The Irony of Humanistic Management Resulting in Worker Exploitation
Is humanistic management a tool for motivation or manipulation?
A revolutionary concept in management theory, McGregor’s Theory X/Y contested the 19th-century predominant view brought by Frederick Winslow Taylor’s The Principles of Scientific Management (1911).
The classical perspective of management emerged in response to the increased need for efficiency brought upon by the industrial revolution. Organizations viewed workers as costs to cut whenever possible.
Although Taylor developed the theory of scientific management, Frank & Lilian Gilbreth tested it using their time and motion studies. Scientific management aimed to find the ‘best way’ of performing each job, measuring the time it takes for actions to be completed and suggesting ways to streamline the process. It also includes wage incentives and training workers.
The humanistic perspective of management emerged after, with early advocates Mary Parker Follet and Chester Barnard emphasizing the importance of understanding human needs and behaviour to increase productivity.
Theory X, representing Taylor’s traditionalist view, states that workers fundamentally dislike work, are only motivated by financial incentives and have little creativity. The suggestion is that in order to produce good results, workers must be directed, forced, and coerced by upper management.
On the other hand, McGregor’s The Human Side of Enterprise (1960) contrasted Taylor’s approach of scientific management with a humanistic perspective of management, represented by Theory Y. It states that humans naturally derive meaning from work, will direct ourselves towards a goal we find meaningful, seek responsibility, have abundant amounts of creativity, and are motivated by the right conditions.
This article would measure the merits of Theory X/Y from two perspectives: (1) Evaluate McGregor’s claim that Theory Y is more effective than Theory X, and (2) Analyze whether separating management styles into Theory X/Y is useful or whether it is overly simplistic.
Starting by analyzing the advantages of Theory X/Y, this article will provide an example of a favorable organizational outcome derived from its application. Next, a critique towards Theory X/Y would be provided, using a case study to demonstrate its limitations.
Why Theory X/Y was a useful concept
McGregor’s vision for how management should be done would not be as renowned had it not been for the memorable and easily digestible categorization of Theory X/Y. The simplicity of the idea makes it a good meme, or “a replicator that functions as the basic unit of cultural change”.
By making a simple distinction between the “old” way versus the “new” way, McGregor’s only book has become one of the most cited by management scholars. Moreover, although Theory X/Y seems to merely contrast and analyze different management styles, a read of The Human Side of Enterprise (1960) would show that McGregor’s purpose in writing the book was to advocate for Theory Y.
By operating under the false premise that workers are primarily motivated by money, organizations have spent billions of dollars in an attempt to increase productivity. Not only is the effect of money on employee motivation marginal, but the opportunity costs for those financial resources are significant.
Furthermore, in a study done by Elton Mayo and Fritz Roethlisberger, they tested to see whether light could increase employee productivity. However, they discovered that it was not light that increased workers’ productivity, but the fact that they felt their work was appreciated by the researchers.
This accidental discovery was called the Hawthorne effect, where workers increase their productivity because they perceive an improvement in recognition and their work surroundings.
Theory X originated from systems that have been entrenched in society for a very long time, as even before the advent of capitalism and private enterprise, the monarchy, military, and church used to be dominant and are operated in a very hierarchical manner.
Prevalence of Theory Y in today’s world
Yet, even now militaries around the world are starting to consider Theory Y. It all started in 2003 when in the wake of 9/11, the US military entered Iraq to fight insurgents loyal to Osama Bin Laden, known as Al-Qaeda Iraq (AQI).
AQI operated in a very decentralized manner; the US military struggled to locate their central leader, and every time they thought they had assassinated the leader, a new one immediately took his place. Theory X no longer worked in the military, as on-the-ground soldiers found that Washington’s response to urgent decisions took too long.
In response, US General Stanley McChrystal applied Theory Y in managing soldiers of the Task Force: Soldiers were encouraged to make their own decisions, proactively come up with solutions on the spot, and not rely too heavily on directions.
As a result, his team was successful in breaking AQI’s advance and assassinated their leader, Abu Musab al-Zarqawi, in 2006. As Stanley McChrystal wrote in Team of Teams (2015): “AQI’s very structure — networked and nonhierarchical — embodied this new world. In some ways, we had more in common with the plight of a Fortune 500 company trying to fight off a swarm of start-ups than we did with the Allied command battling Nazi Germany in World War II.”
How Theory Y is used to disempower workers
On the other hand, although framing Theory Y as an attempt to increase worker productivity instead of arguing on the grounds of morality made it more palatable to people in the 19th century, many organizations adopting Theory Y ended up forcing workers into participative activities in an attempt to increase the bottom line.
Even with Theory Y, the emphasis is still on a single bottom line, namely profits, rather than a triple bottom line, encompassing financial, environmental, and social outcomes.
While Theory Y appears to empower workers, it may put additional pressure to act a certain way, such as the additional emotional labour of pretending to enjoy one’s work. This has detrimental practical implications, especially regarding work-life balance.
Video game company Studio Gobo’s website states: “Fun is at the heart of what we do. We know that if we want to make fun games, we also have to have fun making games.”
They also promote “Gobo Friday Lunch,” with “Freshly cooked (free!) food by our in-house chef, the only rule is you’re not allowed to sit next to the people you did last week. It’s an opportunity to relax and hang out as a team and some of our best ideas have emerged over a warm home-cooked meal.”
Yet, Sarah Jaffe’s Work Won’t Love You Back (2021) revealed how Agwaze — a programmer working in Studio Gobo — truly feels, in that he feels the immense pressure to work overtime and that this home-like atmosphere at work simply blurs work-life balance.
“I have time periods where, like, I sleep for two or three hours,” he said. “I’m just going home to bed and waking up and going back again. I don’t remember what happened. I just remember going to bed and being in the office again.”
Perhaps the shift from “Coercing employees for profits” to “Motivating employees for profits” is not the answer. Perhaps the shift, albeit more complicated, should be from “Coercing employees for profits” to “Motivating employees to achieve goals that meaningfully benefit society — without sacrificing the physical wellbeing and mental health of those who strive for it.”
While McGregor’s Theory X states that workers dislike work and must be coerced or motivated by money, Theory Y states that work can be rewarding in the proper environment and that workers are creative and proactive.
The findings demonstrate that although McGregor was right that Theory Y is more effective than Theory X, his overly simplistic categorization of Theory X/Y caused businesses to exploit the emotional labour of workers; expecting them to not only work hard but be happy doing them, else they receive social punishment.
Theory X/Y has contributed greatly to the field of management theory and can be credited for shifting the status quo approach from scientific management to humanistic management.
Yet, the emphasis on workers having to love their work may contribute to a toxic organizational culture that normalizes neglecting one’s health. A more nuanced approach to ensuring self-actualization in the workplace must be developed, drawing attention away from motivating workers for the sake of pure profit to considering financial, environmental, and positive social outcomes equally — including the wellbeing of workers themselves.
As Douglas McGregor wrote in The Human Side of Enterprise (1960):
“Under the conditions of modern industrial life, the intellectual potentialities of the average human being are only partially utilized.”