Criticisms of the Two Factor Theory

Douglas McGregor is best known for his formulation of two sets of assumptions i. Theory X and ii. Theory Y about human nature.

Theory X rests on an essentially negative and theory Y positing a view of people. Criticisms of the two-factor theory show as follows:

  • They have little ambition
  • Dislike work
  • Want to avoid responsibility
  • Need to be closely directed to work effectively
  • Theory Y, on the other hand, rests on a positive view of people
  • It assumes they can exercise self-direction,

a)  Accept responsibility, and
b)  Consider work to be as natural as rest or play.

  • Specific assumptions

The two-factor theory

Theory X

1. Theory X rests on an essentially negative view of people.

2. They dislike work and will avoid it if possible.

3. They have little ambition.

4. They want to avoid responsibility.

5. Most people must be coerced controlled and threatened with punishment to get them to work.

6. People are less ambitious and less interested in management’s success.

7. With this assumption, the managerial role is to coerce and control employees.

Theory Y

1. Theory Y rests on a positive view of people.

2. Work is as natural as play or rest.

3. People are not inherently lazy. They have become that way as a result of experience.

4. People will exercise self-direction and self-control in the service of objectives to which they are committed.

4. People have potential. Under proper conditions they learn to accept and seek responsibility, they have imagination, genuinely, and creativity that can be applied to work.

5. With these assumptions, the managerial role is to develop the potential employees and help them release that potential toward common objectives.


McGregor personally believed that Theory Y assumptions best captured the true nature of workers and should guide management practice.
Finally, he argued that managers should free up their employees to unleash their full creative and productive potential.

First, he stimulated subsequent generations of managers to think consciously about their belief systems and management models.

Second, he was an early advocate of the practical value of reading ad using research findings to better understand human behavior.

Third, he introduced and publicized one of the early theories of the motivation the hierarchy of needs models by A.H. Maslow.

Finally, he became a spokesman for a trend that had been developing over a long period of time the need to bring human values into balance with other values at work.

Theory Z and its propositions

There are citation contradictory assumptions in theory X and Theory Y which was developed by McGregor. Criticizing this phenomenon Mr. Lyndall F Urwick has proposed another theory of human behavior at the workplace which he named theory Z.

In developing the theory Urwick was of the view that the primary task of every manager is to produce and distribute goods or services at prices which the consumers are able and willing to pay. And he should direct the efforts of all those who associate with him towards this end. This theory has the following propositions:

Motivation the hierarchy of needs model by A.H Maslow

Finally, he became a spokesman for a trend that had been developing over a long period of time the need to bring human values into balance with other values at work.

Theory Z and its propositions

There are citation contradictory assumptions in theory X and Theory Y which was developed by McGregor. Criticizing this phenomenon Mr. Lyndall F Urwick has proposed another theory of human behavior at work palace which he named theory Z.

In developing the theory Urwick was of the view that the primary task of every manager is to produce and distribute goods or services at prices which the consumers are able and willing to pay. And he should direct the efforts of all those who associate with him towards this end. This theory has the following propositions:

  1. Management is responsible for organizing the various elements of productive enterprise-money, materials, machines, and men-in the interest of the economic end.
  2. Economic ends in a free society are determined by the choices of innumerable individuals known as consumers.
  3. This involves a network of decisions and communications through which management postulate leadership.
  4. Management groups the choices of consumers as:
  • To facilitate economic production and distribution of goods and services; and
  • to enable these people in their capacity as producers and distributors of the goods and services, to satisfy their needs.

5. In a handicraft economy, the consumer contacts directly with the producer as shown along the dotted line Ze-Zpd in the figure given below.

But in modern machine economy, there are eight points at which consumer is to more. The consumer choices may be misinterpreted in terms of producer/distributor needs.

The consumer has to move from a pint to point all around Z instead of direct to the producer from Ze-Zpd.

6. Man as a consumer insists that he requires the latest products of science and technology. So, he seeks change because there are always new developments in science and technology.

7. Man, as a consumer, insists that he requires the latest products of science and technology. So, he seeks change because there are always new developments in science and technology.

8. Management can overcome these difficulties of complex communication by improving the morale of workers. This involves:

  • Discipline i, e., the system of communication is precise and accepted by all concerned.
  • Confidence, i.e. each individual is confident that the organization will be benefited, so it safeguards his needs.

Assessment of Theory Z

The following points are noteworthy in assessing theory Z:

i. The analysis of the above propositions of theory Z suggests that human behavior in economic undertakings is best expressed by the symbol Z and not by symbol X or Y.

The whole economic process consists of relating the behavior of the individual consumer at the top left-hand corners of the Z (Ze) to the behavior of the same individual as a producer or distributor at the bottom right-hand corner of the Z(Zpd).

