Application of Mcgregor’s Theory X and Theory Y: Perception of Management toward the Employees in the Banking Industry of Bangladesh

The purpose of this research paper is to study the application of well-known theory X and theory Y in the banking sector of Bangladesh based on the perception of management toward the employees. Analyzing the perception of the management seems rational as banking job appears highly paid, high target oriented, stressful job now where employee satisfaction is significantly related with how management handle them from their perception toward the employees. Statistical tools as structural equation modeling, correlation, regression, test of hypothesis and ANOVA have been conducted using SPSS to analyze data. Primary data has been collected from 285managers selected randomly through quota sampling who are serving inseveral branches of different banks surrounding all over the country (8 divisions)and secondary data has been collected from some banking reviews and literature reviews. This study identifies that significant portion of the respondents (74%) have perceived the assumptions of theory Y toward their employees. Assumptions of theory X have been perceived by only few respondents (26%). The results of the analysis revels strong evidence (statistically significant) that management of banks holds the assumptions of theory Y regarding their employees such as employees inherently like to work, can exercise self- control, can exercise self- direction, do not avoid responsibility, have ingenuity and creativity in problem solving, are not narrowly distributed in the population, have unlimited potential and employees are committed to objectives against rewards associated with achievement. The research paper recommends instigating research institutions in banks besides training institutions for encouraging innovation and financial engineering. The study will provide insights to the policy makers and bankers to manage their human resources providing opportunities for development of the employees. It is the first attempt to study these popular management theories in terms of banking industry in Bangladesh.