3.4.4 How do X-, Y- and Z-Leaders perceive their Workers?

McGregor identified two major perspectives held by managers: Theory X and Theory Y. Generally speaking theory X is the assumption that employees are lazy, dislike work and responsibilities, and must be coerced to perform well. On the contrary, theory Y is the assumption that employees like their work, are creative, seek responsibility and can exercise self-direction. (Jeremiah 2009)
The work of McGregor was based on Maslow's hierarchy of needs. He grouped Maslow´s hierarchy into "lower order" needs (Theory X) and "higher order" needs (Theory Y). In the diagram below SA stands for self-actualisation.

Figure 13: Theory X and Y in the framework of Maslow´s hierarchy of needs.

McGregor stated that a theory X trainer "will insist that the exercise be conducted strictly according to the rules, while a theory Y trainer will expect participants to stay within acceptable boundaries of behavior. The latter will also be willing to watch where the learning process takes the group". (Sleigh 2007)

Figure 14: Theory X and Y in a company.

Theory Z is an extension of Theory Y from McGregor and was developed by William Ouchi. Ouchi based his work not only on McGregor arguments but also "built Theory A (American style) and Theory J (Japanese style) to build his hybrid Theory Z".(Layson) One of the most striking differences between Theory X-Y and Theory Z is that the first two theories focus on personal leadership styles of individual managers, while Theory Z focuses on the culture of the entire organization and how it can affect the way in which the organization is managed. Each manager should try to find a point of interaction with the company staff whereby staff opinion and feedback, will be highly appreciated and in this context task assignment and authority will be respected.