What is theory x y and z?

Source: Syahrir via Adobe Stock

Employee Motivation

New business owners and managers at every level will rely on their employees to accomplish organizational goals. Whether the company in question is a massive corporation or a smaller start-up, employees will do their best work if they are properly motivated. Engaging individuals and maintaining their motivation is no small feat, but understanding a few theories of employee motivation will help managers to identify their leadership styles, as well as any shortcomings of their perspectives.

In the 1950s, a professor at MIT named Douglas McGregor developed a pair of theories pertaining to employee motivation, which he called Theory X and Theory Y. These theories actually act as antitheses of each other, offering two opposite approaches to management. McGregor asserts that the assumptions made by managers will determine their leadership style, and thus the method of motivation they use when interacting with employees. It’s important to note that he believed each of these theories to be fundamentally flawed, and therefore neither one is deemed the “correct” approach. Identifying these theories served more to identify leadership trends, and understanding which should be implemented in different situations.

Theory X

The first of McGregor’s theories, Theory X, offers a relatively pessimistic view of employee behavior. This theory makes the assumptionthat people naturally dislike engaging in work-related behaviors, and therefore must be strictly monitored. Managers who use Theory X see their employees as people who have no motivation, and assume all responsibility in rewarding and punishing these employees to get goals accomplished.

Theory X managers will typically lead with a more authoritarian mindset and be hesitant to delegate tasks. This approach can be useful when it's critical that all employees are closely monitored and completing the exact same tasks. However, a leader holding these assumptions will also signal to employees that their boss does not have confidence in their ability to work autonomously, therefore creating a barrier of trust between levels. Employees who work under a manager subscribing to Theory X will likely have stunted professional growth and find their job less enjoyable.

Theory Y

Theory Y is the alternative perspective proposed by McGregor, and holds the opposite assumptions of Theory X. Theory Y asserts that employees are naturally eager to work, and proud of the work they produce. This theory is based on the idea that the process of working is fulfilling in and of itself, allowing managers to take a more detached role. Employees under a manager who subscribes to Theory Y’s assumptions will exhibit more autonomy and exercise their critical thinking skills more often rather than relying on their boss to micromanage them.

Theory Y is a useful perspective in situations where creative thinking and individual problem solving is crucial to a team’s success. Managers who depend on their employees being self-reliant and benefitting from space will be more likely to make the assumptions presented by Theory Y. Subscribing to this belief completely, however, may leave newer employees with a lack of direction and cause confusion among a highly dispersed team.

Source: Education Library

This image offers a mnemonic device for remembering the difference between Theory X and Theory Y; the stick figure representing Theory X is displayed as being adverse to working, while the stick figure representing Theory Y is portrayed as enthusiastic about their job.

Theory Z

These theories have stood the test of time to create a foundational understanding of how managers view their employees, and the implications of these management styles. In 1981, a third theory was proposed by William Ouchi, who offered a more nuanced approach known as Theory Z. Theory Z suggests a third perspective which managers can take which emphasizes the individualism of employees, and calls for them to gain a holistic experience at work.

Ouchi's Theory Z is concerned less with employees’ natural state of motivation, and instead describes a method in which managers can empower employees to become well-rounded assets to their company. Theory Z asserts that employees should become “generalists” in their roles rather than pigeonholing themselves into a specialty. By establishing a strong company culture and encouraging employees to buy into the organization’s values, Ouchi argues that employees will be motivated to contribute to organizational goals. In other words, Theory Z creates an environment conducive to employee engagement rather than relying on employees’ natural state of motivation.

Theory Z allows for managers to view and treat their employees as complex human beings, straying away from the one-dimensional perspectives offered by Theory X and Theory Y. By implementing Theory Z, managers can maximize the efficiencyof their employees. Workers acting under a manager who subscribes to the assertionsof Theory Z will identify with the company’s values, and be enthusiastic about being an equal partner in aiding organizational success. While this theory requires managers to put more effort into their team’s dynamics, it promises a more effective team where mutual trust exists between different levels.