According to McGregor’s theory, management decisions work on assumptions made about employee motivations. Douglas McGregor was a social psychologist, professor and noted management theorist in the area of motivation. By only fulfilling employees’ base needs for money and physical security, managers fail to recognize higher motivations such as creativity and self fulfillment. Knowledge of deeper motivations is key in making the most of the management theory of Douglas McGregor.

To understand McGregor's theory of management, it might help to compare his Theory X and Theory Y. Theory X involves the all too common assumption that the average employee avoids work whenever possible, does not wish to take responsibility for decisions and lacks intelligence and ambition. This tends to be a self-fulfilling prophecy. Theory Y differs in the basic elements, which include:

1. Using McGregor's theory to allow employees more opportunities by broadening their job descriptions and offering variety.

2. Tapping creativity by involving employees in decision making processes.

3. Delegating tasks and responsibilities instead of leaving everything to high-level management.

4. Letting employees set their own goals and including them in the evaluation of the progress toward accomplishing them.

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Understand the Douglas McGregor XY theory of management

There are many online resources to help you better understand the details of McGregor's XY theory. Keep in mind that Theory Y is not necessarily the opposite of Theory X, but it's a different basis for understanding employee motivations.

I recommend: 12manage has a diagram dealing with the assumptions based on X and Y theories. NetMBA.com offers detailed information on McGregor's XY theory. Envision Software discusses soft and hard approaches to management and the issues involved in X and Y management theory.

Hire a consultant to help you implement the McGregor management theory

Consulting services can help you find new ways to make your business more successful. Often a consultant can make minor changes to systems already in place, which saves you time and money and makes the transition easier on all parties.

I recommend: Scanlon Consulting Services focuses on leadership training and business planning based on McGregor's theory. Accel-Team offers services as well as information on employee motivation.

Learn more about Douglas McGregor

Read more about Douglas McGregor's life and work. His major published work, 'The Human Side of Enterprise,' remains popular and provides in-depth information into his theories.

I recommend: The Economist has a Douglas McGregor biography that talks about his studies and contributions to management theory. Managers-Net offers a more detailed biography including information on the college named after him.

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• •  A step beyond Douglas McGregor's Theory X and Theory Y is Theory Z, combining American and Japanese management styles. The focus is to employ workers with one company for life, thus creating motivation through loyalty. Collective decision making, individual responsibility and a concern for employees and their families are key features of Theory Z.

Douglas McGregor's theory of management, often referred to as McGregor's XY theory, remains a cutting-edge management model though more than 50 years old. The Douglas McGregor biography describes one of the most influential management theorists as a man whose revolutionary insights into the nature of leadership and management changed the relationship between managers and employees, paving the way for best practices implemented by some of today's most successful companies.

Rooted in the early industrial era, Douglas McGregor's Theory X and Theory Y contrasted two visions of the worker. Theory X, the accepted model at the time, assumed that workers were drones, without ambition or initiative who had to be punished and bullied by bosses to achieve results. Drawing on newly emerging psychological principles, Douglas McGregor's Theory Y offered a different model. Some key Theory Y principles are the following:

1. Work is as natural as play or rest.

2. Workers who are engaged and fulfilled actually enjoy their work.

3. Under the right conditions workers actively seek responsibility, take initiative and make creative decisions.

4. Self-fulfillment is the real reward workers seek.

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Assess your company's need for McGregor management theory

McGregor's theory of management can revolutionize the relationship between leadership and employees in your company. Numerous online tests are available which can help you see exactly where your organization stacks up against McGregor management theory.

I recommend: ACCEL Team provides several Human Resource Management (HRM) systems diagnostic checklists to help you figure out whether your company's approach to "people management" needs a McGregor-style overhaul. To measure your employees' initiative, Innovation Network offers an "IQ" (Innovation Quotient) test you may take online to help you determine the current innovation level of your organization. This valuable assessment can help you decide precisely where to begin implementing McGregor's management theory. Another "Innovation Quotient Inventory" (IQI test), available at Winston J. Brill & Associates can give you additional insight into your company's need for McGregor theory.

Get training in human resource management to understand McGregor's theory

Many websites provide valuable information about McGregor theory. You'll find various training courses and instructional materials that can help you develop the background knowledge and practical expertise to put Douglas McGregor motivation theory to work for your company.

I recommend: Project Management Institute provides human resource management (HRM) training, which covers McGregor's theory; and International Institute of Management offers various theory-based management training courses both online and on location.

Connect with a consultant who can help you implement Douglas McGregor theory

Consultants with knowledge and experience in the Douglas McGregor motivational theory can guide you in maximizing the benefit of his principles in your own company's unique environment.

I recommend: Scanlon Consulting Services integrates McGregor management theory into its approach. (In fact, the Y portion of the theory was originally based on McGregor's study of Scanlon company methods.) Pattern Research, Inc. (offering phone or e-mail consultation and referrals free-of-charge) and the Center for Innovative Leadership (providing consulting and coaching services) use methods rooted in McGregor's theories.

Put McGregor's theory of management to work for your company

Leadership and management training based on Douglas McGregor X Y theory can help you engage your employees' creativity and initiative in support of shared goals.

