Douglas McGregor (1906 – 1964) is one of the forefathers of contemporary management thinking. A social psychologist, he is most notably known for his Theory X and Theory Y from his 1960 book, The Human Side of Enterprise, which had a profound influence on the management field.
A B.E. Mechanical from Rangoon Institute of Technology, he then earned an A.B. from Wayne State University, and went on to study Psychology at Harvard University.
Armed with a Ph.D. from Harvard, McGregor was the first full-time psychologist on the faculty of Massachusetts Institute of Technology, and helped to found its Industrial Relations Section. He was the President of Antioch College for 6 years, and throughout his career he consulted for union and management alike and served on the panel of arbitrators for the American Arbitration Association.
In his youth, McGregor worked in his grandfather's institute for transient laborers in Detroit, where he gained insight into the problems faced by labor. Later, as district manager for a retail gasoline merchandising firm, he also learned the concerns of management.
The Human Side of Enterprise
Douglas McGregor’s seminal work, The Human Side of Enterprise, made his mark on the history of organizational management and motivational psychology when he proposed the two theories by which managers perceive employee motivation.
In the book, he identified an approach of creating an environment within which employees are motivated via authoritative, direction and control or integration and self-control. He began investigating the importance of people to business, and he believed something that CEOs today have come to understand: in order to thrive, an organization needs to harness the intelligence, enthusiasm, and commitment of all their employees. McGregor proved that to truly succeed, companies must cultivate an organization that is built on enduring relationships with the workforce and customers.
McGregor’s stress on the human side of enterprise came in the 1960s when a post-war generation was demanding more from work than a wage. He defined two sets of assumptions about human nature and explained how these affect people's attempts to influence the behavior of others, especially how they affect managers' attitudes toward employees. McGregor suggested that the styles and approaches that managers (and others in authority) used, and their effectiveness or ineffectiveness, were affected by the subtle, frequently unconscious effects of their assumptions about people.
McGregor debunked Taylorism1 and described a revolutionary way to manage people. He was the first to apply the findings in behavioral science to the world of business. Based on what had been learned about human behavior, McGregor explored the implications of managing people in a different manner than tradition dictated.
In his book, McGregor disputes the motivational value of traditional forms of merit pay in which employees receive small variations in compensation based on subjective assessments of performance. Instead, he favors group rewards based on objective measures of unit performance and substantial awards for the few outstanding performers. With the decline of unions and the corresponding increase in managerial discretion, merit pay of the sort that McGregor challenged is common practice.
The nature of work today makes McGregor's ideas more relevant than ever before. This has given rise to Douglas McGregor, Revisited: Managing the Human Side of the Enterprise by Gary Heil, Warren Bennis, Deborah C. Stephens. The book reflects the thinking and writing of McGregor applies his thinking to today's business world, proving again that the human aspect of work is crucial to organizational effectiveness. It also suggests how you can change your thinking and implement his ideas in your own business and workplace.
1 A theory of management that analyzes and synthesizes workflow...