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The Human Relations School

The informal and formal traditions differ from each other in both major assumptions and principal research directions. Formal theories assumed that workers were motivated to maximize their economic gains, informal theories consider noneconomic needs as well. Thus, researchers in the informal school sought to determine which noneconomic factors might have an impact on workers and their performance. The first major studies on human relations were conducted at the Western Electric Hawthorne plant in Cicero, Illinois, between 1927 and 1932. Elton Mayo and his associates at the Harvard Business School intended to measure the effects of worker fatigue on production. But their research was expanded and resulted in a set of findings about motivation, productivity, and other job-related factors not based solely on economic reward. Specifically, the Hawthorne studies centered on how workers reacted to actions of management, how variations in physical working conditions affected output, and how social interactions among workers affected job performance. Hawthorne or “halo” effect is the tendency of those being observed to change their behavior to meet the expectations of researchers. The Hawthorne studies paved the way to investigate factors other than formal organizational structure and operations, and established the importance of social structure and worker interaction. These studies became the basis for the human relations school of organization theory, which stressed the social and psychological dimensions of organizations, particularly satisfaction and motivation. Organizational humanism marked a turning point, serving as a bridge between the human relations approach and what we refer to as modern organization theory.