In between these two arms, and the diagonal of Z, representing a whole network of intermediate decisions involved in translating the behavior Z into the behavior of the same individual as Zp. or Ze.

ii. Urwick has also indicated that the behavior of the individual car. be directed towards achievement. Each individual should be aware of the organizational goal precisely and the contribution which his attempts are making towards achieving such goals.

Each individual should also feel confident that the realization of organizational goats will affect his needs positively and none of his needs will be threatened or frustrated or supposed by accepting the membership of the organization.

iii. Theory Z takes into account the organizational variables in shaping the behavior of individuals. Thus a particular individual will behave differently in different organizational conditions. From this point of view, the theory presents a more realistic picture of human behavior in the organization rather than making assumptions about human behavior.

Thus, the success of any organization depends ultimately on the morale of all those engaged in it. The theory however could not get much popularity in management literature because such propositions have been given in one form or the other in almost all the theories of motivation.

Equity Theory

Equity theory is based on the assumption of some researchers that, one of the most widely assumed sources of job dissatisfaction is the feeling of the employees that they are not being treated fairly by the management or organizational system. There are four referent comparisons that an employee can use:

Self Inside: An employee’s experiences in a different position inside his/her current organization.

Self-outside: An employee’s experiences in a situation or position outside his or her current organization.

Another inside: Another individual or group of individuals inside the employee’s organization.

Another outside: Another individual or group of individuals outside the employee’s organization.

Equity theory is based upon the recognition that employees are not only concerned about the rewards that they received for their efforts but also with the relationship of their rewards with the rewards received by others.

They make judgments of equity or inequity between their inputs and outcomes and the inputs and outcomes of others.

ERG Theory

Clayton Alderfer, a professor at Yale University, has worked on Maslow’s five needs theory and separated those into three major groups. He identified three core needs which are:

  • Existence (E)
  • Relatedness(R)
  • Growth (G)

+Existence group includes the needs of basic material for the survival of people and matches with Maslow’s Physiological and safety needs.

+Relatedness needs include the desire of people to have relationships or association with other people and matches with the social and esteem needs of the people.

+Growth needs include the desire for personal advancement and matches with esteem and self-actualization needs of Maslow’s Theory,

Besides the match between Maslow’s Theory and Alderfer’s ERG theory, there are two fundamental differences between these two theories.

The Expectancy Theory

A Widely accepted approach to motivation is the expectancy model, also known as expectancy. It is developed by V.H. Vroom.

This theory argues that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and the attractiveness of that outcome to the individual. Vroom explains that motivation is a product of three  factors such as:

  • Valence
  • Expectancy
  • Instrumentality

The function of these three factors can be shown in an equation:

Motivation=Valance x Expectancy x Instrumentality

This means that if money is to act as a strong motivation an employee must want more of it (valance), must believe that effort will be successful in producing desired performance (expectancy) and must trust that the monetary reward will follow better performance (instrumentality).

1. Valence: It refers to the strength of a person’s preference for receiving a reward. It is an expression of the amount of one’s desired to reach a goal, for example, if an employee strongly wants the promotion, then promotion has high valence for that employee.

Since people may have positive or negative preferences for an outcome, valance may be negative as well as positive. If a person is indifferent to an outcome, the valance is O. The total range is from-1 to 1. It can be shown by a figure.

2. Expectancy: It is the strength of belief that one’s work-related effort result in the completion of a task. It shows the individual’s high level of self-efficiency.

3. Instrumentality: Instrumentality refers to the probability that performance will result in a reward for a particular task, which means the ability of the job to avail the desired reward.

It is an area where management has many opportunities for building trust and taking positive action because it can change substantially the commotion between increased performance and reward.

  •  Effort performance relationship
  •  Performance reward relationship
  •  Reward and personal goal relationship

Behavior Modification Model

Organizational Behavior Modification is the application of reinforcement theory to people in organizational settings.

Organizational Behavior Modification characteristically uses positive reinforcement to encourage employees in desired behaviors.

The first step is to identify performance relate to behavioral events. Three kinds of organizational activity are associate with this behavior these are. The behavioral event it sets the performance that results and organizational consequences that befall in individual.

The manager nest measures baseline performance the existing level of performance for each individual. This is usually a state in terms of a percentage frequency across different time intervals.

The third step is identifying the existing behavioral contingencies or consequences of performance. At this point, the manager develops and applies an appropriate intervention strategy.

This is, some elements of the performance-reward linkage structure, process, technology-reward linkage-structure, process, technology, groups, or the takes is changed with the goal of making the high-level performance more rewarding.

Various kinds of positive reinforcement are used to guide employee behavior in the desired direction. After the intervention step, the manager again measures performance to determine whether the desired effect has been achieved. It not, the manager must redesign the intervention to repeat the entire process.

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