“There is nothing more practical than a good theory” according to the social psychologist Kurt Lewin and nowhere might that be truer than in the field of management research. One of these theories is that of Douglas McGregor from MIT whose work on motivational theory in the 1960’s resulted in his two contrasting models of workforce motivation known as Theory X and Theory Y.

Theory X is related to an authoritarian style of management that assumes that employees are inherently lazy and work averse. Managers adopting this style of management adopt stricter management controls and closer supervision in order to align the employee’s behaviour to the needs of the organization. A primary motivation in such cases is the employee’s needs for money and security.

Theory Y in contrast is related to a more participative style of management where employees are actively encouraged to be involved in the decision-making processes within the organization. It assumes that employees are self-motivated and see work as being a natural and enjoyable part of life. Both Theory X and Theory Y are in agreement that a manager’s responsibility is to plan, organize and coordinate workplace activities in order to meet organizational goals and maximize efficiencies. As such, both styles of management may have their place in the workforce where the primary need is to motivate employees and maximize productivity. A further extension is that of theory Z which emerged and was popularized during the Asian economic boom of the 1980’s. Theory Z was focused on the idea of increasing employee loyalty and motivation through creating an environment with a focus on the well-being of the employee and increased employment stability and guarantees of long term employment. While these notions may have been relevant during that particular period they have fallen somewhat out of favor in todays flexible and mobile job markets.

What really matters though is context and managers must take the time to realize this if they are to be successful. Context refers to the environment in which managers and employees are interacting with their surroundings and few would argue that context has not changed considerably over the past 50 years. In a task oriented industrial era, an authoritarian style of management might have produced results, but certainly has its limitations in today’s new economy where value is much more likely to be generated from ideas than from the factory. Value in this new economy is increasingly based on the knowledge of individual employees and consequently if management is to be effective it much focus on creating value through nurturing creativity and innovation and inspiring people to perform at their best. As such, the motivation to achieve such outcomes is much more likely to be achieved through a management style more aligned with Theory Y with its focus on creating a workplace environment where the employee’s contributions to the organization are valued. In such environments management is going to be more focused on providing real leadership which inspires employees to perform at their best.

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