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In an established organization, there exist different types of employees depending on their personality and attitude to work. Schermerhorn (2010) affirms that, there are different types of employees through theory X Y and Z. Managers should have a deeper understanding of theories, in order for them to motivate employees and improve their productiveness.

Douglas McGregor came up with Theory X and Theory Y in the 1950s. McGregor criticized both the classical and human relation schools in their Hawthorne experiment for inadequately looking at the realities of the workplace. Theory X characterizes a negative view of the workers as individuals who dislike work, and hence, required close supervision while carrying out their duties. On the other hand, Theory Y characterizes employees who are industrious, creative, have excessive self-control and assume responsibility. The two sets of theories mainly focused on discussions of management style, employee involvement, and worker motivation (Plenert, 2001). McGregor theories have a close relation to the works of Abraham Maslow (1908-1970) in terms of employee needs for motivation and reward.

William Ouchi in 1981, came up with, Theory Z that was a combination of American and Japanese management philosophies. Theory Z was a sociological description of humanistic organizations advocated by Chris Argyris, Douglas McGregor, Elton Mayo, and Rensis Likert. Theory Z had focus on promotion procedures, slow evaluation, consensual decision making, long-term job security, and individual responsibility within a group context. Theory Z can be traced from the negative assumptions of Theory X, and explained by the competitiveness of the Japanese company that enjoyed success as compared to the United States companies. Ouchi compared the two organizations (Schermerhorn, 2010). Type A was an American administration with the tradition of individualism, while Type J was the Japanese organizations which upheld the Japanese heritage of collectivism. Ouchi went further to maintain that an improved American approach would exploit on the best characteristics of Japanese organization while retaining individualism. Adaptation of Theory Z managerial approach can lead to lower rates of absenteeism, and turnover besides greater employee job satisfaction, exceptional quality products, and improved overall financial performance of the company.

These theories function together in an organization because there are Type X and Type Y of employees who have different personalities, values, desire and motivation. McGregor agrees that it was difficult to create an entirely Theory Y organization, therefore, would be necessary to incorporate some of Theory X assumptions that were positive. According to Plenert (2001), McGregor encouraged the management style, employee involvement and motivation of workers depending on the managerial situation would determine the approach that was appropriate.

Theory X and Theory Y are essential as they form the basis of management style, employee involvement, and worker motivation.  Therefore, it is important that the contingencies of each managerial situation assessed in order to come out with the approach that is appropriate. An organization had to implement both Theory X and Theory Y as they would suit each other in tough economic times.

Theory X and Theory Y could face some criticism when applied in managerial, since Theory X management styles accomplish organizational goals through ensuring the organization of human resources. Gitman and Mcdaniel (2008) assert that Theory X insists on the directing of employee activities with the management paying active attention through persuasion, reward, punishment and control. Whereas Theory Y received more criticism since, the managers engaged in a manipulative seductive form, focusing on measures of productivity rather than measures of employee well-being. Subsequently, Theory Y focuses on condensing schemes in order to increase the employee’s productivity. In some cases, employees do not gain an economic benefit as they continue working harder for the same pay.

In general, companies could decide on either the principles of Theory X, Theory Y or Theory Z while making managerial decisions. This will ensure that proper decisions with the main interest in the organization and employees in order to enhance productivity. It is consequently, necessary for organizations to use persuasion, reward, punishment and control when dealing with employees.

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