Theory X and Y

From CEOpedia | Management online

Theory X and Y are two concepts about employees' motivation in the workplace. They were first introduced by a social phycologist, Douglas McGregor, in late 1960's. In his book, called, "The Human Side of Enterprise", McGregor talks about two approaches to management: authoritarian, which refers to Theory X, and participative, in the case of Theory Y[1].

Theory X

In Theory X an average employee is perceived to be uninterested to his or her job and have a negative attitude towards responsibility or initiative. When such style of management is used, employees usually perform repetitive tasks, and appraisals focus on quantitative results, which can be profit margins, revenues, etc.

Main assumptions of Theory X

  • People do not enjoy their job and try to avoid it if there is a possibility.
  • Employees need continuous guidance from their supervisors.
  • Managers have to warn people with punishments in order to make them do the necessary work.
  • Employees do not take initiative in their tasks.
  • Responsibility is highly avoided.
  • People are opposed to any kind of change and try to resist it for as long as possible.
  • Security, specifically in their job, is the priority for people.
  • Employees lack ambition and need materialistic incentives, rewards to stay involved in work.

When describing Theory X in his book McGregor makes a connection to Maslow's famous hierarchy of needs. In the case of this theory employees have lower-level needs, which can be fulfilled with monetary benefits. In addition to this, McGregor insists that once a certain need is satisfied, the motivation behind it disappears. Therefore, this form of motivation in the workplace is not the most effective or long-lasting, since people would need constant incentives to stay committed to their job[2].

Theory Y

Theory Y proposes a juristically different perception of people, where initiative and responsibility are welcomed. The approach used by managers is built on trust and involves collaboration between superiors and their subordinates. Contrary to Theory X, appraisals are based on communication opportunities for development of employees.

Main Assumptions of Theory Y

  • People enjoy their job and are happy to accept responsibility.
  • Employees are creative when solving problems.
  • Challenges are viewed as a positive thing.
  • Employees play a bigger role in decision-making process.
  • There is no need for intense and constant supervision.
  • Workers are not afraid to show initiative and take on challenging tasks.
  • Incentives and rewards revolve around higher-level needs, specifically, self-fulfilment.
  • If their work meets the needs and is rewarding, employees show strong commitment to the company.

Just as it was mentioned before for Theory X, Theory Y also correlates with Maslow's hierarchy of needs. The difference is that in this case the focus is on self-fulfilment and esteem needs. This allows managers to align the objectives of the company with individual objectives of employees[3].

Theory Y and Project Management

In today's world, not many organizations use Theory X, but rather favour Theory Y. Therefore, there are various techniques that managers, with participative approach, implement to motivate employees[4].

  • Enlargement. This method involves widening the scope of an individual's job, which allows for new opportunities, variety, creativity. As a result, needs of esteem and self-fulfilment are satisfied.
  • Participation and Engagement. Managers work in closer collaboration with their team members, include them in the decision-making process. Consequently, when employees have some control over those decisions, they are able to organise their personal work environment more effectively.
  • Decentralization. Companies decrease the amount of higher levels of management, decentralize authority. This results in more subordinates under the supervision of one manager, and delegation of certain responsibilities to the subordinates.
  • Setting objectives. Encouraging employees to set goals for themselves and perform self-assessment at the end of each task. This activity makes people more welcoming of challenges an responsibility.

Examples of Theory X and Y

Theory X:

  • Theory X assumes that employees are naturally unmotivated, do not like work, and need to be forced or coerced into completing tasks. This type of management style is often authoritarian, with managers making all the decisions and employees having limited input. An example of this is a strict supervisor who refuses to consider any suggestions from their team and insists on having their orders followed without question.
  • Theory X assumes that employees will avoid responsibility and prefer to be told what to do. An example of this is a manager who assigns tasks without allowing employees to use their own initiative or creativity.

Theory Y:

  • Theory Y assumes that employees are interested in their work, have a strong sense of responsibility, and are able to use their own initiative to complete tasks. This type of management style is more participative, with managers encouraging their team to come up with creative solutions and take ownership of their work. An example of this is a manager who encourages their team to develop innovative solutions and provides them with the resources they need to do so.
  • Theory Y assumes that employees are motivated by more than just money, and can be encouraged to work hard through recognition and rewards. An example of this is a manager who rewards outstanding employees with bonuses or promotions.

Advantages of Theory X and Y

The advantages of Theory X and Y are that they provide managers with two different approaches to motivating their employees.

  • Theory X states that employees are naturally lazy and need to be controlled and threatened with punishment in order to be productive. This approach can be effective in certain scenarios, such as in a highly competitive workplace where employees need to be kept on task.
  • Theory Y focuses on the idea that employees are self-motivated and can be encouraged and empowered to reach their goals. This approach is often more successful in creating a positive work environment, as it provides employees with the motivation to work hard and reach their potential.
  • Both theories provide a framework for managers to evaluate their approach to employee motivation, allowing them to identify which methods are more effective and which need improvement.

Limitations of Theory X and Y

Theory X and Y, introduced by social phycologist Douglas McGregor in his book, "The Human Side of Enterprise", are two concepts about employees motivation in the workplace. Both of them have certain limitations, including:

  • Theory X assumes employees do not willingly take responsibility, and must be closely supervised. This approach limits the potential of employees to use creativity and develop new ideas.
  • Theory Y assumes employees are self-motivated, but this may not always be true in all cases.
  • Both theories can be seen as overly simplistic and fail to capture the complexities of motivation in the workplace.
  • Theory X and Y fail to take into account the role of external factors, such as the environment, on the motivation of employees.

Other approaches related to Theory X and Y

Theory X and Y are two concepts about employees motivation in the workplace, first introduced by a social phycologist, Douglas McGregor, in late 1960s. Besides these two approaches, there are several other approaches related to Theory X and Y. These include:

  • Theory Z: This approach was developed by William Ouchi in the late 1970s and focuses on combining Japanese and American management styles, such as long-term employment, involvement in decision making and a focus on quality of work.
  • Theory W: This approach was developed by Edgar Schein and focuses on a combination of Theory X and Y management styles, emphasizing the importance of both a participative and authoritarian approach.
  • Theory U: This approach was developed by Otto Scharmer and focuses on the development of a "learning organization" in which employees are encouraged to work together and share their knowledge.

In conclusion, there are a number of different approaches related to Theory X and Y, each with their own unique focus and emphasis. These approaches provide managers with a range of options when it comes to motivating their employees.


  1. Douglas McGregor (2006) "The Human Side of Enterprise, Annotated Edition", Published by McGraw Hill Professional, Massachusetts
  2. Stoyan Stoyanov, Monique Diderich, (2017), "An analysis of Douglas McGregor's The Human Side f Enterprise", Published by CRC Press, p.35
  3. Stoyan Stoyanov, Monique Diderich, (2017), "An analysis of Douglas McGregor's The Human Side f Enterprise", Published by CRC Press, p.37
  4. Rory Burke, Steve Barron, (2014) Project Management Leadership: Building Creative Teams, Published by John Wiley & Sons, p. 84-87

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Author: Daria Boiko