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Theory Y

The other view held by managers about the nature of people is opposite to that of Theory X. McGregor felt that as people continue working in the organization, their lower-level needs get satisfied over a period of time and they look forwarded to satisfying their higher-order needs of ego satisfaction and self-actualization. They want to take part in management decision-making processes, accept challenging hobs, look for lucrative an innovative job conditions and are, therefore, self-directed to contribute towards organizational goals. Their aim is not only to maximize personal goals but also organizational goals. They integrate individual goals with organizational goals. Not only do they accept responsibility, they seek it from superiors to satisfy their needs of acknowledgement, creativity and innovation.

Basic assumptions underlying Theory Y are:

(a)    Managers organize various organizational resources to achieve economic ends of the enterprise.(This assumption is similar to that of Theory X)

(b)    Workers are not lazy. They have the potential for development and readiness to work. Mangers recognize these abilities and exploit them for the benefit of individuals and organizations.

(c)    People are ambitious. Not only so they accept responsibility, have they sought it from managers.

(d)    Motivation to work does not come from outside. People are self- directed and self-motivation to work towards organizational goals.

(e)    Managers create and environment where individuals integrate and coordinate personal goals with organizational goals.

(f)    People are not resistant to change .They use imagination and creativity to solve organizational problems in the turbulent, dynamic environment.

(g)    Workers strive to satisfy their higher-order needs through self-direction, self-control and participative styles of leadership.

(h)    Rewards are associated with recognition and achievement .They is non-financial in nature.

Theory Y, thus, holds and optimistic view about human nature where people integrate their goals with corporate goals. Motivators like recognition, praise, admiration, participative styles of leadership, two way communication and challenging job opportunities motivate people to work

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