In his 1960 management book, The Human Side of Enterprise, Douglas McGregor made his mark on the history

of organizational management and motivational psychology when he proposed the two theories by which managers perceive employee motivation. He referred to these opposing motivational methods as Theory X and Theory Y management. Each assumes that the manager's role is to organize resources, including people, to best benefit the company. However, beyond this commonality, they're quite dissimilar.

Theory X Management
According to McGregor, Theory X leadership assumes the following: Work is inherently distasteful to most people, and they will attempt to avoid work whenever possible. Most people are not ambitious, have little desire for responsibility, and prefer to be directed. Most people have little aptitude for creativity in solving organizational problems. Motivation occurs only at the physiological and security levels of Maslow's Needs Hierarchy. Most people are self-centered. As a result, they must be closely controlled and often coerced to achieve organizational objectives Most people resist change. Most people are gullible and unintelligent.

Essentially, theory x assumes that the primary source of most employee motivation is monetary, with security as a strong second.

The Hard Approach and Soft Approach

Under Theory X, management approaches to motivation range from a hard approach to a soft approach. The hard approach to motivation relies on coercion, implicit threats, micromanagement, and tight controls -- essentially an environment of command and control. The soft approach, however, is to be permissive and seek harmony in the hopes that, in return, employees will cooperate when asked. However, neither of these extremes is optimal. The hard approach results in hostility, purposely low-output, and extreme union demands. The soft approach results in increasing desire for greater reward in exchange for diminishing work output. It would appear that the optimal approach to human resource management would be lie somewhere between these extremes. However, McGregor asserts that neither approach is appropriate since the foundations of theory x are incorrect.

The Problem with X Theory

Drawing on Maslow's Hierarchy of Needs, McGregor argues that a need, once satisfied, no longer motivates. The company relies on monetary rewards and benefits to satisfy employees' lower level needs. Once those needs have been satisfied, the motivation is gone. This management style, in fact, hinders the satisfaction of higher-level needs. Consequently, the only way that employees can attempt to satisfy higher level needs at work is to seek more compensation, so it is quite predictable that they will focus on monetary rewards. While money may not be the most effective way to self-fulfillment, it may be the only way available. People will use work to satisfy their lower needs, and seek to satisfy their higher needs during their leisure time. Unfortunately, employees can be most productive when their work goals align with their higher level needs. McGregor makes the point that a command and control environment is not effective because it relies on lower needs for motivation, but in modern society those needs are mostly satisfied and thus no longer motivate. In this situation, one would expect employees to dislike their work, avoid responsibility, have no interest in organizational goals, resist change, etc., thus creating a self-fulfilling prophecy. To McGregor, motivation seemed more likely with the Theory Y model.

Theory Y
The higher-level needs of esteem and self-actualization are continuing needs in that they are never completely satisfied. As such, it is these higher-level needs through which employees can best be motivated. In strong contrast to Theory X, Theory Y leadership makes the following general assumptions: Work can be as natural as play if the conditions are favorable. People will be self-directed and creative to meet their work and organizational objectives if they are committed to them. People will be committed to their quality and productivity objectives if rewards are in place that address higher needs such as self-fulfillment. The capacity for creativity spreads throughout organizations. Most people can handle responsibility because creativity and ingenuity are common in the population. Under these conditions, people will seek responsibility.

Under these assumptions, there is an opportunity to align personal goals with organizational goals by using the employee's own need for fulfillment as the motivator. McGregor stressed that Theory Y management does not imply a soft approach. McGregor recognized that some people may not have reached the level of maturity assumed by Theory Y and therefore may need tighter controls that can be relaxed as the employee develops.

