Theory X and Theory Y

Human relation theorists emphasize the impact of individual characteristics like race, sex, class, cultural background on organizational and group behavior. Douglas McGregor's book on "The Human Side of Enterprise" distiguished between Theory X (classical systems theory) and Theory Y (human relations theory).
Under Theory X, managers assume workers dislike and avoid work if possible, so they must use coercision, threats, and various control schemes to get workers to make adequate efforts against objectives. They assume the average worker wants to be directed and prefers to avoid responsibility, has little ambition, and wants security above all (paraphrase from McGregor p. 33-34).

Theory Y, on the other hand, assumes that individuals do not inherantly dislike work, but see it as natural as play or rest. Furthermore, external control and threat isn't the only way to encourage productivity, and the most significant rewards are the "satisfaction of ego" and "self-actualization needs".

Resource:
http://faculty.babson.edu/krollag/org_site/encyclop/theory_xy.html