Douglas McGregor

1. Douglas McGregor A,B,C …X,Y,Z

2. McGregor’s Profile • Bachelor’s from Wayne State University • District manager of retail gas company • Worked with transient laborers • Masters and PhD from Harvard • Psychologist at MIT • President at Antioch

3. McGregor’s Beliefs “If there is anything he was trying to overcome or destroy, it was the institutional habit of talking about the virtues of democracy while running affairs autocratically.” An Antioch College Professor

4. McGregor’s Beliefs • Employees are not machine parts to be fixed, redesigned, or eliminated • They are individual people in all of their complexity

5. Influencing McGregor’s Work • McGregor challenges the prevailing mood of Taylor, alienation, and dehumanization • Existing organizations model the church or the military • 50 years of political, social and economic change • The problem is that management is applying the wrong tools

6. McGregor’s Contributions to Management • Improved performance appraisal process • Theory X and Theory Y • How to improve organizational effectiveness

7. Improved Performance Appraisal Process

8. Problems with Conventional Performance Appraisals • Organizational objectives and requirements evolve • Individuals skills, needs and objectives change • Management’s judgments differ • Focus is on the past • Employee performance is related to how he is managed

9. McGregor’s Contribution to Performance Appraisal • Three uses of performance appraisal • Administrative – salary, promotion • Informative – feedback, suggestions for behavioral change • Motivation – coach, council

10. McGregor’s Contribution to Performance Appraisal • Drucker’s MBO • Subordinate provides a clear job statement • Subordinate provides job-related targets • Management and employee come to terms on worker’s objectives

11. McGregor’s Contribution to Performance Appraisal • Employees know their own strengths and weaknesses best • The manager knows the goals and objectives of the organization and himself

12. McGregor’s Contribution to Performance Appraisal • By using MBO, the emphasis is on: • Analysis not appraisal • The future not the past • Performance not personality

13. Critique of McGregor’s Performance Appraisal • Performance issues are ignored • Salary and promotion issues • Some workers don’t want the responsibility for setting their own goals

14. Theory X and Theory Y

15. McGregor’s Contribution to Management Theory • Theory X assumptions • The average person dislikes work and will avoid it • Most people must be coerced or controlled • People avoid responsibility and have little ambition

16. McGregor’s Contribution to Management Theory • Theory X outcomes • Work becomes a means to an end • Reinforces the rigid lines of authority • Managers that assume Theory X get Theory X Satisfied needs are not motivators

17. McGregor’s Contribution to Management Theory • Theory Y assumptions • Physical and mental work effort are natural • Committing to objectives will allow the full range of control tools to be utilized • Commitment is a function of proper rewards • People learn to seek responsibility • People have the ability to creatively solve organizational problems • Employees need the freedom to utilize their untapped potential

18. McGregor’s X and Y Theory Your belief structure (X or Y or ?) does not limit you from employing hard or soft managerial strategies

19. Critique of McGregor’s Contributions • He builds Theory X and Theory Y on Maslow’s hierarchy What are the strengths and weaknesses of this position?

20. McGregor’s Critiques • Theory X and Y are insufficient in accounting for all situations • Nathan Harter states that Theory X managers are not necessarily inhuman

21. How to Improve Organizational Effectiveness?

22. McGregor’s Contribution to Management Theory • People can achieve their own goals by pursuing the organization’s goals • The organization will suffer if this does not occur

23. McGregor’s Contribution to Management Theory • The current management persona is: • decisive, force, competitive, just • People are rational and emotional • Emotions often drive different points of view • Motivation is an emotional force

24. McGregor’s View of Organizational Maps • Current organizational structures: • Delegate some authority not responsibility • You only have one boss • Strict span of control

25. McGregor’s View of Organizational Maps • The organizational “maps” are not real • Maps have limited usefulness • Authority often does not equal responsibility • Informal organization is real

26. McGregor’s Contribution to Management Theory • Three factor’s that make up a manager’s style: • Cosmology • Identity of the manager • Organizational situation

27. McGregor’s Critique of Current Management • Existing management uses extrinsic rewards well • Intrinsic rewards are not utilized • You have to learn to see what is really broken

28. McGregor’s Observation • Workers perceptions determine how they respond to a policy or decision • Don’t apply mechanical system rewards and punishments when intrinsic rewards are called for

29. McGregor’s Suggestion for Improving Organizational Effectiveness • Independent teams become the operative work groups • Teams have high self control/self regulation • Supervision becomes support/instruction • Teams help fulfill “social man” needs • Teams remove reasons to fight the system

30. Final Critique of McGregor • Do teams really remove the reason to fight the system? • Describe the characteristics of a humane Theory X. When would it be more appropriate? • What evidence do you see of this today?