McGregor’s Theory X and Theory Y


  • McGregor developed a philosophical view of humankind with his Theory X and Theory Y in 1960. His work is based upon Maslow’s Hierarchy of Needs, where he grouped the hierarchy into lower-order needs (Theory X) and higher-order needs (Theory Y).
  • He suggested that management could use either set of needs to motivate employees, but better results would be gained by the use of Theory Y, rather than Theory X. These two views theorized how people view human behavior at work and organizational life.

Understanding the Theories

  • Your management style is strongly influenced by your beliefs and assumptions about what motivates members of your team: If you believe that team members dislike work, you will have an authoritarian style of management; On the other hand, if you assume that employees take pride in doing a good job, you will tend to adopt a more participation style.

Theory X

– Theory X assumes that employees are naturally unmotivated and dislike working, and this encourages an authoritarian style of management. According to this view, management must actively intervene to get things done. This style of management assumes that workers:

  • Dislike working.
  • Avoid responsibility and need to be directed.
  • Have to be controlled, forced, and threatened to deliver what’s needed.
  • Need to be supervised at every step, with controls put in place.
  • Need to be enticed to produce results; otherwise they have no ambition or motivation to work.

Theory X Continued

  • X-Type organizations tend to be top heavy, with managers and supervisors required at every step to control workers. There is little delegation of authority and control remains centralized.
  • McGregor recognized that X-Type workers are in fact usually the minority, and yet in large scale production environment, X Theory management may be required and can be unavoidable.

Theory Y

  • Theory Y shows a participation style of management that is de-centralized. It assumes that employees are happy to work, are self-motivated and creative, and enjoy working with greater responsibility. It assumes that workers:
  • Take responsibility and are motivated to fulfill the goals they are given.
  • Seek and accept responsibility and do not need much direction.
  • Consider work as a natural part of life and solve work problems imaginatively.

Theory Y Continued

  • This management style tends to be more widely appropriate. In Y-Type organizations, people at lower levels of the organization are involved in decision making and have more responsibility.

Comparing Theory X and Theory Y

  • Motivation
    Theory X assumes that people dislike work; they want to avoid it and do not want to take responsibility. Theory Y assumes that people are self-motivated, and thrive on responsibility.
  • Management Style and Control
    In a Theory X organization, management is authoritarian, and centralized control is retained, while in Theory Y, the management style involves employees in decision making, but retains power to implement decisions.
  • Work Organization
    Theory X employees tend to have specialized and often repetitive work. In Theory Y, the work tends to be organized around wider areas of skill or knowledge; Employees are also encouraged to develop expertise and make suggestions and improvements.
  • Rewards
    Theory X organizations work on a ‘carrot and stick’ basis, and performance is part of the overall mechanisms of control. In Theory Y organizations, appreciation is also regular and important, but is usually a separate mechanism from organizational controls. Theory Y organizations also give employees frequent opportunities for promotion.


  • Although Theory X management style is widely accepted as poor to others, it has its place in large scale production operation and unskilled production-line work. Many of the principles of Theory Y are widely adopted by types of organization that value and encourage participation. Theory Y-style management is suited to knowledge work and professional services. Professional service organizations naturally evolve Theory Y-type practices by the nature of their work; Even highly structure knowledge work, such as call center operations, can benefit from Theory Y principles to encourage knowledge sharing and continuous improvement.


  • Understanding your assumptions about employees motivation can help you learn to manage more effectively.
  • Thank You for Listening!