features of Principles of Management

1.    Principles of Management are Universal

• a.      Management principles are applicable to all kinds of organizations - business & non business.
• b.      They are applicable to all levels of management.
• c.      Every organization must make best possible use by the use of management principles.
• d.      Therefore, they are universal or all pervasive.

2.      Principles of Management are Flexible

• a.      Management principles are dynamic guidelines and not static rules.
• b.      There is sufficient room for managerial discretion i.e. they can be modified as per the requirements of the situation.
• c.      Modification & improvement is a continuous phenomenon in case of principles of management.

3.      Principles of Management have a Cause & Effect Relationship

• a.      Principles of management indicate cause and effect relationship between related variables.
• b.      They indicate what will be the consequence or result of certain actions. Therefore, if one is known, the other can be traced.  

5.      Principles of Management are of Equal Importance

• a.      All management principles are equally important.
• b.      No particular principle has greater importance than the other.
• c.      They are all required together for the achievement of organizational goals.
•  

Scientefic management and principles

Fredrick Winslow Taylor ( March 20, 1856 - March 21, 1915) commonly known as ’Father of Scientific Management’ started his career as an operator and rose to the position of chief engineer. He conducted various experiments during this process which forms the basis of scientific management. It implies application of scientific principles for studying & identifying management problems.

According to Taylor, “Scientific Management is an art of knowing exactly what you want your men to do and seeing that they do it in the best and cheapest way”. In Taylors view, if a work is analysed scientifically it will be possible to find one best way to do it.

Hence scientific management is a thoughtful, organized, dual approach towards the job of management against hit or miss or Rule of Thumb.

According to Drucker, “The cost of scientific management is the organized study of work, the analysis of work into simplest element & systematic management of worker’s performance of each element”.

1.      Development of Science for each part of men’s job (replacement of rule of thumb)

a.      This principle suggests that work assigned to any employee should be observed, analyzed with respect to each and every element and part and time involved in it.

b.      This means replacement of odd rule of thumb by the use of method of enquiry, investigation, data collection, analysis and framing of rules.

c.      Under scientific management, decisions are made on the basis of facts and by the application of scientific decisions.

2.      Scientific Selection, Training & Development of Workers

a.      There should be scientifically designed procedure for the selection of workers.

b.      Physical, mental & other requirement should be specified for each and every job.

c.      Workers should be selected & trained to make them fit for the job.

d.      The management has to provide opportunities for development of workers having better capabilities.

e.      According to Taylor efforts should be made to develop each employee to his greatest level and efficiency & prosperity.

3.      Co-operation between Management & workers or Harmony not discord

a.      Taylor believed in co-operation and not individualism.

b.      It is only through co-operation that the goals of the enterprise can be achieved efficiently.

c.      There should be no conflict between managers & workers.

d.      Taylor believed that interest of employer & employees should be fully harmonized so as to secure mutually understanding relations between them.

4.      Division of Responsibility

a.      This principle determines the concrete nature of roles to be played by different level of managers & workers.

b.      The management should assume the responsibility of planning the work whereas workers should be concerned with execution of task.

c.      Thus planning is to be separated from execution.

5.      Mental Revolution

a.      The workers and managers should have a complete change of outlook towards their mutual relation and work effort.

b.      It requires that management should create suitable working condition and solve all problems scientifically.

c.      Similarly workers should attend their jobs with utmost attention, devotion and carefulness. They should not waste the resources of enterprise.

d.      Handsome remuneration should be provided to workers to boost up their moral.

e.      It will create a sense of belongingness among worker.

f.        They will be disciplined, loyal and sincere in fulfilling the task assigned to them.

g.      There will be more production and economical growth at a faster rate.

