Douglas McGregor was a management professor at the MIT Sloan School of Management. He wrote a book in 1960 called The Human Side of Management, which suggested motivating employees through authoritative direction and employee self-control. McGregor's book was voted the fourth most influential management book of the 20th century in a poll of the Fellows of the Academy of Management.
McGregor's main theory is comprised of Theory X and Theory Y. Theory X, based more on classical management theory, assumes that workers need a high amount of supervision because people are inherently lazy. Theory Y assumes that employees are ambitious, self-motivated, exercise self-control, and generally enjoy mental and physical work duties. Theory Y is in line with behavioral management theories. Often, managers' actions toward their employees are affected by the theory to which they subscribe.
Theory X
In Theory X, managers tend to micro-manage and closely supervise employees. Complex hierarchical structures are needed in order to offer a narrow span of control at every level of the organization. Employees show little ambition without an incentive program and avoid responsibility whenever possible. Managers in Theory X rely more heavily on punishment, fear, and coercion as motivational techniques and less on reward. Managers and employees in this theory are generally mistrusted and they do not have rewarding relationships. Usually these managers believe that the sole purpose of the employee's interest in the job is money.
Theory Y
Theory Y managers are generally the opposite. They believe that given the proper conditions, employees will learn to seek out and accept responsibility and to exercise self-direction in accomplishing objectives, that most people will want to do well at work, and that the satisfaction of doing a good job will be a strong motivation. Many people interpret Theory Y as a positive set of beliefs about workers.
McGregor 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. This type of human-resource development is much more similar to the behavioral management theories of Maslow's self-actualization and the Hawthorne studies than any of the classical theories of management.
Theory X or Theory Y?
Theories X and Y relate to Maslow's hierarchy of needs in that they see human behavior and motivation as the main priority in maximizing output in the workplace. Both McGregor and Maslow would say that in order to help employees achieve maximum efficiency and happiness with their work, a Theory Y manager would need to promote morality, creativity, problem solving, and a lack of prejudice. McGregor was a lifetime proponent of Theory Y.
Modern organizations in developed countries generally side with McGregor, in that they believe Theory Y is superior in getting positive results from employees (and subsequently job satisfaction for employees). However, both theories are still prominent in the workplace, where many managers treat their employees as if they are lazy and likely to perform poorly without stringent rules and supervision. In management, just as everywhere else, it is difficult to effect social change in the face of human nature, even when the benefits are established.