Leadership Skills

Theories X, Y, and Z

In the 1960s, Douglas McGregor identified two theories of management that he called Theory X and Theory Y. The main difference between these two theories was the attitude of the manager towards employees. These both have to do with how the manager view motviation. Because these two theories seemed rigid, three separate psychologists developed a third approach: Theory Z. During the 1980s, William Ouchi connected Theory Z with a then popular Japanese management style that takes into account the organizational culture and the values within each culture.

These theories may be described as:

• Theory X: Employees are like cogs on a wheel, and they will only work when motivated (i.e., forced) to work. Those with a Theory X attitude believe that workers are unmotivated and dislike their jobs. Some Theory X managers use fear to motivate employees, and that leads to stress. Leading with this style is a top-down, authoritative approach where the leader has complete control, and followers comply with demands.
• Theory Y:  This is a participatory mangement style. Workers like working and are motivated by their tasks. Leading with this approach allows shared responsibility and ownership of the work. .
• Theory Z:  Managers using Theory Z believe in shared trust. Employees can be trusted to do their tasks, and managers will support them in those duties. This creates a positive organizational climate with high moral, loyalty, and employee satisfaction. This is a participatory management style, but it is not for every organization.

While McGregor viewed Theory Y as a good management style, there are situations where Theory X works well, e.g., production assembly lines and unskilled labor. Theory X allows provides strict guidelines and rules that allow work to be accomplished. On the other hand, Theory Y is the best style when working with people who particiate in group projects and have career knowledge and skills. In the last few years, Theory Z has been used less often in organizations. The main two management styles remain Theory X and Theory Y.

Are you more of a Theory X or Theory Y manager? Take this short assessment.