“My father has been running a local garment factory since 1975 with 500 employees who were motivated by just purely monetary rewards. They were well paid at that time, including increments , bonus pays and such rewards for productive work . Garment products , processes were standardized and made according to orders from my father, they only did what they were told to do.
Years went by, I took over my father’s business . I realized that my pay increments were not pushing my employees any further. The new generation of employees were no longer motivated by this management style. Generation X was over.”
The Human side of enterprise
The theoretical management science approach by Mc Gregor refers to two styles of managing employees, Theory X & theory Y in his book, The Human Side of Enterprise.
Theory X management style is a traditional authoritative approach in the organisation which centralizes decision making. This behavior was common during Generation X (1965-1980) where they preferred to do their own work as given to them .Top management dictates goals where communications flow top down in a one purpose strategy.
The Millennials (1981-2000s) or Generation Y featuring most of Mcgregor's Theory Y on the other hand are collaborative, target driven, and an innovative workforce who prefers frequent feedback from not only superiors but peers.
Theory X Theory Y in the real word
In a practical scenario no worker is purely a Theory Y or X worker as most workers will be characterized by a greater proportion of Y or X. Theory X approach is anyway modus operandi as most organisations are naturally centralized structures.
Theory X management style is dominating in most industries as Generation X workers still exist, especially in the senior management. As of recent Millennials are on the rise, leading companies using Theory Y approach for example Starbucks, SAS Institute, Whole Foods Market , Wegmans encourage and support their workers. This idea creating, and teamwork loving generation is attracted to the rapidly changing technology and dynamic industries which explains the recent increase in them.
New management styles promotes collaborative goal setting and bottom up communication. It is not a surprise that leadership following Theory Y approach who empower their subordinates seek more responsibility and ownership to more committed goal achievements.
Effective goal management in an organisation structure is where employee empowerment allows them to set their own goals which needs approval by the management to track their progress towards it.