It helps employees to become generalists rather than specialise, although a specialism benefits the organisation as well. This job security or job guarantee generates loyal employees who feel part of the organisation. Long-term employmentįollowing the need for safety, as Abraham Maslow mentioned, it is vital for employees to possess the certainty that they will have a job in the future. By involving employees in decision-making, they feel part of the organisation and will do everything they can to maintain the decision taken. This is the core principle of the Z theory and connects to the previously mentioned Y theory. It has the following characteristics:įigure 1 – The 7 Characteristics of Theory Z by William Ouchi 1. The theory Z is a continuation of this last style, which makes it an even more participative style than the Y theory. The X theory is also referred to as ‘hard’ management style and the Y theory as ‘soft’ or ‘enlightened’ management style. this quickly turns into the fourth step, in which people look for appreciation and reward and ultimately have the need to develop themselves. The next step to climb is the need to be socially accepted by your community. The next step in the pyramid is the secondary safety need everyone is looking for security and, for example, a permanent job can fulfil this because there is the security of a monthly salary. This structure is known as Maslow’s Pyramid, in which he indicates that every person starts on the bottom step and always wants to have the primary (physical) basic needs such as food, drinks and shelter satisfied. Thirdly, these needs can be classified according to a hierarchical structure. Secondly, human behaviour is purposeful and motivates people when their needs are fulfilled. Firstly, he indicated that human needs are never completely satisfied. Theory Z versus Hierarchy of NeedsĪbraham Maslow previously developed a pre Z theory in 1970, based on three assumptions. These higher psychological needs must be taken seriously and are the key to motivated employees. On the other hand, McGregor wrote his Y-theory, in which he indicated that employees get satisfaction from their work and greatly appreciate being able to brainstorm and play a role in decision-making. The idea that employees may have their own initiative is unthinkable. The X theory suggests that it is prudent to use autocratic and directive leadership and leave nothing to chance. The X theory states that employees are naturally lazy and only motivated to work because of the salary they receive. Ouchi’s Z theory adds an extra component to the McGregor Theory X and Theory Y of social psychologist Douglas McGregor, who formulated his theory in the seventies. McGregor Theory X and Theory Y a sinput for Theory Z The theory Z also assumes that employees trust that they can carry out their work properly with the right support from management. Employees find a work-life balance important and want to maintain this.įamily, culture and traditions are therefore just as important as working conditions. Another assumption is that employees expect reciprocity and support from their organisation. The possibility for development and training can also be included on this list. This requires a high level of support from the manager and the organisation in the form of a safe working environment and the right facilities. Employees have a strong desire for connection. The theory Z revolves around the assumption that employees want to enter into partnerships with their employer and colleagues. The loyalty of employees is increased by offering them a job for life with a strong focus on employee well-being both on the job as well as in their private lives. In 1981 William Ouchi, of Japanese heritage, wrote his book ‘ Theory Z: How American Business can meet the Japanese Challenge.‘ According to Ouchi, the theory Z promotes stable employment, high productivity and high morality and employee satisfaction. Do you want unlimited ad-free access and templates? Find out more
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