Mr. McGregor theorizes that management views an employee's motivation toward work in two distinct ways - Theory X and Theory Y. Theory X managers believe the following: (1) The average worker naturally does not like work and will avoid it whenever possible. (2) Managers must always control, motivate, and direct their employees to perform well.
(3) Most workers prefer being directed, avoid responsibility, and seek job security. On the other hand, Theory Y managers assume the following: (1) Employees enjoy working. (2) Managers do not need to control and punish workers to accomplish organizational goals. (3) Workers will be committed to an organization if their work is satisfying. (4) Managers should '... arrange organizational conditions and methods of operation so that people can achieve their own goals best by directing their own efforts toward organizational objectives'; (Kolb, et al.
, 1995, p. 62). The theory McGregor believes will best stimulate employee motivation toward accomplishing organizational goals is Theory Y. The goal of Theory Y is to provide employees ways to attain the higher levels of Maslow's Hierarchy of Needs (esteem (ego) and self-actualization (-fulfillment) ) so that the establishment may prosper. McGregor thinks that most organizations today already fulfill the lower needs of employees (physiological, safety, and love (social) ) and therefore should concentrate on the higher needs of individuals.
Therefore, McGregor says that management should try to develop a relationship based on two-way trust between management and employees. This should enable self-direction, increased productivity, and possibly the creation of better methods to complete tasks more efficiently. Furthermore, McGregor points out that management should not expect to see significant changes when first initiating his theory. Change is slow to come, but in the long-run companies will see improvements in employee motivation towards their work.