Maslow's Needs Hierarchy
Abraham Maslow's hierarchy of needs helps us understand the motivation behind people’s actions. He identified five basic needs that explain people’s internal motivation process: physiological, safety, social, esteem, and self-actualization needs. The needs Maslow identified fall into a hierarchy of power to motivate behaviour. Each higher-order need becomes active and motivates a person only when lower-level needs have been fulfilled. Each person is assumed to have needs in each category. 
The starting point for understanding motivation is physiological needs. The person who is hungry or tired is not able to work. But once physiological needs are fulfilled, they lose their power to motivate. 
Then safety needs become important. For instance, workers are concerned about keeping their jobs and about being financially secure when they retire. Safety needs can be satisfied by the creation of seniority systems, pensions, and insurance plans. As with physiological needs, once most of the safety needs have been satisfied, the next level of needs becomes more important. 
Employees want to belong, want to be liked and to interact with other employees. Thus the friendly behaviour of individuals in small groups within organizations is a major source of satisfaction for social needs, which give the individuals support and encouragement. Also they get a sense of being an accepted member of the group. Once social needs have been largely satisfied, they also begin to lose their power to motivate. 
The esteem needs are needs for self-respect and respect from others. An important part of this area is that an employee's work efforts and output be recognized and appreciated by others. When the need for esteem is strong, the individual will often set difficult goals, work hard to achieve the goals, and expect to receive recognition for these efforts. Goal accomplishment and the resulting recognition lead to feelings of self-esteem and self-confidence. 
The top of the needs hierarchy is self-actualization, the ability to display and use one's full potential. This need takes over when an adequate level of satisfaction has been reached in the other four need levels. A person who reaches self-actualization has come close to using his or her full set of skills. Maslow noted that self-actualizing people display certain characteristics: • they tend to be serious and thoughtful, •they focus on problems outside themselves, •their behaviour is unaffected and natural, •they are strongly ethical. 
Most people think of artists, composers, and scientists as seeking self-actualization. Because people work to satisfy the more basic needs, managers often overlook employees' self-actualization need. Reaching a level of complete self-actualization rarely occurs. Certainly it is hard to achieve if other needs are not being adequately satisfied. But everyone is capable of partially satisfying the self-actualization need. 
Of course employees differ in the intensity of their needs. Some have an intense security need that will dominate their behaviour no matter what managers do. Others are more strongly influenced by esteem needs. Managers have no standard program to follow when attempting to encourage a high-level of motivation. Differences in personal background, experience, and education are powerful; conditions that work for one individual may not work for another. 

McGregor's Theory X and Theory Y

Although managers should try to understand needs, they often don 't. Douglas McGregor, a professor of management, introduced a theory of two managerial styles. Theory X and Theory Y represent two extremely different positions: an autocratic management style and a democratic management style.  
Theory X managers are rather pessimistic because they assume that workers: 
•	 are lazy and sly
•	 dislike work 
•	 always find ways to avoid work 
•	 respond to threats, punishment or control 
•	 avoid responsibility because of a lack of ambition 
•	 want to be directed
•	 expect to be looked after 
A problem with making such assumptions about people is that these assumptions can become self-fulfilling. A manager with a Theory X view will probably focus on creating conditions only to satisfy physiological, safety or more or less social needs. Of course some employees respond favourably to this style, but others feel frustrated and anxious, which brings up a lot of conflicts. The employees’ goals for self-esteem and self-actualization cannot be achieved. 
Theory Y managers use looser control, delegate authority and they are quite optimistic. They assume that the workers: 
•	 are initiative, creative and ambitious
•	 enjoy work and does not want to avoid it 
•	 wants to achieve organizational goals through self-directed behaviour 
•	 responds to rewards associated with corporate goals 
•	 accept responsibility 
•	 are intellectually underutilized
•	 work well because work is a psychological need for them
Theory Y reflects a managerial emphasis on human growth and development instead of coercive authority. Nowadays the idea of Theory Y is more appealing to most people. However, some workers feel uncomfortably in a Theory Y-oriented organization; some job situations call for autocratic controls. The key is always the manager! He or she must review the people involved and the situation and then determine if a Theory X or a Theory Y management style will work. 
Besides McGregor’s theory William Ouchi, a management researcher, introduces a participative managerial style. 
Ouchi's Theory Z 
In Japan Ouchi's Theory Z can lead successfully the highly motivated work force. This management style lets the employees participate in goal setting, decision making, problem solving, designing and implementing changes. The management tries to get everyone involved but they respect if somebody considers the task too difficult for him or her to solve. Theory Z gives the workers:  
•	 lifetime employment (to help satisfy physiological and safety needs) 
•	 consensus decision making (to help satisfy social needs) 
•	 individual responsibility (to help satisfy self-esteem needs) 
•	 careful evaluation and promotion (to build confidence and self-esteem) 
•	 opportunity to use skills (to help satisfy self-actualization needs)