As a small business owner, executive, or manager, you no doubt have a To-Do list that includes keeping your hard-working staff motivated, engaged and content.
Human relations management theory is a workplace motivation theory developed by psychologist Elton Mayo that argues employee performance improves when you address social and psychological needs, not just pay, tasks, and supervision. You have, no doubt, made reasonable attempts at trying to get your team motivated. Perhaps you attempted various tactics to inspire them or to get them to buy into your level of passion. When nothing delivers the results you expected, and things remain unchanged, it can be demotivating for you.
Many management theories have been developed to explain this problem. Human relations management was studied and published in the 20th century in Mayo’s Human Relations Motivation Theory, including the Hawthorne Effect as the core of the theory. This article explains the basics of the theory, how it developed, the key Elton Mayo experiments behind it, its main conclusions and criticisms, and where it sits among other major management theories.
From this human relations approach, the phrase “a happy worker is an efficient worker” was born. It proposes that if a business has happy staff, it will experience greater productivity and more profit. This is not to the exclusion of reasonable pay and other benefits. If an employee believes they are receiving all the benefits that they deserve from the organisation, they will have a sense of being appreciated and of belonging. According to the theory, they will protect this status by doing their utmost to lift the organisation up in the market.
What is the human relations management theory?
A human relations management theory is a motivation theory or research-based tool that aims to raise employee performances via a holistic approach that considers the individual.
Professor Elton Mayo’s studies were revolutionary at the time. It was published in the age of science and machines, so “soft and fluffy” feelings were contrary to the “stiff upper lip with a good dose of science” attitude of the day.
Scientific Management Theory
At that time, the theory du-jour for workplace productivity was titled Scientific Management by Frederick Taylor. This theory assumed workers were generally lazy, prioritised efficiency through economic incentives and physical working conditions, and stood in clear contrast to Human Relations Theory’s later emphasis on social and psychological factors. Workers were treated as a disposable component and were deemed too unsophisticated to be primarily motivated by anything other than money.
Frederick Taylor was a successful engineer, and thus work and productivity was reduced to scientifically adjustable components. He discounted any influence from the needs of human nature.
Motivation Theory
Elton Mayo’s Motivation Theory, containing the Hawthorne Effect, was on the complete opposite end of the spectrum. It was a disruptor theory and led to the establishment of the Human Relations School of thought.
The human relations movement emerged in the early twentieth century. At its core, this theory emphasises human relations principles and the role of employee motivation, pushing business executives to take more interest in the human needs of their employees. It proposed that job performance was affected by many factors, including social and psychological factors, interpersonal relationships, social relationships, and job content.
This was the first time that worker productivity was linked primarily to employee satisfaction in work situations, recognising employees as human and social beings.
Who was Elton Mayo, and how did he come about this theory?
Born in Australia in 1880, Professor Mayo, an Australian psychologist in Harvard University’s Industrial Research department, worked there from 1926-1949. His work helped shape effective management by focusing on employees within the broader work environment. His Hawthorne Studies and his book, The Human Problems of an Industrial Civilisation, were already known in global academic circles.
The Hawthorne Studies
The Hawthorne Studies were revolutionary for their time and resulted from research conducted at the Hawthorne Plant of the Western Electric Company in Cicero, Illinois. There were approximately 40, 000 employees.
The published study was extracted from large data sets collated from multiple groups of productivity studies, and the Hawthorne studies occurred from 1924 to 1932. The inaugural study sought to measure how lighting affected output, but later findings suggested social and psychological influences mattered more than environmental factors.
Two groups of volunteers, from employees, were used as a control group and a group with improved lighting conditions. The outcome showed overwhelmingly that productivity improved for the group with better lighting conditions.
You would think that was a conclusive outcome.
Not so! The spanner in the works was that productivity improved in the control group as well. This flummoxed Professor Mayo and became even more discombobulating than that! When lighting was reduced, productivity also increased. And further, each change, either increased or decreased light, also produced increased employee satisfaction!
The insightful Professor Mayo concluded that the worker is not a machine. He also concluded that concern for employee well-being, positive treatment, and genuine recognition through positive feedback helped strengthen workplace relationships, which in turn improved employee productivity. He also recognised that the need for comradery and recognition was addressed albeit not planned, i.e. the sense of belonging.
Synopsis: good psychological conditions = good productivity outcomes.
The development of the Human Relations theory
This theory was the antithesis of classical management schooling, which neglected the human side and under-valued the socio-psychological aspect of employees.
Professor Mayo’s observations also framed the workplace as a social system, not just a set of tasks, and noted that work satisfaction was affected by the informal social pattern of the workgroup. Informal work groups, social networks, and social interactions significantly shape employee attitudes and group behaviour. The astute business executive will understand how these social structures influence workplace culture and can support increased productivity.
Human relations experiments done by Mayo:
Illumination Experiment: The physiological aspects relating to work were changed, but no direct relationship was shown. It did show that productivity is not only physiological but is also influenced by social factors.
Relay Assembly Test Room Experiment: The relationship between working conditions and morale was analysed. Changes were made to incentives, rest periods, work conditions etc., but no improvement in productivity occurred.
Mass Interviewing Programme: A large number of workers were interviewed on work-life perceptions. The importance of informal relations, workplace relationships, and the interpersonal aspects of social and psychological needs were noted as impacting on motivation.
