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Theories X and Y

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Strongly influenced by Maslow and his needs hierarchy, Douglas McGregor applied this hierarchy to the organizational structure. In the l960s, he came up with two opposing theories, which he called Theory X and Theory Y.

Theory X management stresses that human beings are essentially lazy and do not want to work. They need to receive direction and are motivated through the fear of punishment. In addition, Theory X proposes that the average employee tries to avoid responsibility and wants job security above all else.

Theory Y management states that people will use both self-control and self-direction. This theory suggests that the average employee learns not only to accept but also to seek responsibility.

Theory X organizations have a hierarchical structure and control employee behavior. Employees are treated as if they —

• are lazy and anxious to evade work whenever possible,

• need control and direction in order to perform well,

• have relatively little ambition, and

• avoid responsibility whenever possible.

Theory Y organizations function in an almost completely opposite manner. These organizations are characterized by integration. According to McGregor, integration involves “the creation of conditions such that the members of the organization can achieve their goals best by directing their efforts toward the success of the enterprise.” Employees are treated as if they —

• enjoy physical and mental effort,

• direct themselves to meet objectives,

• relate achievement with certain rewards, and

• use a high degree of imagination, ingenuity, and creativity.

Many of the dotcom companies that became prevalent in the 1990s, though they began to fail financially, were successful in providing employment atmospheres that are strongly indicative of a Theory Y environment.

A seasoned businesswoman with more than 25 years of experience in a traditional business environment had this to say about her shift to a dotcom: “I can’t believe how happy I have been in this particular position, and what a great creative environment it is. I actually enjoy getting up and coming to work every day.”

Another former corporate employee says, “One of the exciting things about working in a dotcom are the intelligent, enthusiastic, energetic people that it attracts. The whole space buzzes with energy. Unfortunately, that hasn’t always been the case in my personal experiences with some of the larger corporations I’ve been with.”

Interestingly, what many dotcom employees point to as motivating in their new positions is their sense of contribution and the feeling that they are truly making a difference. Compare this to a comment from an employee for a publicly held corporation: “I had a manager who was very hands-off — so much so that if I went on vacation I’m sure he did not know I was gone. He never asked me how I was doing or if I needed any support from them unless it was review time. I finally transferred out of the department. I don’t like a hovering manager, but I need to be recognized more than once a year.”

Motivating Today's Employees

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