XY Theory Management Application - Business Implications for Workforce Motivation

If Theory Y holds true, an organization can apply these principles of scientific management to improve employee motivation: Decentralization and Delegation - If firms decentralize control and reduce the number of levels of management, managers will have more subordinates and consequently will be forced to delegate some responsibility and decision making to them. Job Enlargement - Broadening the scope of an employee's job adds variety and opportunities to satisfy ego needs. Participative Management - Consulting employees in the decision making process taps their creative capacity and provides them with some control over their work environment. Performance Appraisals - Having the employee set objectives and participate in the process of evaluating how well they were met.

If properly implemented, such an environment would result in a high level of workforce motivation as employees work to satisfy their higher level personal needs through their jobs.

Maslow's Theory Z
First, There was Theory X and Theory Y
Maslow's Theory Z , presented in Maslow on Management, presupposes that people, once having reached a level of economic security, strive for a life steeped in values, a work life where the person would be able to create and produce. Management / Motivation Theories X and Y were developed by Douglas Mcgregor. Theory Z is not a McGregor idea and as such is not Mcgregor's extension of his XY theory. Theory Z places more reliance on the attitude and responsibilities of the workers, whereas Mcgregor's XY theory is mainly focused on

management and motivation from the manager's and organisation's perspective. While Theory Z offers excellent ideas, it's quite a pity that most organizations could benefit even through the application and understanding of Theory Y. The March 1998 cover story in FORTUNE magazine is but one example of Maslow's Theory Z in action. Entitled Yo, Corporate America - I'm the New Organization Man , the article depicted the wants and needs of the new "gold collar worker." Expecting to be well paid, this generation also believes they are entitled to a job "that fun, a job that's cool, a job that lets them discover who they really are." Work is not about paying the rent anymore - it's about self-fulfillment. "Work is not work. It's a hobby you happen to get paid for."

Theory Z - William Ouchi

Maslow's Theory Z should not be confused with the book by William Ouchi bearing the same name. Another, competing, Theory Z, was presented by William Ouchi, in his 1981 book 'Theory Z: How American management can Meet the Japanese Challenge'. William Ouchi is professor of management at UCLA, Los Angeles, and a board member of several large US organisations. Ouchi's Theory Z is often referred to as the 'Japanese' management style. Ouchi's Theory Z advocates a combination of the best of theory Y and modern Japanese management, placing a large amount of freedom and trust with workers, and assumes that workers have a strong loyalty and interest in team-working and the organization. The commonalities between Ouchi's Theory Z, and Maslow's is not surprising, since Maslow's treatises on management and motivation shaped the worlds of Deming and Drucker, who in turn rebuilt Japan after WWII, and whose subsequent success in managing their people and the resulting rise to global power is the subject of Ouchi's book. Theory Z is a management philosophy that stresses employee participation in all aspects of company decision making. It was first described by William Ouchi in his book Theory Z- How Man American Business Can Meet the Japanese Challenge. Theory Z incorporates many elements associated with the Japanese approach to management, such as trust and intimacy, but Japanese ideas have been adapted for use in the United States.

In Theory Z organizations, managers and workers share responsibilities; the management style is participative; and employment is long term and often lifelong. Theory Z results in employees feeling organizational ownership. Recent research has found that such feelings or ownership may produce positive attitudinal and behavioral effects or employees. (20) In a Theory Y organization, mangers focus on assumptions about the nature of the worker. Theory Z has been adapted and modified for use in a number of U.S. companies. One adaptation involves workers in decisions through quality circles. Quality circles (also called quality-assurance teams) are small, usually having 5 to 8 members who discuss ways to reduce waste, eliminate problems, and improve quality, communication, and work satisfaction. Such quality teams are a common technique for harnessing the knowledge and creativity of hourly employees to solve problems in companies.

Even more involved than quality circles are programs that operate under names such as participating management, employee involvement, or self-directed work teams. Regardless of the term used to describe such programs, they strive to give employees more control over their jobs while making them more responsible for the outcome of their efforts.

