Effective ways to manage people
Meeta Rajivlochan

The Human Side of Enterprise
by Douglas McGregor, Tata McGraw Hill, Delhi. Pages 423. Rs 395.

Douglas McGregor
Douglas McGregor

IN our normal lives, we know intuitively that people respond best to us if we appeal to their better instincts, whether to their desire to achieve or to a desire to be friendly or even to merely look good. Most people routinely try to establish some non-monetary basis to their relationships including that with the neighbourhood shopkeeper if only in an effort to ensure that they do not get cheated. Yet the same persons in an office situation often assume that people work only for money and material benefits.

How often have most of us told our domestics that it is their job to make the silver shine and that we are not going to police their movements on a daily basis. This does not mean that we don’t do such policing; merely that we try to reduce it’s incidence in an attempt to make them feel more responsible for what they do. So why is it that while people routinely apply these principles of man-management in their personal lives, these are just as routinely thrown out the window when it comes to man management in offices?

In this classic book, perhaps one of the most cited texts in the social sciences, McGregor tries to show that management strategies based on appealing to the finer instincts in human nature, now famous as "Theory Y", is a more effective way to manage people than appealing to their desire for filthy lucre which is "Theory X".

It is sometimes said that Theory Y amounts to an abdication of responsibility. Actually McGregor says nothing of the kind. He merely reiterates what should be common sense: that merely issuing an order does not mean ipso facto that it will be obeyed and since the job is to get the job done, perhaps managers should be looking for ways to ensure that the order gets obeyed rather than to debate whether it should be issued at all. He says that the context should determine action: that authority is perfectly appropriate as a means of influencing behaviour under certain circumstances but in others, other means of influence may work much better. In short, employees will work much better if they believe in what they are being asked to do rather than if they are merely ordered to.

Both theories are based on entirely different assumptions about the way in which human beings behave: while Theory X believes that it is natural for humans to shirk responsibility and to perform the minimum work possible, Theory Y believes that people are worthy of trust and respect and if given the opportunity to do so, will work on their own. So while Theory X managers set up elaborate systems of standardisation, control and policing to ensure minimum deviation from work norms, Theory Y managers rely more on integration of organisational and individual goals and self-control to achieve the same objective. Theory X managers rely on performance appraisal while Theory Y managers rely more on self-appraisal.

Theory Y strategies emphasize the need to treat all employees as human resources who can contribute productively to the organization rather than merely as cogs in a bureaucratic wheel. However, McGregor’s emphasis on the importance of individual innovation, on employee participation and the need to reduce standardisation and formalised procedures needs some qualification. In these days of ever expanding organisational size, standardisation such as the Six Sigma approach forms an essential basis for continuous improvement.

But the point about the importance of recognizing and enabling individual contribution is one worth noting for all organizations whether public or private. How often do people in the line departments/field jobs bemoan that if the management would only listen to some of their feedback, it would cut down on costs significantly.

Often organizations spend enormous amounts on hiring private consultants to write reports for them and then they spend even more on getting their employees to accept those reports while in most cases, the consultants merely articulate what some employees were saying anyway, had the managements cared to listen. In the private sector, the costs of such an exercise are monetary and tangible. In the government, the long-term costs of ignoring feedback are more intangible but far more destructive and the losses are far greater. A story told by P Sainath comes to mind in which in its zeal to distribute a new and improved breed of bulls in Orissa, the government successfully destroyed the old and hardy breed of the animal which had existed for time immemorial.

McGregor’s propositions are now part of management lore, yet Theory Y practices are the exception rather than the norm. One reason could be that Theory Y management styles are necessarily more subjective and require a great deal of skill and maturity to implement. Theory X on the other hand can work without much fine-tuning provided an overall organisational structure and reporting hierarchy exists. Another reason could be that Theory Y approaches require the kind of relative transparency and information sharing with employees which many companies might not be comfortable with. However, one gets a feeling that the real reason may well be that Theory Y demands a great deal of faith in human nature which perhaps is diminishing in our society day by day.

The commentary and annotations by Joel Cutcher-Gershenfield add a great deal to the book. They put McGregor’s insights in perspective and also show the myriad developments set in motion by his prescient propositions. The book is a veritable treasure trove of ideas and has something to offer to almost any lay reader who wishes to give some formal basis to his instinctive knowledge about how to make people work better.