How to establish million dollar industry

                                          This approach aims at producing maximum employee satisfaction in order to increase efficiency and productivity. The approach is based on a series of studies by industrial psychologists beginning with the Hawthorne experiment in the U.S.A. in the early 1930s. The studies established the enormous importance of the human side of enterprise. It revealed for the first time in the nature of the human factor in an organization that was unknown before. Even before the full implication of the human relations approach could be understood for its effective application to industry. In the process, it becomes the most misunderstood and oversold idea. Later experiences have shown that there is no real evidence that employee satisfaction by itself increases efficiency and productivity. The Hawthrone studies represent the most significant research program undertaken to show the enormous complexity of the problem of production in relation to efficiency.


                                         Hawthorne studies were carried on over a period of 12 years. The most significant results of these studies are the fact that workers are affected by factors outside the job to an even greater extent than by those on the job itself, and that they organize into formal social groups. These organizations take precedence over management employee organizations and determine production to as great an extent as do changes of a job environment nature. The disregard of 'outside the job' factors and employee self grouping had led many studies conducted by management to erroneous conclusions. The Hawthorne studies show the complete interrelatedness of the various problems and demonstrate that changes in the work environment, rest pauses, hours of work, hours in the working week, fatigue, monotony, incentives, employee attitudes, employee organization both formal and informal and employee-employer relations are all intimately related.


                                       George Elton Mayo was incharge of certain experiments on human behavior carried out at the Hawthorne works of the western electric company in Chicago. Mayo draw the conclusion from the Hawthorne experiments:-

  • Work is a group activity.
  • The social world of the adult is primarily patterned about work activity.
  • The need for recognition, security and the sense of belonging is more important in determining worker's morale and productivity than the physical conditions under which he works.
  • A worker is a person whose attitudes and effectiveness are conditioned by social demands from both inside and outside the work era.
  • Group collaboration does not occur by accident; it must be planned and developed. If group collaboration is achieved. Then the human relations with a work area may reach a cohesion which resists the disrupting effects of adaptive society.

                                        Mayo had discovered a fundamental concept that seems obvious today. Workplaces are social environments and within them, people are motivated by much more than economic self-interest. He concludes that all aspects of that industrial environment carried social value.

Note:- The portion of the Hawthorne studies that dwelt on the positive effects of benign supervision and concern for workers that made them feel like part of them become known as the Hawthorne effect.

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