The Human Side of Management

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One of the perks of living at the far end of Avondale road in Woodinville is easy access to the Woodinville Library. And one of the perks of a fine library is stumbling across a book that might have been buried 10 pages deep in a search results page. The Human Side of Management by Douglas McGregor is one of those books and if you haven't already guessed, it takes a look at "people management".

Let me ramble on about it for a few minutes?

In the book, McGregor proposes and compares Theory X and Theory Y, the traditional and "new" theory of management direction and control. The traditional view holds the following assumptions about human nature and human behavior:

  1. The average human being has an inherent dislike of work and will avoid it if he can.
  2. Because of this human characteristic of dislike of work, most people must be coerced, controlled, directed, threatened with punishment to get them to put forth adequate effort toward the achievement of organizational objectives.
  3. The average human being prefers to be directed, wishes to avoid responsibility, has relatively little ambition, wants security above all. [pp. 33-34]

Whereas Theory Y proposes the following:

  1. The expenditure of physical and mental effort in work is as natural as play or rest. The average human being does not inherently dislike work.
  2. External control and the threat of punishment are not the only means for bringing about effort toward organizational objectives. Man will excercise self-direction and self-control in the service of objectives to which he is committed.
  3. Commitment to objectives is a function of the rewards associated with their achievement.
  4. The average human being learns, under proper conditions, not only to accept but to seek responsibility. Avoidance of responsibility, lack of ambition, and emphasis on security are generally consequences of experience, not inherent human characteristics.
  5. The capacity to excercise a relatively high degree of imagination, ingenuity, and creativity in the solution of organizational problems is widely, not narrowly, distributed in the population.
  6. Under the conditions of modern industrial life, the intellectual potentialities of the average human being are only partially utilized. [pp. 47-48]

The theories represent two extremes and while McGregor avoids the terms, it seems clear that outside of specific applications, Theory X is "bad" while Theory Y is "good". McGregor argues that Theory X was formulated based on innapropriate or out-moded samples. Theory Y is more enlightened. I doubt you could find a company that was all X or all Y although companies looking to improve will be more Y than X. Got it?

Later in the book, McGregor gives a critique of performance appraisal:

  • Judgement standards are applied differently by management -- "The answer given by an appraisal form to the question: 'How has A done?' is as much a function of the superior's psychological make-up as of the subordinates performance." [p82]
  • With safeguards, it is possible to discriminate between the outstandingly good, the satisfactory, and the unsatisfactory performers. Any attempt to do finer discrimination is delusional. [p82]
  • Individual performance is mostly a function of how he is managed. [p83]
  • Judgements are affected by the degree to which they are used for administrative purposes. [p83]

McGregor also explores the different aspects of merit plans:

...merit plans are used to make not gross but fine differentiations between individuals. One may receive a 3 per cent increase, another 6 per cent, another 10 per cent. ...it is likely that the probable error of measurement of most merit rating plans is several times the magnitude of the differentiations that are made in their administration. [p95]

Priceless. And this from a book published in 1960. 1960. Ward Cleaver might have had a copy in his study when he was admonishing the Beav for bringing home Captain Jack, a pet alligator. In management as in literature, some ideas are universal and timeless.

Go out and find a copy. In the meantime, I may see what Drucker has to say.