CHAPTER 2

FOUNDATION OF HUMAN RELATIONS AND

ORGANIZATIONAL BEHAVIOR

Presented by: Pushpa Kataria

 Introduction

Objectives of organization:
 To maximize profits

 To produce goods and services of good

quality
 To compete with other players in the

industry
 Welfare

 Efficient use of resources

 Definition
Human Relations:
“Motivating people in organizational settings to develop teamwork
which accomplishes individual as well as organizational goals
effectively.
- Keith Davis

Organizational Behavior:
 “OB is the field of study that investigates the impact that
individuals, groups and structure have on behavior within
organizations for the purpose of applying such knowledge
toward improving an organization’s effectiveness.”
 Historical Development of Human
Relations and Organizational
Behavior
 Scientific Management Movement
 Research Studies
 Other Developments
 Interdisplinary Studies
 The Mature Outlook
Scientific Management Movement:

F.W Taylor: his studies helped to improve

the working conditions of industrial
workers and was instrumental in
enhancing the productivity of the workers.
He laid stress on the division of labor and
scientific selection, placement and training
of workers.
 Research Studies
 In 1920 and 30s Elton Mayo and F.J
Roethlisberger conducted industrial experiments
at Hawthorne plant of Western Electric Company
 Their studies brought out a positive correlation
between productivity and worker participation.
 The findings helped managers understand
people’s behavior at work and the significance of
human relations in work settings.
 Other Developments
 Concepts like Paternalism and welfare
management developed, personal departments
were created, a professional approach was
adopted.
 Revival of militant unionism triggered worker’s
interest in business activities of the org.
 World war II gave impetus to HR movement.
Many behavioral scientist took extensive studies
to improve business.
 Interdisciplinary Studies
 Organization like ATIRA( Ahmedabad
Textiles Industrial Research Association)
and SITRA, SRC (Shri Ram Center for
Industrial Relations) was established for
research studies on social and
psychological problems of industrial
workers.
 The Mature Outlook
The study of OB at the University level
added maturity to Org. practices. “Human
side of Enterprise” – D McGregor
highlighted mature outlook towards
Human Relations and OB.
The Emergence of Human Relations
and Organizational Behavior
 Contributing disciplines to the OB field:
 Psychology
 Sociology
 Social psychology
 Industrial psychology
 Sociology
 Economics
 Anthropology
 Political Science
 ……….continues
1. Psychology: Science that seeks to measure,
explain and sometimes change the behavior of
human. Study of individual behavior.
2. Social Psychology: Blend of psychology and
sociology that focuses on the influence of
people on one another.
3. Industrial Psychology: applies the principles
and theories of psychology to the industrial
context.
Sociology: scientific study of the nature and
development of society and social
behavior. Study of people in relation to
their fellow human beings.
5. Anthropology: involves the study of
mankind, especially of its origin,
development, customs and beliefs.
6. Economics: Science of production,
distribution and consumption of goods and
services.
7. Political science: involves the study of
individual and group behavior within a
particular political environment.
 Significance of HR and OB
 Development of Skill
 Organizational performance: Equations by Keith
Davis
Knowledge * Skill= Ability
Attitude * Situation= Motivation
Ability * Motivation= Potential performance
Human performance * Resources=
Organizational performance
 Development of skills
 Human resources can b defined as the sum of the
inherent abilities, acquired knowledge and skills.
 Talent & skills can be honed by training, motivation &
provision of opportunities for education & development.
 Managers should spend ample of time in understanding
in improving interpersonal relations & direct the
employees to improve their performance.
 Therefore HR & OB make significant contributions
toward effective management of organizations.
 Hawthorne Studies
Hawthorne Works of the General Electric
Company, Chicago employed around 30,000
workers and manufactured equipment for Bell
Telephone System
The Company requested then National Academy of
Sciences to help.
The academy conducted illumination experiments
to find the relationship between worker
efficiency and level of illumination in the
workshop.
 The Illumination experiments
 Relay Assembly room experiments
 Feedback Mechanism
 Interview Phase
 Bank wiring Observation room
experiments
 The Illumination Experiments
 Modified the level of illumination-intensity
of light, to determine its effect on
productivity.
 Two groups were selected-the control
group & the experimental group
 Illumination was not changed for control
