The limitations of Theory X and Theory Y (Douglas Mcgregor)

Definition of Theory X and Theory Y:

Theory X and Theory Y was an idea started by Douglas Mcgregor in the year 1960. It was first
published in his book The Human Side of Enterprise. Both theories centre around the
Management Styles in a working environment.
Theory X applies to individuals whom are reluctant to work and need to be urged to work in most
cases and are more inclined to work for extrinsic rewards, and as such, an authoritarian
style needs to be adapted in order to keep these individuals in line. It highlights the limitations of
manpower within an organization, and that an authoritarian style needs to be used in order to
correct these limitations.
Theory Y applies to individuals who have a high level of autonomy within a workplace. The
authoritarian style from Theory X is highly ineffective on them, as these individuals have a high
degree of self-direction, crave for intrinsic rewards, and show an unwavering commitment towards
achieving any given objectives. A participative style is much more suited to these individuals
as more participation means that these individuals can easily satisfy their intrinsic needs of
self-respect
and
achievements.

Five Important Limitations about Theory X & Theory Y:

1. Theory X style of management fosters a very hostile and distrustful atmosphere- An

authoritarian organization requires many managers just because they need to constantly control
every single employee, and the method of control usually involves a fair amount of threat and
coercion.
At times, an employer that is overly threatening will lead to dissatisfaction among employees,
or they might even attempt to blame each other in order to save themselves from the threats.
Conversely, Coercion might work better with the prospects of bigger rewards for more, but
employees might purposelytry to cheat or attempt to hide the truth itself. Also, employees might
try to sabotage the efforts of each other in order to make it easier for them to achieve the
rewards.

2. Theory Y style of management is tough to uphold in reality- The core belief of Theory Y, is
that with the right support and the right environment, self-directed employees will be able to
perform their jobs well. However, because every individual is different from one another, creating
an environment which fits all does not sound very practical in the current era of
organizations.

3. Theory X and Theory Y is very hard to be used with each other- Just because we think that
utilizing different theories in order to accommodate different types of employees does not mean
that it would be beneficial to the companies. In the end, the human labor of the company might

be improved, but at the cost of creating monetary loses as well as inefficient allocation of
resources.
For example, a company decides to use both theories together. So, in order to accommodate the
need of employees who are managed based on Theory X, more employers will need to be hired and
paid. The company also needs to pay and to create a comfortable environment for employees that
are self-motivated based on a theory Y concept. It costs a small fortune for the company to cater to
the different tastes of so many employees. It is estimated that the company spending would be high
enough based on these factors alone.
Therefore, it might just be more beneficial for the company to utilize a single theory and hire
employees that can be consistently managed with that theory alone.
4. Theory X and Theory Y makes employment harder- Previously, Ive said that companies
should only use a single theory at once. The theory that should be used is the one that can
effectively manage all employees within the organization.
However, this in turn causes a problem during the employment process, because it is likely that a
company will reject an applicant solely because he/she is not consistent with the theory that
the company uses.
Therefore, if companies actually follow these theories closely, it will be harder for potential
candidates to get a job just because the company cannot handle their characteristics within
the workplace and may give candidates that the company discriminates heavily upon its
applicants.

5. Theory X and Theory Y work on assumptions- I think organizations should be careful, and not
rely too heavily on Theory X and Theory Y because there are a lot of assumptions.
The workforce is changing nowadays, and the workplace is a dynamic mix of employees from
different backgrounds, races and genders. Also, employees might have completely different
motivations and goals for choosing to work within an organization.
Nowadays, an employee from Generation X might come into the workforce from his/her previous
retirement, and Generation Y employees might be wrongly perceived as slackers for relying more
on technology to manage their meetings and make their jobs easier .
There are so many other factors that influence the employee behaviour within an organization in this
current era, soTheory X and Theory Y may even be slightly obsolete.

Features of Mcgregors Theory X and Theory Y of

Motivation!
Prof. Douglas McGregor has developed a theory of motivation of the
basis of hypotheses relating to human behaviour.

According to McGregor, the function of motivating people involves

certain assumptions about human nature. There are two alternative
sets of assumptions which McGregor has described as Theory X and
Theory Y.
Theory X:
Theory X of motivation is based on the following
assumptions:
1. The average individual is by nature indolent and will avoid work if
he can.
2. The average person lacks ambition, dislikes responsibility, and
prefers to be led.
3. An average human being in inherently self-centred, and indifferent
to organisational goals.
4. Most people are by nature resistant to change and want security
above all.
5. The average individual is gullible, not very bright, the ready victim
of the schemer.
On the basis of these assumptions, the conventional view of
management puts forward the following propositions:
1. Management is responsible for organising the elements of
productive enterprisemoney, materials, equipment, peoplein the
interest of economic gain.