6.      Maximum Prosperity for Employer & Employees

a.      The aim of scientific management is to see maximum prosperity for employer and employees.

b.      It is important only when there is opportunity for each worker to attain his highest efficiency.

c.      Maximum output & optimum utilization of resources will bring higher profits for the employer & better wages for the workers.

d.      There should be maximum output in place of restricted output.

e.      Both managers & workers should be paid handsomely.

study of fayol and taylor

Both the persons have contributed to development of science of management. The contribution of these two pioneers in the field of science of management has been reviewed as “The work of Taylor & Fayol was, of course, especially complementary. They both realized that problem of personnel & its management at all levels is the key to individual success. Both applied scientific method to this problem that Taylor worked primarily from operative level, from bottom to upward, while Fayol concentrated on managing director and work downwards, was merely a reflection of their very different careers”. They both differ from each other in following aspects: -

1.      Taylor looked at management from supervisory viewpoint & tried to improve efficiency at operating level. He moved upwards while formulating theory. On the other hand, Fayol analyzed management from level of top management downward. Thus, Fayol could afford a broader vision than Taylor.

2.      Taylor called his philosophy “Scientific Management” while Fayol described his approach as “A general theory of administration”.

3.      Main aim of Taylor - to improve labor productivity & to eliminate all type of waste through standardization of work & tools. Fayol attempted to develop a universal theory of management and stressed upon need for teaching the theory of management.

4.      Taylor focused his attention on fact by management and his principles are applicable on shop floor. But Fayol concentrated on function of managers and on general principles of management wheel could be equally applied in all.

Similarity - Both emphasized mutual co-operation between employment and employees.

Spheres of Human Activity-Fayol’s theory is more widely applicable than that of Taylor, although Taylor’s philosophy has undergone a big change Under influence of modern development, but Fayol’s principles of management have stood the test of time and are still being accepted as the core of management theory.

Psychologists View Point

According to Psychologists, Taylor’s study had following drawbacks: -

1.      Ignores human factors - Considers them as machines. Ignores human requirements, want and aspirations.

2.      Separation of Planning and Doing.

3.      Dissatisfaction - Comparing performance with others.

4.      No best way - Scientific management does not give one best way for solving problems.

Basis	Taylor	Fayol
Human aspect	Taylor disregards human elements and there is more stress on improving men, materials and methods	Fayol pays due regards on human element. E.g. Principle of initiative, Espirit De’ Corps and Equity recognizes a need for human relations
Status	Father of scientific management	Father of management principles
Efficiency & administration	Stressed on efficiency	Stressed on general administration
Approach	It has micro-approach because it is restricted to factory only	It has macro-approach and discuses general principles of management which are applicable in every field of management.
Scope of principles	These principles are restricted to production activities	These are applicable in all kinds of organization regarding their management affairs
Achievement	Scientific management	Administrative management

Management as both Science and Art:

Science is a systematic body of knowledge pertaining to a specific field of study that contains general facts which explains a phenomenon. It establishes cause and effect relationship between two or more variables and underlines the principles governing their relationship. These principles are developed through scientific method of observation and verification through testing.

Science is characterized by following main features:

1. Universally acceptance principles - Scientific principles represents basic truth about a particular field of enquiry. These principles may be applied in all situations, at all time & at all places. E.g. - law of gravitation which can be applied in all countries irrespective of the time.

Management also contains some fundamental principles which can be applied universally like the Principle of Unity of Command i.e. one man, one boss. This principle is applicable to all type of organization - business or non business.

2. Experimentation & Observation - Scientific principles are derived through scientific investigation & researching i.e. they are based on logic. E.g. the principle that earth goes round the sun has been scientifically proved.

Management principles are also based on scientific enquiry & observation and not only on the opinion of Henry Fayol. They have been developed through experiments & practical experiences of large no. of managers. E.g. it is observed that fair remuneration to personal helps in creating a satisfied work force.

3. Cause & Effect Relationship - Principles of science lay down cause and effect relationship between various variables. E.g. when metals are heated, they are expanded. The cause is heating & result is expansion.

The same is true for management, therefore it also establishes cause and effect relationship. E.g. lack of parity (balance) between authority & responsibility will lead to ineffectiveness. If you know the cause i.e. lack of balance, the effect can be ascertained easily i.e. in effectiveness. Similarly if workers are given bonuses, fair wages they will work hard but when not treated in fair and just manner, reduces productivity of organization.

4. Test of Validity & Predictability - Validity of scientific principles can be tested at any time or any number of times i.e. they stand the test of time. Each time these tests will give same result. Moreover future events can be predicted with reasonable accuracy by using scientific principles. E.g. H2 & O2 will always give H2O.