Expectancy theory
From Wikipedia, the free encyclopedia Expectancy Theory proposes that a person will decide to behave or act in a certain way because they are motivated to select a specific behavior over other behaviors due to what they expect the result of that selected behavior will be. In essence, the motivation of the behavior selection is determined by the desirability of the outcome. However, at the core of the theory is the cognitive process of how an individual processes the different motivational elements. This is done before making the ultimate choice. The outcome is not the sole determining factor in making the decision of how to behave.

Expectancy theory is about the mental processes regarding choice, or choosing. It explains the processes that an individual undergoes to make choices. In the study of organizational behavior, expectancy theory is a motivation theory first proposed by Victor Vroom of the Yale School of Management. "This theory emphasizes the needs for organizations to relate rewards directly to performance and to ensure that the rewards provided are those rewards deserved and wanted by the recipients." Victor H. Vroom (1964) defines motivation as a process governing choices among alternative forms of voluntary activities, a process controlled by the individual. The individual makes choices based on estimates of how well the expected results of a given behavior are going to match up with or eventually lead to the desired results. Motivation is a product of the individuals expectancy that a certain effort will lead to the intended performance, the instrumentality of this performance to achieving a certain result, and the desirability of this result for the individual, known as valence. (S.E. Condrey, 2005, p. 482) Theory Developer In 1964, Victor H. Vroom developed the Expectancy theory through his study of the motivations behind decision making. He wanted to better understand why people chose to behave in a certain way. Vrooms theory is relevant to the study of management and has become even more important as managers try to gain a better understanding of what motivates their employees to behave in certain ways. Vroom has written nine books, however his book Work and Motivation (1964) is regarded as a breakthrough in the study of leadership and decision making within organizations. Currently, Vroom is a John G. Searle Professor of Organization and Management at the Yale University School of Management. Key Elements The Expectancy Theory of Motivation explains the behavioral process of why individuals choose one behavioral option over another. It also explains how they make decisions to achieve the end they value. Vroom introduces three variables within the expectancy theory which are valence (V), expectancy (E) and instrumentality (I). The three elements are important behind choosing one element over another because they are clearly defined: effort-performance expectancy (E>P expectancy), performance-outcome expectancy (P>O expectancy).[4]

Three components of Expectancy theory: Expectancy, Instrumentality, and Valence 1. 2. Expectancy: Instrumentality: Effort Performance Performance Outcome (EP) (PO)

3. Valence- V(R) Expectancy- Probability (EP) Expectancy is the belief that one's effort (E) will result in attainment of desired performance (P) goals. Usually based on an individual's past experience, self confidence (self efficacy), and the perceived difficulty of the performance standard or goal. Factors associated with the individual's Expectancy perception are self efficacy, goal difficulty, and control. Self efficacy is the persons belief about their ability to successfully perform a particular behavior. Goal difficulty happens when goals are set too high or performance expectations that are made too difficult are most likely to lead to low expectancy perceptions. Control is one's perceived control over performance. In order for expectancy to be high, individuals must believe that they have some degree of control over the expected outcome. Instrumentality- Probability (PR) Instrumentality is the belief that a person will receive a reward if the performance expectation is met. This reward may come in the form of a pay increase, promotion, recognition or sense of accomplishment. Instrumentality is low when the reward is given for all performances given. Factors associated with the individual's instrumentality for outcomes are trust, control and policies. If individuals trust their superiors, they are more likely to believe their leaders promises. When there is a lack of trust on leadership, people often attempt to control the reward system. When individuals believe they have some kind of control over how, when, and why rewards are distributed, Instrumentality tends to increase. Formalized written policies impact the individuals' instrumentality perceptions. Instrumentality is increased when formalized policies associates rewards to performance. Valence- V(R) Valence: the value the individual places on the rewards based on their needs, goals, values and Sources of Motivation. Factors associated with the individual

Equity Theory
According to the equity theory, how much people are willing to contribute to an organization depends on their assessment of the fairness, or equity, of the rewards they will receive in exchange. In a fair situation, a person receives rewards proportional to the contribution he or she makes to the organization. However, in practice, equity is subjective notion. Each worker regularly develops a personal input-output ratio by taking stock of his or her contribution (inputs) to the organization in time, effort, skills, and experience and assessing rewards (outputs) offered by the organization in pay, benefits, recognition, and promotions. The worker compares his or her ratio to the input-output ratio of some other person- a "comparison other," who may be a co-worker, a friend working in another organization, or an "average" of several people working in the organization. If the two ratios are close, the individual will feel that he or she is being treated equitably.