2. With respect to people, management involves directing their efforts,

motivating them, controlling their actions and modifying their
behaviour to fit the needs of the organisation.
3. Without active intervention by management, people would be
passiveeven resistant to organisational needs. They must, therefore,
be persuaded, rewarded, punished and controlled.
The above assumptions are negative in nature. Therefore, Theory X is
a conventional or traditional approach to motivation. External control
is considered appropriate for dealing with unreliable, irresponsible
and immature people. According to McGregor, an organisation built
upon Theory X notions will be one in which there is close supervision
and control of subordinates and high centralisation of authority.
Leadership in such an organisation will tend to be autocratic, and
workers will have very little (if any) say in decisions affecting them.
The climate in a Theory X organisation tends to be impersonal and the
theory suggests carrot and stick approach to motivation.
Theory Y:
Theory Y is based on a faulty conception of human nature. McGregor
recognised certain needs that Theory X fails to take into account.
These relate to self-fulfillment, ego satisfaction and the I social needs
of individual workers. To meet these human needs in business,
McGregor suggested a counter approach to management which he
called Theory Y.
This theory proposes that:

1. Management is responsible for organising the elements of

productive enterprise in the interest of economic and social ends.
2. People are not by nature passive or resistant to organisational
needs. They become so 3 as a result of experience.
3. Motivation, potential for development, capacity for assuming
responsibility and readiness to direct behaviour towards
organisational goals are present in people, management does not put
them there. It is the responsibility of management to make it possible
for people to recognise and develop these characteristics for
themselves.
4. The essential task of management is to arrange organisational
conditions and methods of operations so that people can achieve their
own goals best by directing their own efforts towards organisational
goals.
Theory Y is based upon the following assumptions:
1. The expenditure of physical and mental efforts in work is an natural
as play and rest. The average human being has no inherent dislike for
work. Work, if meaningful, should be a source of satisfaction and it
can be voluntarily performed.
2. Man will exercise self-control and self-direction in the service of
objectives to which he is committed. External control or threat of
punishment is not the only means of motivating people to work and
achieve organisational goals.

3. Commitment to objectives is a result of the rewards associated with

their achievement. The most significant of such rewards, e.g., the
satisfaction of ego and self-development needs, can be the direct result
of effort directed towards the organisational objectives. Once the
people have selected their goal, they will pursue it even without close
supervision and control.
4. The average human being, under proper conditions, does not shun
responsibility. He is ready not only to accept responsibility but to seek
it. Avoidance of responsibility, lack of ambition, etc. are consequences
of experience rather than being inherent in human nature.
5. The capacity to exercise a relatively high degree of imagination,
ingenuity and creativity in the solution of organisational problems is
widely, not narrowly, distributed in population.
6. Under conditions of modern industrial life, the intellectual
potentialities of people are only partially utilised. In reality, people
have unlimited potential.
Theory Y represents a modern and dynamic nature of human beings.
It is based on assumptions which are nearer to reality. An organisation
designed on the basis of Theory Y is characterised by decentralisation
of authority, job enrichment, participative leadership and two-way
communication system.
The focus is on self-control and responsible jobs. Theory X places
exclusive reliance on external control of human behaviour while
Theory Y relies on self-control and self-regulation, The difference is
the difference between treating people as children and treating them

as mature adults. After generations of the former cannot expect to

shift to the latter overnight.

Difference between Theory X and Theory Y of Motivation

and its Critical Appraisal!

Critical Appraisal:
McGregors theory of motivation is simple. It helped to crystallise and
put into right perspective the findings of the Hawthorne Experiments.
It has generated wide ranging and lasting interest in the field of
motivation. This theory offers a convenient framework for analysing
the relationship between to motivation and leadership style.
Despite its significance; McGregors theory has been criticised for
various reasons. First, it tends to over-generalise and over-simplify

people as being one way or the other. People cannot be put into two
extreme patterns or stereotypes. The theory overlooks the complex
nature of human beings. No enterprise man may belong exclusively
either to Theory X or to Theory Y.
He may share the traits of both, with emphasis shifting from one set of
properties to the other with changing motives (internal), and varying
(external) environment. Secondly, McGregors theory squeezes all
managerial styles and philosophies into two extremes of conduct
which is devoid of reality.
Thirdly, McGregoer suggests tacitly that job itself is the key to
motivation. But all persons do not look for motivation in the job and
not all work can be made intrinsically challenging and rewarding.
Lastly, some managers may have Theory Y assumptions about human
nature, but they may find it necessary to behave in a very directive and
controlling manner with some people in the short run to help them
grow up in a developmental sense until they are truly Y people.
A question often posed in which theory (X or Y) is better. Most people
believe that Theory Y is more desirable and productive. But it may not
be the best approach for all situations. Theory X might be more
suitable in some crisis situations but less appropriate in more routine
and formalised situations. In some under-developed countries like
India Theory X may still be useful at the lower levels of organisation.
Neither Theory X nor Theory Y is the best for all situations. An
amalgam of both the theories may be more useful than either of the
two alone. The best approach to motivation is one that is appropriate
to the situation.

The appropriate theory is contingent upon the nature of the work to be

done and the particular needs of the individual. In other words,
contingency approach is the best approach to motivation. McGregors
theory is an improvement over the traditional view that you can
motivate employees by paying them more money.