Principles of management can also be tested for validity. E.g. principle of unity of command can be tested by comparing two persons - one having single boss and one having 2 bosses. The performance of 1st person will be better than 2nd.

It cannot be denied that management has a systematic body of knowledge but it is not as exact as that of other physical sciences like biology, physics, and chemistry etc. The main reason for the inexactness of science of management is that it deals with human beings and it is very difficult to predict their behavior accurately. Since it is a social process, therefore it falls in the area of social sciences. It is a flexible science & that is why its theories and principles may produce different results at different times and therefore it is a behavior science. Ernest Dale has called it as a Soft Science.

Management as an Art:

Art implies application of knowledge & skill to trying about desired results. An art may be defined as personalized application of general theoretical principles for achieving best possible results. Art has the following characters -

1. Practical Knowledge: Every art requires practical knowledge therefore learning of theory is not sufficient. It is very important to know practical application of theoretical principles. E.g. to become a good painter, the person may not only be knowing different colour and brushes but different designs, dimensions, situations etc to use them appropriately. A manager can never be successful just by obtaining degree or diploma in management; he must have also know how to apply various principles in real situations by functioning in capacity of manager.

2. Personal Skill: Although theoretical base may be same for every artist, but each one has his own style and approach towards his job. That is why the level of success and quality of performance differs from one person to another. E.g. there are several qualified painters but M.F. Hussain is recognized for his style. Similarly management as an art is also personalized. Every manager has his own way of managing things based on his knowledge, experience and personality, that is why some managers are known as good managers (like Aditya Birla, Rahul Bajaj) whereas others as bad.

3. Creativity: Every artist has an element of creativity in line. That is why he aims at producing something that has never existed before which requires combination of intelligence & imagination. Management is also creative in nature like any other art. It combines human and non-human resources in useful way so as to achieve desired results. It tries to produce sweet music by combining chords in an efficient manner.

4. Perfection through practice: Practice makes a man perfect. Every artist becomes more and more proficient through constant practice. Similarly managers learn through an art of trial and error initially but application of management principles over the years makes them perfect in the job of managing.

5. Goal-Oriented: Every art is result oriented as it seeks to achieve concrete results. In the same manner, management is also directed towards accomplishment of pre-determined goals. Managers use various resources like men, money, material, machinery & methods to promote growth of an organization.

Thus, we can say that management is an art therefore it requires application of certain principles rather it is an art of highest order because it deals with moulding the attitude and behavior of people at work towards desired goals.

Management as both Science and Art:

Management is both an art and a science. The above mentioned points clearly reveals that management combines features of both science as well as art. It is considered as a science because it has an organized body of knowledge which contains certain universal truth. It is called an art because managing requires certain skills which are personal possessions of managers. Science provides the knowledge & art deals with the application of knowledge and skills.

A manager to be successful in his profession must acquire the knowledge of science & the art of applying it. Therefore management is a judicious blend of science as well as an art because it proves the principles and the way these principles are applied is a matter of art. Science teaches to ’know’ and art teaches to ’do’. E.g. a person cannot become a good singer unless he has knowledge about various ragas & he also applies his personal skill in the art of singing. Same way it is not sufficient for manager to first know the principles but he must also apply them in solving various managerial problems that is why, science and art are not mutually exclusive but they are complementary to each other (like tea and biscuit, bread and butter etc.).

The old saying that “Manager are Born” has been rejected in favor of “Managers are Made”. It has been aptly remarked that management is the oldest of art and youngest of science. To conclude, we can say that science is the root and art is the fruit.

MOTIVATION

Motivation is the word derived from the word ’motive’ which means needs, desires, wants or drives within the individuals. It is the process of stimulating people to actions to accomplish the goals. In the work goal context the psychological factors stimulating the people’s behaviour can be - desire for money success recognition job-satisfaction team work, etc One of the most important functions of management is to create willingness amongst the employees to perform in the best of their abilities. Therefore the role of a leader is to arouse interest in performance of employees in their jobs. The process of motivation consists of three stages:-

1. A felt need or drive
2. A stimulus in which needs have to be aroused
3. When needs are satisfied, the satisfaction or accomplishment of goals.

Therefore, we can say that motivation is a psychological phenomenon which means needs and wants of the individuals have to be tackled by framing an incentive plan.