Bank Wiring Experiment: Social cohesion among the employees became evident, showing how each social group developed norms and how group dynamics shaped output.
Human relations management theory conclusions
A workplace is a techno-economic unit and a psycho-social organisation; in human relations management theory, it is also understood as a social system.
Workers spontaneously form small informal groups, with the norms and values of each group significantly influencing group behaviour and the decision making processes of the employees within that group.
Work physical conditions impact the workers’ morale and productivity. However, the interpersonal relations, attitude of the supervisors, and other social/psychological factors were far more impactful, especially when open communication channels and effective communication foster trust and reduce misunderstandings.
Employees mostly act or react as members of a group, not individuals, so managers should involve employees through participative management and support better decision making.
Employees respond to the holistic work situation, and autonomy around a specific task, when paired with team structure and organisational goals, can improve productivity.
The informal leaders strongly influence the setting and enforcing of group norms.
Executives and business owners must understand and acknowledge the group relations, as this is an essential part of effective management.
Criticisms received against the Human relations management theory
Critics argued the research lacks scientific validity.
The behaviour of the workers during the experiments was not natural. It was actually the Hawthorne effect that gives their best due to being observed.
It is pro-management and anti-union.
Insufficient attention was given to the formal relation, and large emphasis was placed on informal relations.
It was not aware of the economic dimension and neglected work types.
It could not explore the multidimensional phenomenon of human motivation.
Marxists say that it is a new technique to exploit workers by de-emphasising economic factors.
It is over-concerned with happiness.
Conflict is not acknowledged as a creative force, and critics said the theory underplayed conflict resolution and conflict resolution managing individuals with different goals or views.
It ignored the impact of workers’ attitudes, even though strong conflict resolution skills are important for team work.
What are the 5 main management theories?
Managing a team is so much more than giving instructions and cheering from the sideline. You need to appeal to your staff by potentially using a combination of methods. Most employees of today enjoy vastly improved management styles.
Which management theories can an executive and small business owner draw upon:
1. Henri Fayol’s theory – Administrative
Fayol’s research led to 6 functions of management which work through 14 management principles. Some core ideas still live on today, but you will rarely find a workplace following all 14 principles.
The six functions are:
Forecasting
Planning
Organising
Commanding
Coordinating
Controlling
2. Max Weber’s theory – Bureaucratic
The bureaucratic theory states an organisation that utilises a bureaucratic structure will be efficient. It proposes using standard rules and procedures to organise itself, especially effective for large operations.
The theory includes the following five principles:
Task specialisation
Hierarchy
Formal selection
Rules and requirements
Impersonal
3. Elton Mayo’s theory – Human relations
This theory emphasises relationships, proposing that better workplace relationships can drive productivity when people feel like they are part of a team and valued by their co-workers and bosses.
It proposes praise and teamwork as motivational factors – the opposite of the bureaucratic theory – and employee recognition increases motivation by 69%, which can strengthen employee morale. Many organisations apply these ideas through mental health, work-life balance, and professional development initiatives. These practices support employee retention, and high employee well-being correlates with increased productivity and reduced turnover while aligning with human resources strategy.
Emphasising personal factors is beneficial, but there can be too much of a good thing. It must be balanced with guiding parameters to avoid office romances and biased promotions.
A combination of bureaucratic theory and human relations theory might be advantageous.
4. Ludwig von Bertalanffy’s theory – Systemic
This theory believes that each business is a system, like a living organism, needing numerous actions to keep everything moving forward, i.e. a business needs more than just a CEO to survive.
Everything needs to work together for a business to succeed.
5. Douglas McGregor’s theory – Employee types
This X&Y theory assumes there are two types of workers:
X employees lack ambition and drive, thus require micro-management.
Y employees enjoy work and strive for self-fulfilment, and the right management style can support autonomy and motivation on a personal level.
Short in person conversations also help managers in providing context and tailoring support to different employees.
These are extreme, polar views. Employees don’t need micromanaging but do need some discipline and rules generally. There should be a middle ground for implementing this theory.
As a small business owner, executive, or manager, you no doubt have a To-Do list that includes keeping your hard-working staff motivated, engaged and content.
Human relations management theory is a workplace motivation theory developed by psychologist Elton Mayo that argues employee performance improves when you address social and psychological needs, not just pay, tasks, and supervision. You have, no doubt, made reasonable attempts at trying to get your team motivated. Perhaps you attempted various tactics to inspire them or to get them to buy into your level of passion. When nothing delivers the results you expected, and things remain unchanged, it can be demotivating for you.
Many management theories have been developed to explain this problem. Human relations management was studied and published in the 20th century in Mayo’s Human Relations Motivation Theory, including the Hawthorne Effect as the core of the theory. This article explains the basics of the theory, how it developed, the key Elton Mayo experiments behind it, its main conclusions and criticisms, and where it sits among other major management theories.
From this human relations approach, the phrase “a happy worker is an efficient worker” was born. It proposes that if a business has happy staff, it will experience greater productivity and more profit. This is not to the exclusion of reasonable pay and other benefits. If an employee believes they are receiving all the benefits that they deserve from the organisation, they will have a sense of being appreciated and of belonging. According to the theory, they will protect this status by doing their utmost to lift the organisation up in the market.
