THEORY X and THEORY Y
The standoff in Wisconsin as to the rights of the public workers to have or not to have collective bargaining comes down to one's attitudes as to the psychology of motivation. In this connection the work of Douglas McGregor is highly illuminating.
Douglas McGregor taught psychology and industrial management at MIT and was president of Antioch College from 1948 to 1954. In 1960 he published The Human Side of Management, in which he introduced the concept of Theory X and Theory Y styles of management.33
Theory X was McGregor’s name for the style of management most in use at the time. In this style, management and workers were pitted against each other in constant struggle. Managers believed that employees were basically lazy, shiftless, undisciplined, and unconcerned about issues relating to the company, such as quality of product and/or service and maintaining cost controls. In order to maintain quality and reduce costs as well as keeping workers on task, managers had to act as overseers. In addition, Theory X holds that most people do not like to have responsibility, and prefer to be told what to do and to have decisions made for them.34
Interestingly, McGregor found that “while many managers would disavow these assumptions..., the majority do, in fact, behave as if they believed them to be true [italics the author’s], and that classical organization theory could only be based on the proposition that they are true.”35
Theory X is an elitist theory that extends directly from the separation between the nobility and the common man that was the foundation of 19th century and earlier management-worker relations. It is a form of negative reinforcement, and the social sciences in the mid part of the century learned that positive reinforcement produced better learning and promoted less stress in the subject.
One of the most important realizations of modern educational psychology is that the behaviour of a subject will frequently change to fit the observer’s opinions of the subject. For example, if a student is placed in a class with a teacher, and the teacher is told that the student is a troublemaker, the teacher will treat the student as if she is a troublemaker, and the student will change her behaviour to meet the teacher’s expectations. In experiments in the 1960s, teachers agreed that their students were brilliant or problematic based entirely upon information provided to the teachers sub rosa. In the workplace, “lack of productivity was an effect, not a cause, of the way that conventional management treated people.”36
What McGregor realized was that even if the ideas about workers held by Theory X managers are untrue, when treated as they were by these managers, the workers came to adopt those behaviours. If workers are never permitted to make decisions, and if all of the decisions they do attempt to make are second-guessed, eventually they will stop making decisions and seek all direction from their managers.
What McGregor proposed instead was Theory Y, based on new discoveries in the social sciences. The assumptions in Theory Y are:
The expenditure of physical and mental effort in work is as natural as play or rest.
Control and punishment are not the only ways to make people work; man will direct himself if he is committed to the aims of the organization.
If a job is satisfying, then the result will be commitment to the organization.
The average man learns, under proper conditions, not only to accept but to seek responsibility.
Imagination, creativity, and ingenuity can be used to solve work problems by a large number of employees.
Under the conditions of modern industrial life, the intellectual potentialities of the average man are only partially utilized.37
McGregor believed that generally, workers would act like mature adults, and would make the goals of the company their goals. If management explained why certain actions were necessary for the good of the company, and presumably, the long term good of the company’s employees, workers would cooperate without browbeating. In the real world, we have seen this time and time again as a group of employees agrees to put off raises, or even to take a pay cut to help a company through tough times. This is behaviour that Theory X would not understand, believe possible, or be able to evoke.
“It was quite an article of faith, this Theory Y. Everything about the structure of corporations went against it: the perks and power structure of the hierarchy, the labour relations tradition, the curricula at most business school (including MIT), and all those devices like performance appraisals, that measured one person against another. Adopting Theory Y would mean giving up both the stick (threatening to fire people) and the carrot (bribing them or being paternalistic). Without those two weapons, what leverage did a manager have? Only the ability to spark other people’s involvement and commitment, by giving them the opportunities to do good work—hardly a strong incentive by conventional standards.
“Yet McGregor had noticed, in a decade of corporate consultation, that the most effective managers always seemed to hold Theory Y in their hearts. Many of them had seen firsthand—and this was the factor that made some managers in the audience take McGregor seriously—the obvious bankruptcy of both the carrot and the stick. They could discipline workers and make them show up, but the old methods never managed to get people to act with care and commitment.”38
McGregor realized that his suggested changes would be very difficult, perhaps even impossible to implement in their entirety, but he strongly believed that “staff will contribute more to the organization if they are treated as responsible and valued employees.”39
In addition to his revolutionary work in management theories, McGregor is credited with inadvertently fathering the Human Potential Movement.40
In my opinion cooperation and respect for individual differences beats force and my way or the highway every time.