Seven Steps To Eliminating Theory X Management For Organizational Success

The No B.S. Workplace Performance Coach and trusted advisor helping individuals and organizations reach higher levels of work performance. getty Sixty years ago, social psychologist Douglas McGregor developed two different theories — Theory X and Theory Y — about how managers perceive employees. Theory X managers are authoritarian. They believe employees are […]

The No B.S. Workplace Performance Coach and trusted advisor helping individuals and organizations reach higher levels of work performance.

Sixty years ago, social psychologist Douglas McGregor developed two different theories — Theory X and Theory Y — about how managers perceive employees. Theory X managers are authoritarian. They believe employees are lazy, dislike work, need constant direction or supervision, and have to be forced or threatened before they will work. Theory Y Managers are participatory. They believe employees are self-motivated, find work to be fulfilling, seek or accept responsibility, and need little control. Most organizations adopt one of these theories and select managers who exhibit this approach.

The manager’s preconceptions about employees influence the employees’ beliefs about themselves, resulting in a self-fulfilling prophecy: Theory Y managers’ high expectations increase engagement — the Pygmalion effect —while Theory X managers’ low expectations decrease engagement — the Golem effect.

Which Theory Dominates?

In my experience, Theory X continues to dominate. Due to the positive publicity and iterations of people-centric management, most leaders are reluctant to admit their organization hasn’t made the transition. Instead of going from a command and control organization, run by Theory X managers, to a people-centric knowledge economy organization, run by Theory Y managers, many businesses stay the same.

Covid-19 has forcefully reminded us that the command and control mindset about work headed by Theory X managers is still strong. We know this thanks to evidence of a continuing lack of employee engagement. For the last few decades, organizations have recognized the need to increase employee engagement. Why? Because increasing employee engagement is the magic elixir to increasing performance, productivity, profitability, growth, retention, creativity and innovation.

Yet Gallup’s 2019 annual engagement survey found only 35% of employees were engaged — highly involved in as well as committed to their work and workplace. The other 65% were either actively disengaged — toxic employees — or not engaged — only doing enough to not get fired.

While Gallup celebrates this level of engagement, I find it disturbing that, when every organization’s future is clearly dependent on increasing employee engagement, only one-third of the workforce is engaged. But more disturbing is leaders know the organization’s managers are the primary cause of low engagement.

Yet, even though leaders are aware the manager-employee relationship is the most important driver of employee engagement, they continue to allow managers exhibiting Theory X traits to negatively impact employee engagement in the knowledge economy workplace.  

Do Half Of Managers Exhibit A Theory X Mindset?

While working from home (WFH) does not solve all employee issues, research shows employees who work from home are more engaged, perform better, take less sick time, have a higher level of job satisfaction and an overwhelming majority want to WFH at least part of the time. In addition, there are enough financial advantages for most organizations to encourage WFH as a permanent part of the work environment for most employees. 

Yet 41% of managers are skeptical (paywall) about remote workers staying motivated long-term and a further 17% feel unsure. Why? Because they struggle to trust the employees they manage to be able to perform their jobs outside the office environment! While these same managers struggling with trust may not possess all the qualities of a Theory X manager, lack of trust is a classic Theory X trait.

In a study published in the Social Behavior And Psychology journal, researchers found employees’ motivation begins with support from managers. If employees are led by Theory X managers in the office, it is safe to assume that some level of mistrust would continue to exist in a WFH situation. If a lack of trust exists, employees will be less engaged.

Will Theory X Management Survive Post-Covid-19?

Pre-Covid-19, many offices were a bad imitation of the industrial age assembly line. Many knowledge workers were in confined office space so Theory X managers could watch them work, try to control every aspect of how the work was done and micromanage based on time spent on a work task rather than quality outcomes. At the same time, many Theory X managers were telling knowledge workers to be creative, innovative and respond rapidly to marketplace changes.

But Covid-19 and WFH has made organizations’ leaders and knowledge workers both more aware of the flaws in this industrial age approach. There are more appropriate ways to engage knowledge workers that don’t include command and control mindset and its accompanying Theory X managerial style. If organizations truly want knowledge workers to produce better results, that will only come from increased engagement.

How To Move From Theory X To Theory Y Management

Since I am a performance coach, I begin my coaching engagement with an organization by recommending leadership follow these seven steps if they want to achieve the increased engagement that leads to increased performance: 

1. Terminate employees who should have been terminated yesterday: The bad hires — cultural or competency misfits — and the working dead — toxic employees — at all levels of the organization.

2. Conduct employee surveys, 360-degree evaluations and focus groups to ascertain the employees’ perspective about the organization’s managerial mindset. Is the mindset command and control, people-centric or someplace in between? These actions also look for employees’ perspective on individual team leaders and their managerial style — is it Theory X, Theory Y or someplace in between?

3. Create a communication program that actively and frequently disavows command and control as well as Theory X and explains while supporting the people-centric and Theory Y mindsets.

4. Make team leaders aware of the negative consequences of the Theory X management style and the positive consequences of the Theory Y management style.

5. Establish coaching to help team leaders identified as Theory X managers transition to Theory Y managers.

6. Assign a Theory Y manager accountability buddy to help a Theory X manager transition to Theory Y management.

7. Make 10% of the executive team and team leaders’ compensation dependent on a 10% increase in employee engagement over a twelve-month period.

These are the steps I’ve found to be effective in my coaching. However you approach increasing employee engagement, remember that post-pandemic, it will continue to be important to your organization’s ability to grow. Organizations can no longer afford to ignore the detrimental impact command and control along with Theory X management has on employee engagement and must proactively eliminate those detrimental managerial mindsets. 


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