I recommend: Businessballs.com offers a multiple intelligences test, which can help you make the most of your employees' natural abilities. YouTube features a video that lays out McGregor theory for your managers or team leaders. The Center for Innovative Leadership offers customized workshops and training based on McGregor's theories.

Tips & Tactics

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• •  Most management theorists today agree that Douglas McGregor's Theory X and Theory Y somewhat exaggerate the contrasts in management's view of workers, but the real value of McGregor's theories lies in the way they reveal just how much leadership depends on perception and expectation.

Douglas McGregor is considered one of the most popular and influential management writers. His work continues to have a profound effect on the way managers motivate and train their employees. He trained in social psychology and was influenced by the theories of Abraham Maslow and the work he did at his grandfather's institute for transient laborers. McGregor served as a management professor at MIT Sloan School of Management. He was later president of Antioch College.

In 1960, he published "The Human Side of Enterprise," which serves as a guideline for creating a motivational work environment. Implementing his theory requires some training in his work, although a formal education is not necessary. To get the management theory of Douglas McGregor education and training:

1. Start with an overview of McGregor's theory and biography;

2. Read his work and other books about the Douglas McGregor motivation theory;

3. Learn how to apply and implement the theory at your organization.

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Check out a Douglas McGregor biography and overview

Before learning more about McGregor's theories or implementing them, get an overview of his work. McGregor's work is based on two theories or models, called Theory X and Theory Y. Each theory addresses the reasons for employees' work behavior and motivation.

I recommend: Accel-Team, a training and team building organization, provides an overview of McGregor's XY theory. NetMBA offers an overview as well as discussion of the theories. Read a detailed biography of Douglas McGregor at Managers-Net.

Read books on McGregor's theory of management

'The Human Side of Industry' was published in 1960. It is still considered one of the most influential tools for modern managers. Subsequent editions and other books that follow up on his work provide examples of companies that have incorporated McGregor's theories and show how his methods relate to modern work and management environments.

I recommend: McGraw-Hill offers McGregor's work in a 2005 edition annotated by research scientist Joel Cutcher-Gershenfeld. In "Douglas McGregor, Revisited: Managing the Human Side of the Enterprise," available from Leadership Now, McGregor's work is integrated into the modern environment of technology and global exchange.

Learn how McGregor's management theory fits into your business

Hands-on courses and modules will help you to apply McGregor's work to your organization. Most courses and other tools can be completed or purchased online.

I recommend: Teleometrics offers training modules, video support and group exercises to help discover and implement McGregor's theories. Businessballs provides tests and diagrams to work with the theories in your organization. Find management courses that incorporate McGregor's theories at the International Institute of Management.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  At his death, McGregor was working on 'Theory Z,' an addition to the McGregor management theories. While it was never published, information about it can be found in articles and books.

Douglas McGregor's management theories focus on what motivates an employee. Rather than give his theories descriptive labels, McGregor called them Theory X and Theory Y. He approaches both of his theories from the position that leadership and managers within a company have set "assumptions" regarding their employees' motivations and behaviors.

This article provides information on those theories and their elements in order to point you in the right direction toward the management structure of your business.

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Theory X

McGregor's Theory X tends to take a negative approach to the expectations of your employees. It assumes that people inherently don't enjoy work, don't have a creative nature and are self-centered in their actions. Theory X is the belief that the only motivation for employees to succeed at their jobs is monetary gain.

I recommend: Learn more about the characteristics of employees in Theory X from Envision Software.

Theory Y

Theory Y, on the other hand, tends to have a more 'give them the benefit of the doubt' approach to employees' attitudes about work. McGregor believed an employee's dedication to the business will direct that employee to be successful in defference to rewards and punishment.

I recommend: Accel-Team provides more information on McGregor's Theory Y assumptions.

Maslow's Hierarchy of Needs

McGregor based his work in management theory on Maslow's Hierarchy of Needs. McGregor separated Maslow's Hierarchy into the lower order needs (under Theory X) and the higher order needs (under Theory Y), and believed that managers can use either set of needs, or a combination of the two, in order to motivate employees.

I recommend: Visit the Business Open Learning Archive for more information on how McGregor used Maslow's Hierarchy.

Authoritarian

McGregor finds the assumptions of leadership under Theory X to be an authoritarian/hard management styles. Some believe the best way to use this form of management is when the business or the employees are at risk due to another employee's demeanor and lack of motivation.

I recommend: 12manage explains how Theory X is authoritarian. Visit TML Business Services for more information on how and when it is appropriate to use authoritarian management.

Participative

On the other hand, the assumptions management makes about employees under McGregor's Theory Y lend more to a participative management style. Managers who use participative management are more open to involving employees in discussion about a situation, rather than simply commanding their approach.

I recommend: Value Based Management shows how Theory Y falls under participative management. You can find more information on this management style on eNotes.

Theory Z

Most research and articles on McGregor's management theory will likely mention Theory Z, developed by William Ouchi in 1981 as a variant to McGregor's theories. Ouchi's theory is a combination of Japanese and American management styles with the purpose of creating lifelong careers.

I recommend: Peter Venn's Free Training Resources explains more about how Theories X, Y and Z work together.