Roshni had a fun weekend planned to unwind after a stressful workweek. Unexpectedly, she was told by her boss to prepare an urgent presentation over the weekend. 

Roshni got down to the task immediately and managed to put together a fantastic presentation that drew praise from the client. Her boss complimented her in front of all the other employees and appreciated her dedication. He also asked the others to take a leaf out of Roshni’s book.  

How do you think Roshni and her colleagues would have reacted to this? 

Have you ever thought about what drives your employees or subordinates to report to work every day?

Many managers and business owners assume that employees remain satisfied and motivated when their work is praised.


What Is Theory X And Theory Y?

The assumptions of managers and leaders about employee motivation is a big influence on the way a business is run.  In 1960, management professor Douglas McGregor came up with a brilliant theory on two main aspects of human behavior: negative and positive.

McGregor called his concept Theory X and Theory Y. It is also called Theory X and Y, McGregor Theory, and McGregor Theory X and Y.  

Theory X And Theory Y Explained

According to McGregor Theory X and Y, the assumptions of managers play a key role in determining employee behavior and performance, Theory X is focused on negative assumptions whereas Theory Y deals with positive assumptions. 

Let’s first take a look at the assumptions of Theory X.

Theory X Assumptions

  • Employees are habitually disinterested in working and are always looking for opportunities to shirk work.

  • Employees’ lack of focus on work is a perennial issue. Hence, there is a continuous need to request, force, or even threaten the employee with adverse consequences to achieve the company’s goals. We need to minutely monitor the employees and constantly keep telling them to do the tasks assigned. 

  • Employees are only focused on saving their jobs. Most of them don’t have any ambitions or growth aspirations.

  • Employees are always unwilling to take responsibility.

  • It is a common habit for employees to resist change.

  • Employees can’t perform well in the absence of formal 

Let's now turn to the assumptions of Theory Y.

Theory Y assumptions 

  • Employees are in the habit of putting in concerted physical and mental effort to perform their duties.

  • Employees don’t always need threats, force, or minute monitoring by their superiors. Once a task is assigned to them, they are driven enough to complete it and contribute towards the company’s goals.

  • Financially rewarding and comfortable jobs cause employees to be loyal and committed to the company.

  • Any average employee is capable of identifying their roles and responsibilities, and employees can even take the initiative of requesting more responsibility.

  • Employees have certain skills and abilities. These should be optimally exploited. Managers can use the skills, inventiveness, and resourcefulness of their teams to achieve organizational goals.

The above assumptions make it amply clear that Theory X presents a negative and cynical opinion about employees’ approach to work. On the other hand, Theory Y is the positive aspect of the Theory X and Theory Y concept. McGregor advocated harmony between teams, strong relationships among team members, motivating work profiles, and involving all team members in the decision-making process.

Impact Of Theory X And Theory Y

Theory X and Theory Y can create a significant impact on the functioning of the organizations. Theory X is considered a conventional management style. That is not to say it is no longer influential. A number of traditional organizations still use Theory X assumptions. They believe in controlling their employees and putting in place strict supervision mechanisms. However, this doesn’t augur well for employee satisfaction, loyalty, or innovation.

Theory X and Y assumptions play a critical role in creating a company culture. A lot of business organizations are now focusing on the McGregor Theory X and Y. Let’s take a look at the Y-axis assumptions of Theory X and Y.

According to the Y-axis of Theory X and Y, business managers must foster a work environment where employees are encouraged to become independent and take initiative. The McGregor Theory further suggests that there should be a delegation of authority to the employees. Teamwork, as well as inclusive decision-making, should be made part of company culture. Theory X and Y determine how a company encourages employees to make meaningful contributions. It would be appropriate to say that Theory X and Y is an ideal tool to map employees’ needs and ambitions with the company’s objectives. 


Theory X and Theory Y is a useful framework for modern business organizations. According to McGregor Theory X and Y, every manager makes either negative or positive assumptions about employee behavior and capability. McGregor Theory can help you understand the managerial style in a company and the impact it is having on motivation and productivity levels. 

Harappa Education recommends learning about the McGregor Theory as a part of one’s preparation for the corporate world. The Managing Teamwork course focuses on social techniques to become an effective manager and assist in the achievement of organizational goals. The various concepts covered in the course include the Social Styles Model which helps learners develop and leverage management skills to achieve professional success.  

Explore topics such as Leaders vs ManagersHow to Build Trust in a TeamWork Culture & Rapport Building from our Harappa Diaries section and build trust-rich relationships.

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