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by Fiona Robertson

In the many studies of management that have been conducted over the past 50 years, it has been shown time and again that management style is dictated by the assumptions managers have about people generally – and specifically about the people under their authority.

In 1960, social psychologist Douglas McGregor attempted to explain the link between management and motivation. In The Human Side of Enterprise, McGregor explored a model that illustrated two very different styles of management, underpinned by two opposing mindsets, and looked at their subsequent behaviours and the impact these approaches could have on business. He called his findings Theory X and Theory Y and stated that businesses (or their managers) were either of one type or the other. While his depictions may seem a little exaggerated, they go a long way towards explaining the attitude of both managers and organisations as a whole, and the effects that these behaviours can have on a workforce and its productivity.

Theory X

Based on his observations, McGregor noticed that X-style managers hold the following beliefs :

1. The average person has an inherent dislike of work so will avoid it, if possible.
2. Consequently, people must be coerced, controlled and directed to work towards the achievement of organisational objectives, or threatened with punishment if their efforts aren’t adequate.
3. The average person prefers to be directed, wants to avoid responsibility, has relatively little ambition and wants security above all else.
4. People are inherently self-centred so are indifferent to organisational needs.
5. By nature, people are resistant to change.
6. Most people are fairly gullible and not that bright.

Theory X Characteristics

Given their management style, Theory X bosses are often referred to as autocratic or authoritative. They make decisions alone to retain their authority and expect staff to carry out their directives; meanwhile their goals are task-orientated and driven by deadlines, with emphasis placed on getting a job done to the exclusion of all else.

Staff who are managed by a Theory X boss will tend to feel undervalued and disengaged so, even though particular tasks are being driven through from above, their productivity levels will reflect their dissatisfaction.

A typical Theory X manager will demonstrate some or all of the following traits :

• intolerance and short-temperedness
• distance, detachedness, arrogance and elitism
• unhappiness and anti-social behaviour
• not participating or team-building
• shouting
• making demands, never asking
• never thanking or praising
• issuing deadlines and ultimatums
• issuing instructions, directions, edicts
• issuing threats to make people follow instructions
• a lack of concern for staff welfare or morale
• communicating one-way and being a poor listener
• pride, sometimes to the point of self-destruction
• fundamental insecurity and possible neurosis
• vengefulness and recrimination
• withholding rewards, and suppressing pay and remunerations levels
• scrutinising expenditure to the point of false economy
• seeking culprits for failures or shortfalls
• seeking to apportion blame instead of focusing on learning from the experience and preventing recurrence
• neither inviting nor welcoming suggestions
• taking criticism badly - and retaliating if this comes from below or peer group
• being poor at proper delegation - while believing they delegate well
• thinking that giving orders is delegating
• holding onto responsibility but shifting accountability to subordinates
• being relatively unconcerned about investing in anything to gain future improvements.

Theory Y

In contrast, Y Theory managers hold very different assumptions about their workforce and tend to believe that :

1. Physical and mental effort at work is as natural for people as play or rest.
2. External control and the threat of punishment are not the only means of inducing effort towards organisational objectives; a person will exercise self-control in the service of objectives to which they are committed.
3. A person’s commitment to objectives is a function of the rewards associated with their achievement. Rewards that satisfy ego needs and aid in self-actualisation are most significant (see Maslow’s Hierarchy of Needs), and these can result from efforts directed toward organisational objectives.
4. Under proper conditions, the average person learns not only to accept responsibility but to seek it out.
5. The capacity to exercise a relatively high degree of imagination, ingenuity and creativity in solving organisational problems is widely distributed in the population.
6. Within modern industrial conditions, only a small part of the intellectual potential of the average person is used.

Theory Y Characteristics

Theory Y managers exhibit a participative management style, in which they canvass their teams for ideas, delegate projects and give employees greater scope in the performance of their duties to enable them to give of their best. They presume that most people are ambitious, creative and self-motivated and therefore try to help staff to achieve their potential.

Being people-centric, Y managers focus on the relationships that exist between themselves and their staff, as well as between team members, to develop the unit as a whole. They also foster a sense of value and belonging amongst employees, resulting in good morale, high engagement scores and increased productivity. So although they don’t focus on tasks as such, tasks get done more efficiently by Theory Y managers because they have instilled a healthier and more cohesive working infrastructure in their departments.

Linking Management Style & Motivational Approaches

McGregor stated that companies and their management approaches fall broadly into either the X or Y categories and that both styles can achieve powerful results, if the appropriate motivational levers are applied. McGregor’s work was heavily influenced by that of Abraham Maslow, whose Hierarchy of Needs he took as the basis of his motivation model, and he meshed the two ideas together in the following way.

