13.8 million working days and 13 Billion Dollars. Yes, that’s the figure companies lose every year due to employee burnout and stress. A good majority of the reasons why employees feel stressed out is because of the way they are treated at work by their superiors. The concept of Theory X and Theory Y was first espoused by Douglas McGregor at the MIT Sloan School of Management. Theory X believes employees are inherently lazy and avoid work whereas Theory Y holds they are ambitious and self-motivated towards their work.
Any employee worth his salt is able to quickly identify one style of function from the other. There are ample examples of both styles in most organizations.
Any employee worth his salt is able to quickly identify one style of function from the other. There are ample examples of both styles in most organizations.
The question here is “Who stands to gain with Theory X managers?” Another way to paraphrase the question would be ” Is Theory X style of functioning conducive for long term prosperity of organizations?“
Let’s look at this question from the viewpoint of the key stakeholders of an enterprise:
a) Customers – Theory X managers have a problem of being less approachable. Subordinates who work under them seldom muster up the courage to open up and share their problems or challenges at work. Ever heard of customers dying because of Theory X supervision ? That’s exactly what happened to the customers of an airline on an ill fated evening flight to Amsterdam. The co pilots of Boeing 707 were scared to ask their pilot why he had not switched on the landing lights despite extremely poor visibility on that fateful day. Though this example sounds extreme, how many times have we come across distressed employees trying to push products without properly informing customers about its features. What is beneficial for one customer could turn out to be a handicap to another in many instances. Unfortunately , the horrendous negative pressure from above is one of the reasons which pushes employees to just get ahead with a sale without briefing the customer what he ought to know. A perfect example of this is what has happened to the insurance industry in India with reference to the ULIP plans. Who stands to lose here?
b) Employees – Every year companies invest considerable amount of time and money on training new employees. When employees leave, the company stands to loose out after spending so much money in training and development. The no.1 reason for attrition seems to be “The Boss “. It’s no secret that happy employees make customers happier and employees can remain happy only if they are given positive motivation and guidance. This is not to say that bosses need to keep a smiling face even if employees screw up. But criticism needs to be constructive. Never recognising achievements correctly and in time in the belief that recognition will lead to complacency is a sure fire way to ensure that employees start looking out for better options at the next best opportunity.
c) Shareholders – Why would you as an investor want to hold onto a company which does not keep its customers and employees happy? All great investors from Philip A Fischer, who wrote Common stocks & Uncommon Profits to Warren Buffet, the Billionaire investor consider these two points mentioned above as one among the most important criteria in selecting good companies for the long run. When you have people who have beaten the S&P YOY and earned a 21% Compounded return on investment speak along these lines, one has little to argue.
d) Management – We’ve heard this oft repeated ‘gyan’ about – “Management exists for shareholder benefits” If shareholders ,customers and employees needs are not taken care of then the existence of the management team itself is pointless. Reasons for the management to ignore or cling on to such managers could range from the inability of the management team to find a suitable replacement to sheer lack of guts in confronting the manager and giving due feedback which could set the stage for some much required behavioural training.
The hard fact of the matter is that though it more than half a century since the first management institute was set up in India for furthering the cause of management, most companies are still clueless about identifying and correcting behavioural attitudes impacting their organizations.
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