Importance of Motivation

Motivation is a very important for an organization because of the following benefits it provides:-

1. Puts human resources into action

   Every concern requires physical, financial and human resources to accomplish the goals. It is through motivation that the human resources can be utilized by making full use of it. This can be done by building willingness in employees to work. This will help the enterprise in securing best possible utilization of resources.

2. Improves level of efficiency of employees

   The level of a subordinate or a employee does not only depend upon his qualifications and abilities. For getting best of his work performance, the gap between ability and willingness has to be filled which helps in improving the level of performance of subordinates. This will result into-
   1. Increase in productivity,
   2. Reducing cost of operations, and
   3. Improving overall efficiency.

3. Leads to achievement of organizational goals

   The goals of an enterprise can be achieved only when the following factors take place :-
   1. There is best possible utilization of resources,
   2. There is a co-operative work environment,
   3. The employees are goal-directed and they act in a purposive manner,
   4. Goals can be achieved if co-ordination and co-operation takes place simultaneously which can be effectively done through motivation.

4. Builds friendly relationship

   Motivation is an important factor which brings employees satisfaction. This can be done by keeping into mind and framing an incentive plan for the benefit of the employees. This could initiate the following things:
   1. Monetary and non-monetary incentives,
   2. Promotion opportunities for employees,
   3. Disincentives for inefficient employees.
   In order to build a cordial, friendly atmosphere in a concern, the above steps should be taken by a manager. This would help in:
   1. Effective co-operation which brings stability,
   2. Industrial dispute and unrest in employees will reduce,
   3. The employees will be adaptable to the changes and there will be no resistance to the change,
   4. This will help in providing a smooth and sound concern in which individual interests will coincide with the organizational interests,
   5. This will result in profit maximization through increased productivity.

5. Leads to stability of work force

   Stability of workforce is very important from the point of view of reputation and goodwill of a concern. The employees can remain loyal to the enterprise only when they have a feeling of participation in the management. The skills and efficiency of employees will always be of advantage to employees as well as employees. This will lead to a good public image in the market which will attract competent and qualified people into a concern. As it is said, “Old is gold” which suffices with the role of motivation here, the older the people, more the experience and their adjustment into a concern which can be of benefit to the enterprise.

From the above discussion, we can say that motivation is an internal feeling which can be understood only by manager since he is in close contact with the employees. Needs, wants and desires are inter-related and they are the driving force to act. These needs can be understood by the manager and he can frame motivation plans accordingly. We can say that motivation therefore is a continuous process since motivation process is based on needs which are unlimited. The process has to be continued throughout.

We can summarize by saying that motivation is important both to an individual and a business. Motivation is important to an individual as:

1. Motivation will help him achieve his personal goals.
2. If an individual is motivated, he will have job satisfaction.
3. Motivation will help in self-development of individual.
4. An individual would always gain by working with a dynamic team.

Similarly, motivation is important to a business as:

1. The more motivated the employees are, the more empowered the team is.
2. The more is the team work and individual employee contribution, more profitable and successful is the business.
3. During period of amendments, there will be more adaptability and creativity.
4. Motivation will lead to an optimistic and challenging attitude at work place.

Essentials / Features of a Good Motivation System

Motivation is a state of mind. High motivation leads to high morale and greater production. A motivated employee gives his best to the organization. He stays loyal and committed to the organization. A sound motivation system in an organization should have the following features:

1. Superior performance should be reasonably rewarded and should be duely acknowledged.
2. If the performance is not consistently up to the mark, then the system must make provisions for penalties.
3. The employees must be dealt in a fair and just manner. The grievances and obstacles faced by them must be dealt instantly and fairly.
4. Carrot and stick approach should be implemented to motivate both efficient and inefficient employees. The employees should treat negative consequences (such as fear of punishment) as stick, an outside push and move away from it. They should take positive consequences (such as reward) as carrot, an inner pull and move towards it.
5. Performance appraisal system should be very effective.
6. Ensure flexibility in working arrangements.
7. A sound motivation system must be correlated to organizational goals. Thus, the individual/employee goals must be harmonized with the organizational goals.
8. The motivational system must be modified to the situation and to the organization.
9. A sound motivation system requires modifying the nature of individual’s jobs. The jobs should be redesigned or restructured according to the requirement of situation. Any of the alternatives to job specialization - job rotation, job enlargement, job enrichment, etc. could be used.
10. The management approach should be participative. All the subordinates and employees should be involved in decision- making process.
11. The motivation system should involve monetary as well as non- monetary rewards. The monetary rewards should be correlated to performance. Performance should be based on the employees’ action towards the goals, and not on the fame of employees.
12. “Motivate yourself to motivate your employees” should be the managerial approach.
13. The managers must understand and identify the motivators for each employee.
14. Sound motivation system should encourage supportive supervision whereby the supervisors share their views and experiences with their subordinates, listen to the subordinates views, and assist the subordinates in performing the designated job.