Consider a woman who has a high-school education and earns $20,000 a year. When she compares her input-output ratio to that of a co-worker who has a college degree and makes $30,000, she will probably feel that she is being paid fairly. However, is she perceives that her personal input-output ratio is lower than that of the college graduate, she will probably feel that she is being treated unfairly and will be motivated to seek change. Further, if she learns that the co-worker who earns $30,000 has only a high-school diploma, she may believe she is being cheated by the organization. To achieve equity, the woman could try to increase her outputs by asking for a raise or promotion. She could also try to have the inputs of the "comparison other" increased or the outputs of the "comparison other" decreased. Failing to achieve equity, the woman may decide to leave the organization. Because almost all the issues involved in equity theory are subjective, they can be problematic. Managers should try to avoid equity problems by ensuring that rewards are distributed on the basis of performance and that all employees clearly understand the basis for their pay and benefits.

Reinforcement Theory
Reinforcement theory is the process of shaping behavior by controlling the consequences of the behavior. In reinforcement theory a combination of rewards and/or punishments is used to reinforce desired behavior or extinguish unwanted behavior. Any behavior that elicits a consequence is called operant behavior, because the individual operates on his or her environment. Reinforcement theory concentrates on the relationship between the operant behavior and the associated consequences, and is sometimes referred to as operant conditioning. BACKGROUND AND DEVELOPMENT OF REINFORCEMENT THEORY Behavioral theories of learning and motivation focus on the effect that the consequences of past behavior have on future behavior. This is in contrast to classical conditioning, which focuses on responses that are triggered by stimuli in an almost automatic fashion. Reinforcement theory suggests that individuals can choose from several responses to a given stimulus, and that individuals will generally select the response that has been associated with positive outcomes in the past. E.L. Thorndike articulated this idea in 1911, in what has come to be known as the law of effect. The law of effect basically states that, all other things being equal, responses to stimuli that are followed by satisfaction will be strengthened, but responses that are followed by discomfort will be weakened. B.F. Skinner was a key contributor to the development of modern ideas about reinforcement theory. Skinner argued that the internal needs and drives of individuals can be ignored because people learn to exhibit certain behaviors based on what happens to them as a result of their behavior. This school of thought has been termed the behaviorist, or radical behaviorist, school. REINFORCEMENT, PUNISHMENT, AND EXTINCTION The most important principle of reinforcement theory is, of course, reinforcement. Generally speaking, there are two types of reinforcement: positive and negative. Positive reinforcement results when the occurrence of a valued behavioral consequence has the effect of strengthening the probability of the behavior being repeated. The specific

