X-Y theory: The X-Y theory is a concept in organizational psychology developed by Douglas McGregor in the 1960s. It describes two opposing assumptions about the nature of employees and their attitude to work.
Theory X: Theory X assumes that employees generally have little ambition, avoid responsibility and resist work. Under this assumption, incentives and punishments are necessary to motivate and manage employees.
Theory Y: In contrast, Theory Y assumes that employees are motivated, take responsibility and want to be creative. Under this assumption, leadership requires a democratic and participative approach that utilizes the skills and potential of employees.
X-Y theory provides a framework for understanding leadership styles and management approaches and influences the way organizations view and manage their employees.