Douglas McGregor observed two diametrically opposing viewpoints of managers ‘about their employees; one is negative called “Theory of X” and another is positive called “Theory of Y”.

Theory of X

Following are the assumptions of managers who believe in the “Theory of X” regarding their employees.

• Employees dislike work.
• Employees must be coerced, controlled or threatened to do the work.
• Employees avoid responsibilities and seek formal direction.
• Most employees consider security of job, most important of all other factors in the job and have very little ambition.

Theory of Y

Following are the assumptions of managers who believe in the “Theory of Y” regarding their employees.

• Employees love work as play or rest.
• Employees are self-directed and self-controlled and committed to the organizational objectives.
• Employees accept and seek responsibilities.
• Innovative spirit is not confined to managers alone, some employees also possess it.

Applicability of Theories ‘X’ and ‘Y’

Theory ‘X’ in its applicability, places exclusive reliance upon external control of human behavior, while theory ‘Y’, relies heavily on self-control -and self-direction.

Theory ‘X’ points to the traditional approach of management. Literally, this theory of behavior is related to organizations that lay hard and rigid standards of work-behavior. Some examples of such organizations are organizations that break down jobs into specialized elements, establish ‘norms of production, design equipment to control worker’s pace of work, have rigid rules and regulations, that are sometimes very vigorously enforced.

Theory ‘Y’, on the other hand, secures the commitment of employees to organizational objectives. This motivational theory places emphasis on satisfaction of employees. While applying this theory, the use of authority, as an instrument of command and control is minimal. Employees exercise self-direction and self-control.

The concepts of ‘Job’ Enlargement’, ‘Participation’ and ‘Management by Objectives’ are quite consistent with theory ‘ Y’.

McGregor supports the applicability of motivational theory ‘Y’, instead of theory ^‘X’. Organization should keep in mind that once theory ‘X’ is employed for organizational working, it is difficult for the management to shift to theory ‘ Y’, all of a sudden. However, with systematic, judicious and slow steps, shifting in the practical applicability of theory ‘X’ to theory ‘ Y’ usually can be achieved.