Theory X
In this theory, which has been proven counter-effective in most modern practice, management assumes employees are inherently lazy and will avoid work if they can and that they inherently dislike work. As a result of this, management believes that workers need to be closely supervised and comprehensive systems of controls developed.
A hierarchical structure is needed with narrow span of control at each and every level.
According to this theory, employees will show little ambition without an enticing incentive program and will avoid responsibility whenever they can. According to Michael J. Papa (Ph.D., Temple University; M.A., Central Michigan University; B.A., St. John’s University), if the organizational goals are to be met, theory X managers rely heavily on threat and coercion to gain their employee's compliance.
Beliefs of this theory lead to mistrust, highly restrictive supervision, and a punitive atmosphere.
The Theory X manager tends to believe that everything must end in blaming someone. He or she thinks all prospective employees are only out for themselves. Usually these managers feel the sole purpose of the employee's interest in the job is money. They will blame the person first in most situations, without questioning whether it may be the system, policy, or lack of training that deserves the blame.
A Theory X manager believes that his or her employees do not really want to work, that they would rather avoid responsibility and that it is the manager's job to structure the work and energize the employee.
One major flaw of this management style is it is much more likely to cause Diseconomies of Scale in large businesses.
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Theory Y
In this theory, management assumes employees may be ambitious and self-motivated and exercise self-control. It is believed that employees enjoy their mental and physical work duties.
According to Papa, to them work is as natural as play[1]. They possess the ability for creative problem solving, but their talents are underused in most organizations. Given the proper conditions, theory Y managers believe that employees will learn to seek out and accept responsibility and to exercise self-control and self-direction in accomplishing objectives to which they are committed.
A Theory Y manager believes that, given the right conditions, most people will want to do well at work. They believe that the satisfaction of doing a good job is a strong motivation. Many people interpret Theory Y as a positive set of beliefs about workers.
A close reading of The Human Side of Enterprise reveals that McGregor simply argues for managers to be open to a more positive view of workers and the possibilities that this creates. He thinks that Theory Y managers are more likely than Theory X managers to develop the climate of trust with employees that is required for human resource development.
It's here through human resource development that is a crucial aspect of any organization. This would include managers communicating openly with subordinates, minimizing the difference between superior-subordinate relationships, creating a comfortable environment in which subordinates can develop and use their abilities. This climate would include the sharing of decision making so that subordinates have say in decisions that influence them.
This theory is a positive view to the employees, meaning that the employer is under a lot less pressure than someone who is influenced by a theory X management style.
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(Source: Wikipedia.org)