Theory X Motivators

Maslow’s Hierarchy states that there are certain deficiency needs which all people must address. If any of these needs are not being met and neutralised, they will become powerful motivators of behaviour : people will be compelled to attend to them and, if there is more than one type of need, they will always need to be addressed in the following order :

1. Physiological needs (biological necessities such as food, sleep, shelter, etc)
2. Safety needs (security from harm or threat, laws, boundaries, etc)
3. Belonging needs (relationships with others, belonging to teams, groups, society, etc)
4. Esteem needs (respect, acknowledgement, praise, success, etc).

McGregor linked Maslow’s ‘lower order’ deficiency needs with Theory X management techniques. In the same way that hunger must be attended to, so must an authoritarian boss who is threatening to withhold your benefits. In both instances, the urgency is pressing so this will preclude you from doing anything unnecessary until the fundamental problem has been dealt with - thus prompting deficiency-eliminating behaviour.

Theory Y Motivators

Maslow’s Hierarchy also cites a number of ‘higher order’ growth needs, which inspire us to achieve more as individuals. Unlike the deficiency needs listed above, these can never be sated or neutralised so they act as continuous motivational spurs of behaviour. Again, these follow a sequence of importance (the first need will always take precedence over the second and so on), which is as follows :

1. Cognition needs (learning, training, knowledge, research, etc)
2. Aesthetics needs (beauty, form, ambience, pleasure, etc)
3. Self-actualisation needs (achieving one’s own goals, realising one’s potential)
4. Transcendence needs (helping others to develop and achieve their best).

McGregor linked these growth needs with Theory Y management processes. If you accept that everyone wants to grow in terms of their personal development, then an organisation or manager that allows staff to do this - and positively encourages their learning and progression - will result in a happier, brighter and more accomplished workforce.

Application & Results

This means that, before you can motivate your organisation, its managers and the workforce, first you have to identify which style of management prevails at your company. Having established whether Theory X or Theory Y is dominant, you can then apply the appropriate lower or higher drivers to greatest effect.

Although both styles of management can be effectively enhanced by using the appropriate motivations, McGregor observed that the results obtained by Theory Y always outperformed those of Theory X.

Theory Z

Following the naming convention initiated by McGregor, in 1981 Dr William Ouchi published Theory Z: How American Management Can Meet the Japanese Challenge. Also known as Japanese management style, Theory Z turns McGregor’s idea around and looks at the relationship employees have with organizations rather than the way managers view their employees. Ouchi’s ideas focus on the ways in which an employee’s loyalty can be increased – a means of achieving exceptional employee engagement – so that staff can be entirely connected to the company for which they work.

In Japan, the working culture is such that employees tend to work for the same organisation for life, becoming part of the culture of the business which, in turn, looks after their needs and well-being, both on and off the job. By vesting all their efforts, time and way of life with a single corporation, employees become inherently connected with their business; in turn, this business addresses all their deficiency needs in the short term, plus their growth needs as they develop with the company over time. Such extended careers lead to stable employment, good morale and high rates of job satisfaction and therefore generate high levels of productivity.

Dr Ouchi’s work is based on the 14 Points created by Dr Edwards Deming, an American theorist whose management and motivational theories were used to restructure Japan’s organizational development and industrial revival after WWII. Some American firms have tried to apply the principles of Theory Z but their attempts have mostly proved unsuccessful. No doubt this is because the ideas contained in Theory Z are embedded in a different cultural approach to work, one which supposes a less fluid employment market and a focus on quality in all aspects of the work a business produces. Given that the Western approach to business is driven by cost (rather than quality) and shorter term goals (eg contracts rather than a lifetime’s employment), it has proved difficult to instil the approach of such a contrasting culture at work. Notable exceptions have been in the motor industry, where the principles of Kaizan – or continuous improvement – have spread with the global growth of Toyota, a company that lives Theory Z.

Applying X, Y & Z to Internal Communications

What is important for anyone working in a communication role is that Theory Z’s focus on employee satisfaction and engagement is now the key driver in internal communication. A Western reinterpretation of these principles is now at the heart of every major business worldwide, as organizations and their management strive to connect with their staff in meaningful and dynamic ways. Moreover, legislation, such as the EC’s Information and Consultation Directive, is backing these initiatives by setting such practices in law. However, some argue that legislation will merely fix best practice in concrete, rather than encouraging it to grow organically within organisations .

As yet, it seems that no one theory has managed to address all human motivation in business; but a fusion of Theory Y’s participative management style and Theory Z’s focus on employees looks like a constructive route to follow. And with the demographic changes taking place in Western Europe, where young talent is becoming more educated and more aspirational, it appears that businesses are being driven to offer Y and Z type workplaces, just to attract and retain quality staff.

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