behavioral consequence is called a reinforcer. An example of positive reinforcement might be a salesperson that exerts extra effort to meet a sales quota (behavior) and is then rewarded with a bonus (positive reinforcer). The administration of the positive reinforcer should make it more likely that the salesperson will continue to exert the necessary effort in the future. Negative reinforcement results when an undesirable behavioral consequence is withheld, with the effect of strengthening the probability of the behavior being repeated. Negative reinforcement is often confused with punishment, but they are not the same. Punishment attempts to decrease the probability of specific behaviors; negative reinforcement attempts to increase desired behavior. Thus, both positive and negative reinforcement have the effect of increasing the probability that a particular behavior will be learned and repeated. An example of negative reinforcement might be a salesperson that exerts effort to increase sales in his or her sales territory (behavior), which is followed by a decision not to reassign the salesperson to an undesirable sales route (negative reinforcer). The administration of the negative reinforcer should make it more likely that the salesperson will continue to exert the necessary effort in the future. As mentioned above, punishment attempts to decrease the probability of specific behaviors being exhibited. Punishment is the administration of an undesirable behavioral consequence in order to reduce the occurrence of the unwanted behavior. Punishment is one of the more commonly used reinforcement-theory strategies, but many learning experts suggest that it should be used only if positive and negative reinforcement cannot be used or have previously failed, because of the potentially negative side effects of punishment. An example of punishment might be demoting an employee who does not meet performance goals or suspending an employee without pay for violating work rules. Extinction is similar to punishment in that its purpose is to reduce unwanted behavior. The process of extinction begins when a valued behavioral consequence is withheld in order to decrease the probability that a learned behavior will continue. Over time, this is likely to result in the ceasing of that behavior. Extinction may alternately serve to reduce a wanted behavior, such as when a positive reinforcer is no longer offered when a desirable behavior occurs. For example, if an employee is continually praised for the promptness in which he completes his work for several months, but receives no praise in subsequent months for such behavior, his desirable behaviors may diminish. Thus, to avoid unwanted extinction, managers may have to continue to offer positive behavioral consequences.

SCHEDULES OF REINFORCEMENT The timing of the behavioral consequences that follow a given behavior is called the reinforcement schedule. Basically, there are two broad types of reinforcement schedules: continuous and intermittent. If a behavior is reinforced each time it occurs, it is called continuous reinforcement. Research suggests that continuous reinforcement is the fastest way to establish new behaviors or to eliminate undesired behaviors. However, this type of reinforcement is generally not practical in an organizational setting. Therefore, intermittent schedules are usually employed. Intermittent reinforcement means that each instance of a desired behavior is not reinforced. There are at least four types of intermittent reinforcement schedules: fixed interval, fixed ratio, variable interval, and variable ratio. Fixed interval schedules of reinforcement occur when desired behaviors are reinforced after set periods of time. The simplest example of a fixed interval schedule is a weekly paycheck. A fixed interval schedule of reinforcement does not appear to be a particularly strong way to elicit desired behavior, and behavior learned in this way may be subject to rapid extinction. The fixed ratio schedule of reinforcement applies the reinforcer after a set number of occurrences of the desired behaviors. One organizational example of this schedule is a sales commission based on number of units sold. Like the fixed interval schedule, the fixed ratio schedule may not produce consistent, long-lasting, behavioral change. Variable interval reinforcement schedules are employed when desired behaviors are reinforced after varying periods of time. Examples of variable interval schedules would be special recognition for successful performance and promotions to higher-level positions. This reinforcement schedule appears to elicit desired behavioral change that is resistant to extinction. Finally, the variable ratio reinforcement schedule applies the reinforcer after a number of desired behaviors have occurred, with the number changing from situation to situation. The most common example of this reinforcement schedule is the slot machine in a casino, in which a different and unknown number of desired behaviors (i.e., feeding a quarter into the machine) is required before the reward (i.e., a jackpot) is realized. Organizational examples of variable ratio schedules are bonuses or special awards that are applied after varying numbers of desired behaviors occur. Variable ratio schedules appear to produce desired behavioral change that is consistent and very resistant to extinction.

REINFORCEMENT THEORY APPLIED TO ORGANIZATIONAL SETTINGS Probably the organizational best-known application settings is called of the principles of reinforcement theory to modification, or behavioral contingency

behavioral

management. Typically, a behavioral modification program consists of four steps: 1. Specifying the desired behavior as objectively as possible. 2. Measuring the current incidence of desired behavior. 3. Providing behavioral consequences that reinforce desired behavior. 4. Determining the effectiveness of the program by systematically assessing behavioral change. Reinforcement theory is an important explanation of how people learn behavior. It is often applied to organizational settings in the context of a behavioral modification program. Although the assumptions of reinforcement theory are often criticized, its principles continue to offer important insights into individual learning and motivation.