Self Motivation at Work

Self-motivation is a power that drives us to keep moving ahead. It encourages continuous learning and success, whatever be the scenario. Self-motivation is a primary means of realizing our goals and progressing. It is basically related to our inventiveness in setting dynamic goals for ourselves, and our faith that we possess the required skills and competencies for achieving those challenging goals. We often feel the need for self-motivation.

Following are the ways/techniques for self-motivation:

• Communicate and talk to get motivated: Communicating with someone can boost up your energy and make you go on track. Talk with optimistic and motivated individuals. They can be your colleagues, friends, wife, or any one with whom you can share your ideas.
• Remain optimistic: When facing hurdles; we always make efforts to find how to overcome them. Also, one should understand the good in bad.
• Discover your interest area: If you lack interest in current task, you should not proceed and continue with it. If an individual has no interest in the task, but if it is essential to perform, he should correlate it with a bigger ultimate goal.
• Self-acknowledgement: One should know when his motivation level is saturated and he feels like on top of the world. There will be a blueprint that once an individual acknowledge, he can proceed with his job and can grow.
• Monitor and record your success: Maintain a success bar for the assignments you are currently working on. When you observe any progress, you will obviously want to foster it.
•  Uplift energy level: Energy is very essential for self-motivation. Do regular exercises. Have proper sleep. Have tea/coffee during breaks to refresh you.
• Assist, support and motivate others: Discuss and share your views and ideas with your friends and peers and assist them in getting motivated. When we observe others performing good, it will keep us motivated too. Invite feedback from others on your achievements.
• Encourage learning: Always encourage learning. Read and grasp the logic and jist of the reading. Learning makes an individual more confident in commencing new assignments.
• Break your bigger goals into smaller goals: Set a short time deadline for each smaller goal so as to achieve bigger goal on time.

Classical Theories of Motivation

The motivation concepts were mainly developed around 1950’s. Three main theories were made during this period. These three classical theories are-

• Maslow’s hierarchy of needs theory
• Herzberg’s Two factor theory
• Theory X and Theory Y

These theories are building blocks of the contemporary theories developed later. The working mangers and learned professionals till date use these classical theories to explain the concept of employee motivation.

Maslow’s Hierarchy of Needs Theory

Abraham Maslow is well renowned for proposing the Hierarchy of Needs Theory in 1943. This theory is a classical depiction of human motivation. This theory is based on the assumption that there is a hierarchy of five needs within each individual. The urgency of these needs varies. These five needs are as follows-

Physiological needs- These are the basic needs of air, water, food, clothing and shelter. In other words, physiological needs are the needs for basic amenities of life. Safety needs- Safety needs include physical, environmental and emotional safety and protection. For instance- Job security, financial security, protection from animals, family security, health security, etc. Social needs- Social needs include the need for love, affection, care, belongingness, and friendship. Esteem needs- Esteem needs are of two types: internal esteem needs (self- respect, confidence, competence, achievement and freedom) and external esteem needs (recognition, power, status, attention and admiration). Self-actualization need- This include the urge to become what you are capable of becoming / what you have the potential to become. It includes the need for growth and self-contentment. It also includes desire for gaining more knowledge, social- service, creativity and being aesthetic. The self- actualization needs are never fully satiable. As an individual grows psychologically, opportunities keep cropping up to continue growing. According to Maslow, individuals are motivated by unsatisfied needs. As each of these needs is significantly satisfied, it drives and forces the next need to emerge. Maslow grouped the five needs into two categories -Higher-order needs and Lower-order needs. The physiological and the safety needs constituted the lower-order needs. These lower-order needs are mainly satisfied externally. The social, esteem, and self-actualization needs constituted the higher-order needs. These higher-order needs are generally satisfied internally, i.e., within an individual. Thus, we can conclude that during boom period, the employees lower-order needs are significantly met.

