Y or ?)
does not limit you from employing
hard or soft managerial strategies

19. Critique of McGregor’s
Contributions
 He builds Theory X and Theory Y on
Maslow’s hierarchy
What are the strengths and
weaknesses of this position?

20. McGregor’s Critiques
 Theory X and Y are insufficient in
accounting for all situations
 Nathan Harter states that Theory X
managers are not necessarily
inhuman

21. How to Improve
Organizational
Effectiveness?

22. McGregor’s Contribution to
Management Theory
 People can achieve their own goals
by pursuing the organization’s goals
 The organization will suffer if this
does not occur

23. McGregor’s Contribution to
Management Theory
 The current management persona
is:
 decisive, force, competitive, just
 People are rational and emotional
 Emotions often drive different points
of view
 Motivation is an emotional force

24. McGregor’s View of
Organizational Maps
 Current organizational structures:
 Delegate some authority not
responsibility
 You only have one boss
 Strict span of control

25. McGregor’s View of
Organizational Maps
 The organizational “maps” are not
real
 Maps have limited usefulness
 Authority often does not equal
responsibility
 Informal organization is real

26. McGregor’s Contribution to
Management Theory
 Three factor’s that make up a
manager’s style:
 Cosmology
 Identity of the manager
 Organizational situation

27. McGregor’s Critique of
Current Management
 Existing management uses extrinsic
rewards well
 Intrinsic rewards are not utilized
 You have to learn to see what is
really broken

28. McGregor’s Observation
 Workers perceptions determine how
they respond to a policy or decision
 Don’t apply mechanical system
rewards and punishments when
intrinsic rewards are called for

29. McGregor’s Suggestion for
Improving Organizational
Effectiveness
 Independent teams become the operative
work groups
 Teams have high self control/self
regulation
 Supervision becomes support/instruction
 Teams help fulfill “social man” needs
 Teams remove reasons to fight the
system

30. Final Critique of McGregor
 Do teams really remove the reason to
fight the system?
 Describe the characteristics of a humane
Theory X. When would it be more
appropriate?
 What evidence do you see of this today?