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Just contemplate on the considerable management skills required, by the ancient Egyptians in building their pyramids, the massive workforce that build the Taj Mahal or the ancient Romans when building their roads! Chinese philosophers by 289BC were using conceptual models and systems that are now familiarly termed production management techniques. They were also aware of the advantages of the division of labor. The ancient Greeks, on their part, practiced uniform work methods.

From the earliest available records, it is fairly obvious that the idea of organizing groups of people to work together to achieve a planned goal has been around a long time. Coordinating and controlling their efforts to achieve desired results is not a new concept either. Though the term scientific management did not become official until the latter part of the 19th Century, its practice was very much in place.

Managing people under the pressure of day-to-day business, is an organizational aspect that needs critical attention. Douglas McGregor's X-Y theory is a simple reminder of the natural rules that govern people management.

Way back in 1960, McGregor, an American social psychologist, proposed his famous X-Y theory in his book 'The Human Side Of Enterprise'. The X-Y Theory defines a basic principle to develop positive management style and techniques that remains valid even today - it remains central to organizational development, and to improving organizational culture. 

The two fundamental approaches to managing people 

Theory X assumes that - Firstly, the average human has an inherent dislike of work and tries to avoid it whenever he can. Secondly owing to this dislike for work, most people must be controlled and threatened before they will work hard enough. Also, the average human prefers to be directed, dislikes responsibility, is unambiguous, and desires security above everything.

Theory Y projects an opposing perception to how people view human behavior at work. It assumes that the organizational management's role is to develop the potential in employees and help them direct it towards common goals.

Based on social science research, these demonstrate the potential present in man, which organizations should recognize in order to become more effective. McGregor clearly saw the distinct attitude each theory represents.

The two theories compared

"The Human Side of Enterprise" explains how Theory Y affects the management of promotions and salaries and the development of effective managers, as well. According to the author, Theory Y is helpful in participative problem solving. Sometimes, to obtain the employee's commitment, it is better to explain the matter fully so that he understands the gravity of the situation and therefore the purpose of a proposed action. He will then be motivated and exert self-direction and control to do better work. Such a practice might even result in better working methods; but this wouldn't be possible if he was simply carrying out an order that he had not even comprehended fully, in the first place.

A situation in which employees can be consulted, because they are emotionally mature, and positively motivated towards their responsibilities is conducive to the participative approach. It could produce considerably improved results besides rooting out problems as compared to the approach of handing out authoritarian orders.

These theories are still referred to in the field of management and motivation though studies, later on, questioned the rigidity of the model. They have given rise both to tough management practices with punishments and tight controls, as also the soft management, which aims at harmony at work.

Theory X ('authoritarian management' style)

• The average person
• Dislikes work and will avoid it if he can
• Must be coerced to work with the threat of punishment towards organizational objectives
• Prefers to be directed
• Tends to avoid responsibility
• Is relatively un-ambitious
• Wants security above all

Theory Y ('participative management' style)

• Physical and mental effort in work is as natural as play or rest
• The average person is not lazy and will exercise self-direction if committed to objectives
• Commitment to objectives is a function of rewards associated with their achievement
• People usually accept and often seek responsibility
• The capacity to use a high degree of imagination, ingenuity and creativity in solving organizational problems is widely, not narrowly, distributed in the population
• In industry the intellectual potential of the average person higher than what is actually utilized

Both models have their limitations because the average working person needs more than financial rewards at his job; he also needs a greater level of motivation that gives him the opportunity to fulfill himself. Theory X management systems do not give their staff this opportunity so that they behave as expected; though popular among many managers, such practices generally give poor results. Those who use theory Y motivate better performance and results, at the same time allowing people to grow and develop. Accepting Theory Y may be easy but applying it successfully, poses quite a challenge. While difficult to practice on the shop floor in the case of mass production operations, it may be ideal in management of professionals, atleast initially. Adapting to Theory Y is especially difficult in environments where Theory X had been dominant for quite a few decades. 

Though McGregor realizes that some of the theories he has put forth may not be realized in practice, he urges managers to put into operation the basic assumption that "the staff will contribute more to the organization if they are treated as responsible and valued employees."