Fred Luthans defines Organizational Behaviour as "the understanding, prediction and management of human behaviour in organizations." According to Fred Luthans, three major events took place which led to the Human Relations Movement – these were
The Great Depression
Prior to the industrial revolution, people worked in small groups and had simple work relationships. They were however subjected to unhealthy working conditions and scarcity of resources, so they hardly had any job satisfaction. During the early stages of industrial revolution, the conditions of workers showed no signs of improvement. However, as increased industrial activity led to greater supply of goods and wages, the level of job satisfaction gradually improved. The Great Depression however made people realize that production could no longer be the only major responsibility of Management. The depression left in its wake severe problems of unemployment, discontent and insecurity which gradually led to greater importance given to the management of personnel. The Human factor gradually but quickly gained more and more importance.
The Rise of Trade Unionism
The passage of the Wagner Act led to emergence of organized labour movement. The revival of militant unionism triggered workers' interests in business activities of the organization. In India, the Trade Union Act 1926 enforced the belief that organized labour movements were here to stay. The only way to deal with organized labour movements or Trade Unions was to understand the foster the Human Relations. This gave the added impetus to the Human Relations Movement.
The Hawthorne experiments
The Hawthorne Works of the General Electric Company was a progressive organization. However, its managers were disturbed by the large number of complaints and high level of dissatisfaction among workers. The company hired efficiency experts to find out the cause of the problem, but the investigations failed. Later the Company requested the National Academy of Sciences to help them.
The Academy conducted various experiments which became known as the Illumination experiments. These experiments showed that productivity was influenced by some other variable or variables beyond wages, hours of work and working conditions.
The Relay assembly room experiments were conducted by a team of Harvard Business School. These are considered to be the actual beginning of the Hawthorne Studies since the Illumination Studies failed to come out with any conclusion. A group of six girls were selected for these experiments. Various changes like change in the number of hours in a work week, number of hours in a work day, number of breaks, lunch timings, etc. were planned and informed to the girls. The findings took the researchers by surprise, since irrespective of the changes made, there was an overall increase in productivity. They realized that since the girls were given a great deal of freedom, they had formed an informal group including the observer. The researchers thus discovered the concept of informal organization. They found that workplaces were social environments and that there were factors other than just economic self-interest. An important conclusion drawn was that every aspect of an industrial work environment had a social value.
In the Interview phase, all the employees in the Hawthorne plant were interviewed. Many generalizations were observed and noted down, notably the social aspects.
The Bank wiring observation room experiments led to the observation that Group acceptance appeared to be more important to the worker than money. The participants lack of trust in the objectives of the project made them restrict the production of the group members by preventing them from producing beyond a certain number of units, ignoring the additional monetary benefits promised to them. Other reasons were noted as fear of unemployment, aim to protect slow workers, apprehension of management raising the standards and a complacent attitude of the management.
Many believe that the production increase in the relay room was due to the fact that the participants received more attention and it was altogether a new experience for them. This was termed as the 'Hawthorne effect.' The Hawthorne Studies thus laid the foundation for the Human Relations Movemebr and was responsible for the development of various concepts like participatory management, team building, etc.
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