Implications of Maslow’s Hierarchy of Needs Theory for Managers

• As far as the physiological needs are concerned, the managers should give employees appropriate salaries to purchase the basic necessities of life. Breaks and eating opportunities should be given to employees.
• As far as the safety needs are concerned, the managers should provide the employees job security, safe and hygienic work environment, and retirement benefits so as to retain them.
• As far as social needs are concerned, the management should encourage teamwork and organize social events.
• As far as esteem needs are concerned, the managers can appreciate and reward employees on accomplishing and exceeding their targets. The management can give the deserved employee higher job rank / position in the organization.
• As far as self-actualization needs are concerned, the managers can give the employees challenging jobs in which the employees’ skills and competencies are fully utilized. Moreover, growth opportunities can be given to them so that they can reach the peak.

The managers must identify the need level at which the employee is existing and then those needs can be utilized as push for motivation.

Limitations of Maslow’s Theory

• It is essential to note that not all employees are governed by same set of needs. Different individuals may be driven by different needs at same point of time. It is always the most powerful unsatisfied need that motivates an individual.
• The theory is not empirically supported.
• The theory is not applicable in case of starving artist as even if the artist’s basic needs are not satisfied, he will still strive for recognition and achievement.

Herzberg’s Two-Factor Theory of Motivation

In 1959, Frederick Herzberg, a behavioural scientist proposed a two-factor theory or the motivator-hygiene theory. According to Herzberg, there are some job factors that result in satisfaction while there are other job factors that prevent dissatisfaction. According to Herzberg, the opposite of “Satisfaction” is “No satisfaction” and the opposite of “Dissatisfaction” is “No Dissatisfaction”.

 

FIGURE: Herzberg’s view of satisfaction and dissatisfaction

Herzberg classified these job factors into two categories-

1. Hygiene factors- Hygiene factors are those job factors which are essential for existence of motivation at workplace. These do not lead to positive satisfaction for long-term. But if these factors are absent / if these factors are non-existant at workplace, then they lead to dissatisfaction. In other words, hygiene factors are those factors which when adequate/reasonable in a job, pacify the employees and do not make them dissatisfied. These factors are extrinsic to work. Hygiene factors are also called asdissatisfiers or maintenance factors as they are required to avoid dissatisfaction. These factors describe the job environment/scenario. The hygiene factors symbolized the physiological needs which the individuals wanted and expected to be fulfilled. Hygiene factors include:

   Pay - The pay or salary structure should be appropriate and reasonable. It must be equal and competitive to those in the same industry in the same domain. Company Policies and administrative policies - The company policies should not be too rigid. They should be fair and clear. It should include flexible working hours, dress code, breaks, vacation, etc. Fringe benefits - The employees should be offered health care plans (mediclaim), benefits for the family members, employee help programmes, etc. Physical Working conditions - The working conditions should be safe, clean and hygienic. The work equipments should be updated and well-maintained. Status - The employees’ status within the organization should be familiar and retained. Interpersonal relations - The relationship of the employees with his peers, superiors and subordinates should be appropriate and acceptable. There should be no conflict or humiliation element present. Job Security - The organization must provide job security to the employees.

2. Motivational factors- According to Herzberg, the hygiene factors cannot be regarded as motivators. The motivational factors yield positive satisfaction. These factors are inherent to work. These factors motivate the employees for a superior performance. These factors are called satisfiers. These are factors involved in performing the job. Employees find these factors intrinsically rewarding. The motivators symbolized the psychological needs that were perceived as an additional benefit. Motivational factors include:
   • Recognition - The employees should be praised and recognized for their accomplishments by the managers.
   • Sense of achievement - The employees must have a sense of achievement. This depends on the job. There must be a fruit of some sort in the job.
   • Growth and promotional opportunities - There must be growth and advancement opportunities in an organization to motivate the employees to perform well.
   • Responsibility - The employees must hold themselves responsible for the work. The managers should give them ownership of the work. They should minimize control but retain accountability.
   • Meaningfulness of the work - The work itself should be meaningful, interesting and challenging for the employee to perform and to get motivated.

