People: Control, Freedom and the performance paradox


Traditional economic theory held that approximately one-third of an organisation’s cost base was in its ‘labour force’, a term which refers us back to an industrial age where labour was just that; labour. In the information age, the capital of many businesses is weighted much more heavily towards human capital, or ‘talent’ – where the main work of employees converting ‘inputs’ to ‘outputs’ in order to generate value is intellectual. These employees (often referred to as knowledge workers) may be scientists, researchers, analysts, traders, engineers, accountants, software developers, designers and architects: anyone who ‘thinks’ for a living.

Maybe that’s you?

This shift away from physical to mental labour is interesting when we think back to the idea from cybernetics that people are a dynamic, purposeful component of the complex system. Perhaps when the majority of workers were concerned with the transformation of physical inputs into a final product, their scope for influence on the system was relatively limited, and the management hierarchy was relatively flat. Now though, we know this is rarely the case. Knowledge workers certainly fit the picture of purposeful components within a purposeful system, operating within a context of responsibility, which may be either management-driven or leadership-driven depending upon the developmental maturity of the organisation.

When we start to investigate the purpose of these ‘components’ in order to understand how they engage with the broader system, it’s useful to explore the different theories of employee motivation.

Douglas McGregor in the 1960s expounded the notion that workers conform to one of two types of categorisation: They are either Theory X or Theory Y. Theory X infers a dislike of work and a need for coercion, direction and control to meet the needs of the organisation: A need to be managed. Theory Y implies the opposite: Work can meet their higher psychological needs but to do so, self-direction and self-control must pervade. This is an interesting proposition. Considering we are all model-making, meaning-seeking beings this model immediately forces us to recognise that we may or may not be operating from one of these points of view. It is a potentially useful model as it allows us to consider where we stand vis-à-vis our colleagues and collaborators.

In the 1980s William Ouchi developed another category: Theory Z. This is an extension of the Y point of view, stating that people in this category actively seek responsibility and in light of this, organisations should empower these employees to participate in decision-making activities. (Interestingly, there had been proponents of this since the 1950s born out of disagreement with Taylor’s doctrine of ‘Scientific Management’). The notion of a ‘Self Managing Work Team’ was given a theory-based grounding and has since come to embody all that leaders desire and yet, simultaneously, fear.