In this episode, we examine Douglas McGregor’s most famous work, The Human Side of Enterprise, that proposed two “theories” encapsulating management assumptions about human behavior. His Theory X described the dominant thinking of the 1950s, where managers held a dim view of employees, who were assumed to be disinclined to work and had to be coerced into doing so. McGregor felt that Theory X led to adversarial relationships between managers and workers, resulting in poorer performance and an unhealthy environment. His Theory Y saw employees as wishing to be challenged and fulfilled if properly empowered and engaged.

The book has become a staple of management literature. Numerous studies of organizations have confirmed the benefits of Theory Y assumptions serving as the foundation for performance appraisals, reward systems, working in teams, and building worker commitment to the organization. The Annotated Edition of the book, published in 2006, includes dozens of additional callouts and citations of research and vignettes of management experience, demonstrated the continued relevance of this master work.