Limitations of Two-Factor Theory

The two factor theory is not free from limitations:

1. The two-factor theory overlooks situational variables.
2. Herzberg assumed a correlation between satisfaction and productivity. But the research conducted by Herzberg stressed upon satisfaction and ignored productivity.
3. The theory’s reliability is uncertain. Analysis has to be made by the raters. The raters may spoil the findings by analyzing same response in different manner.
4. No comprehensive measure of satisfaction was used. An employee may find his job acceptable despite the fact that he may hate/object part of his job.
5. The two factor theory is not free from bias as it is based on the natural reaction of employees when they are enquired the sources of satisfaction and dissatisfaction at work. They will blame dissatisfaction on the external factors such as salary structure, company policies and peer relationship. Also, the employees will give credit to themselves for the satisfaction factor at work.
6. The theory ignores blue-collar workers. Despite these limitations, Herzberg’s Two-Factor theory is acceptable broadly.

Implications of Two-Factor Theory

The Two-Factor theory implies that the managers must stress upon guaranteeing the adequacy of the hygiene factors to avoid employee dissatisfaction. Also, the managers must make sure that the work is stimulating and rewarding so that the employees are motivated to work and perform harder and better. This theory emphasize upon job-enrichment so as to motivate the employees. The job must 

Theory X and Theory Y

In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two aspects of human behaviour at work, or in other words, two different views of individuals (employees): one of which is negative, called as Theory X and the other is positive, so called as Theory Y. According to McGregor, the perception of managers on the nature of individuals is based on various assumptions. Assumptions of Theory X An average employee intrinsically does not like work and tries to escape it whenever possible. Since the employee does not want to work, he must be persuaded, compelled, or warned with punishment so as to achieve organizational goals. A close supervision is required on part of managers. The managers adopt a more dictatorial style. Many employees rank job security on top, and they have little or no aspiration/ ambition. Employees generally dislike responsibilities. Employees resist change. An average employee needs formal direction.

Assumptions of Theory Y

• Employees can perceive their job as relaxing and normal. They exercise their physical and mental efforts in an inherent manner in their jobs.
• Employees may not require only threat, external control and coercion to work, but they can use self-direction and self-control if they are dedicated and sincere to achieve the organizational objectives.
• If the job is rewarding and satisfying, then it will result in employees’ loyalty and commitment to organization.
• An average employee can learn to admit and recognize the responsibility. In fact, he can even learn to obtain responsibility.
• The employees have skills and capabilities. Their logical capabilities should be fully utilized. In other words, the creativity, resourcefulness and innovative potentiality of the employees can be utilized to solve organizational problems.

Thus, we can say that Theory X presents a pessimistic view of employees’ nature and behaviour at work, while Theory Y presents an optimistic view of the employees’ nature and behaviour at work. If correlate it with Maslow’s theory, we can say that Theory X is based on the assumption that the employees emphasize on the physiological needs and the safety needs; while Theory X is based on the assumption that the social needs, esteem needs and the self-actualization needs dominate the employees.

McGregor views Theory Y to be more valid and reasonable than Theory X. Thus, he encouraged cordial team relations, responsible and stimulating jobs, and participation of all in decision-making process.utilize the employee’s skills and competencies to the maximum. Focusing on the motivational factors can improve work-quality.

Implications of Theory X and Theory Y

1. Quite a few organizations use Theory X today. Theory X encourages use of tight control and supervision. It implies that employees are reluctant to organizational changes. Thus, it does not encourage innovation.
2. Many organizations are using Theory Y techniques. Theory Y implies that the managers should create and encourage a work environment which provides opportunities to employees to take initiative and self-direction. Employees should be given opportunities to contribute to organizational well-being. Theory Y encourages decentralization of authority, teamwork and participative decision making in an organization. Theory Y searches and discovers the ways in which an employee can make significant contributions in an organization. It harmonizes and matches employees’ needs and aspirations with organizational needs and aspirations.