group throughout the course of the
experiments, while it was changed
constantly for the experimental group.
 When illumination was enhanced for
experimental group, its productivity increased.
but productivity for control group also increased
despite no change in the in its illumination level.
 Then the researchers lowered the level for
control group. But surprisingly the productivity
still shot up. These experiments showed
productivity was influenced by some other
variable.
 Relay Assembly Room
Experiments
 Conducted by Elton Mayo & his team.
 Six group of girls were selected they have
to assemble telephone relays.
 The rate of production was determined by
counting the relays that were dropped in
the chute.
 The researchers noted the basic rate of
production by introducing & modifying
certain variables.
 Findings of the relay assembly
room experiments
 The findings of the experiments were
surprising.
 Formation of informal group including
observer had a positive effect.
 They were engaged in social meetings,
introduced social environments.
 They were factors other than economic
self-interest, aspect of social value
emerged
 Feedback mechanism
 The observer kept a record of all that is happening and
also obtained the feedback from these girls. Many
changes were introduced:
 Girls produced 2400 relays in 48hr of 6 weeks without
any break & rest pauses.
 For a period of 8 weeks girls were paid on piece rate, it
resulted in an increase in productivity.
 2-5 min rest pauses in morning & evening were given. It
resulted increase in productivity.
 Rest pause increased to 10 min , productivity led to
sharp increase.
 Rest pauses were increased to 6 min, there was a slight
decline in productivity.
 The original working conditions of 6 days,
48 hr week was restored. All amenities like
rest pauses, hot meal, piece work wages
were withdrawn. the girls worked in these
conditions for 12 weeks & achieved the
output level of avg 3000 relays per week
which was highest ever recorded for the
group.
 The productivity went up because the 6
girls had formed a close knit group & gave
their full cooperation for experiment.
 Had job satisfaction as not being
supervised, had medical checkups,
absenteeism declined by 80%.
 Girls did not followed only one method in
assembling the components.
 Findings of relay assembly room
experiments
 The findings of the experiments took the
researchers by surprise.
 Even though the girls worked for longer hr
without amenities, still productivity increased
which was against Taylor's theory.
 Girls had informal group, jovial time, friendly
observer. therefore the supervisor able to secure
whole hearted cooperation in spite of withdrawal
of facilities.
 Interview phase
 Nearly 21000 employees were interviewed in
the Hawthorne plant. the generalization drawn
were:
1. A complaint is not necessarily an objective
recital of facts
2. The social org. of the company represents a
system of values from which the worker
derives satisfaction & dissatisfaction according
to his perception.
 Bank wiring observation room
experiments
 Conducted to understand the power of 8informal group
& peer pressure on workers productivity.
 A group of 14 men were engaged in bank wiring.
 This time no changes were made in physical conditions
& were paid on incentive pay plan. surprisingly the
output remained at a fairly constant level.
 They did not behave like economic man model. the
participants lack of trust, the fear of unemployment
were the conclusion.
 Therefore Hawthorne studies laid foundation for human
behavior & came out with participatory management,
team building.
Theory X and Theory Y: Douglas McGregor

• The Human Side of Enterprise (1960, 1985)

• To understand human behavior, one must

discover the theoretical assumptions upon

which behavior is based
• Especially interested in the behavior of

managers toward workers

FOCUS: Manager’s assumptions about
human nature
 Theory X
 Three Assumptions
 The average human being has an inherent
dislike of work and will avoid it.
 Most people must be coerced, controlled,
directed, and threatened with punishment
 The average human being prefers to be
directed, wishes to avoid responsibility,
has relatively little ambition, wants
security.
Theory Y- Human Relations Theory
 Physical and mental effort in work is similar
to play / rest.
 External control and the threat of
punishment are not the only strategies
 Tight controls and punishment cannot
make people deliver the goods
 People can solve their work- related
problems by using creativity and
imagination.
 THEORY Z
 Propounded by William Ouchi

 Combiningboth American and

Japanese management practices.
 Differences in the management styles of
Japanese and American Organizations
 Lifetime  Short term
employment employment
 Slow promotion  Fast promotion
 No specialization  Specialization
 Collective decision  Individual decision
 Social concern  Employee’s
concern