In the 1950s, Douglas McGregor (1906-1964), a psychologist who taught at MIT and served as president of Antioch College from 1948-1954, criticized both the classical and human relations schools as inadequate for the realities of the workplace.

He believed that the assumptions underlying both schools represented a negative view of human nature and that another approach to management based on an entirely different set of assumptions was needed. McGregor laid out his ideas in his classic 1957 article "The Human Side of Enterprise" and the 1960 book of the same name, in which he introduced what came to be called the new humanism.McGregor argued that the conventional approach to managing was based on three major propositions, which he called Theory X: 1. Management is responsible for organizing the elements of productive enterprise-money, materials, equipment, and people-in the interests of economic ends. 2. With respect to people, this is a process of directing their efforts, motivating them, controlling their actions, and modifying their behavior to fit the needs of the organization.

3. Without this active intervention by management, people would be passive-even resistant-to organizational needs.They must therefore be persuaded, rewarded, punished, and controlled. Their activities must be directed. Management's task was thus simply getting things done through other people.

According to McGregor, these tenets of management are based on less explicit assumptions about human nature. The first of these assumptions is that individuals do not like to work and will avoid it if possible. A further assumption is that human beings do not want responsibility and desire explicit direction.Additionally, individuals are assumed to put their individual concerns above that of the organization for which they work and to resist change, valuing security more than other considerations at work. Finally, human beings are assumed to be easily manipulated and controlled. McGregor contended that both the classical and human relations approaches to management depended this same set of assumptions.

He called the first style of management "hard" and identified its methods as close supervision, tight controls, and coercion.The hard style of management led to restriction of output, mutual distrust, unionism, and even sabotage. McGregor called the second style of management "soft" and identified its methods as permissiveness and need satisfaction. McGregor suggested that the soft style of management often led to managers' failure to perform their managerial role.

He also pointed out that employees often take advantage of an overly permissive manager by demanding more but performing at lower levels. McGregor drew upon the work of Abraham Maslow (1908-1970) to explain why Theory X assumptions led to ineffective management.Maslow had proposed that man's needs are arranged in levels, with physical and safety needs at the bottom of the needs hierarchy and social, ego, and self-actualization needs at upper levels of the hierarchy. Maslow's basic point was that once a need is met, it no longer motivates behavior; thus, only unmet needs are motivational. McGregor argued that most employees already had their physical and safety needs met and that the motivational emphasis had shifted to the social, ego, and self-actualization needs.Therefore, management had to provide opportunities for these upper-level needs to be met in the workplace, or employees would not be satisfied or motivated in their jobs.

Such opportunities could be provided by allowing employees to participate in decision making, by redesigning jobs to make them more challenging, or by emphasizing good work group relations, among other things. According to McGregor, neither the hard style of management based on the classical school nor the soft style of management inspired by the human relations movement were sufficient to motivate employees.Thus, he proposed a different set of assumptions about human nature as it pertains to the workplace. McGregor put forth these assumptions, which he believed could lead to more effective management of people in the organization, under the rubric of Theory Y. The major propositions of Theory Y include the following: 1.

Management is responsible for organizing the elements of productive enterprise-money, materials, equipment, and people in the interests of economic ends. 2. People are not by nature passive or resistant to organizational needs. They have become so as a result of experience in organizations. .

The motivation, potential for development, capacity for assuming responsibility, and readiness to direct behavior toward organizational goals are all present in people-management does not put them there. It is a responsibility of management to make it possible for people to recognize and develop these human characteristics for themselves.4. The essential task of management is to arrange organizational conditions and methods of operation so that people can achieve their own goals by directing their efforts toward organizational objectives.

Thus, Theory Y has at its core the assumption hat the physical and mental effort involved in work is natural and that individuals actively seek to engage in work. It also assumes that close supervision and the threat of punishment are not the only means or even the best means for inducing employees to exert productive effort. Instead, if given the opportunity, employees will display self-motivation to put forth the effort necessary to achieve the organization's goals. Thus, avoiding responsibility is not an inherent quality of human nature; individuals will actually seek it out under the proper conditions.Theory Y also assumes that the ability to be innovative and creative exists among a large, rather than a small segment of the population.

Finally, it assumes that rather than valuing security above all other rewards associated with work, individuals desire rewards that satisfy their self-esteem and self-actualization needs. Although McGregor did not believe that it was possible to create a completely Theory Y-type organization in the 1950s, he did believe that Theory Y assumptions would lead to more effective management.He identified several approaches to management that he felt were consistent with the precepts of Theory Y. These included decentralization of decision-making authority, delegation, job enlargement, and participative management.

Job enrichment programs that began in the 1960s and 1970s also were consistent with the assumptions of Theory Y. In the 1970s, 1980s, and 1990s, McGregor's conceptualization of Theory X and Theory Y were often used as the basis for discussions of management style, employee involvement, and worker motivation.Empirical evidence concerning the validity of Theory X and Theory Y, however, was mixed. Some writers suggested that organizations implementing Theory Y tended to revert back to Theory X in tough economic times.

Others suggested that Theory Y was not always more effective than Theory X, but that the contingencies of each managerial situation determined which of the approaches was more appropriate. Still others suggested extensions to Theory Y.One of these, William Ouchi's Theory Z, attempted to combine the strength of American management philosophies based on Theory Y with Japanese management philosophies. Along with writers such as Argyris and Likert, McGregor was one of several important humanist writers of the mid-twentieth century who argued that traditional organizational hierarchies create a state of dependence between subordinates and their managers and served as a bridge between the human relations school and a new form of organizational humanism based on Theory Y.