Human Relations Movement according to Fred Luthans

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Role of Human Relations in Management:

According to Fred Luthans, the three events that took place that caused the rise of the role of human relations in management; the three events are:

The Great Depression:

The great depression of 1929 was caused by overproduction without adequate marketing, finance, and proper personnel. Overproduction of goods resulted in unemployment, discontent and insecurity, and managers realized that these are important parameters faced in business. New managers became more conscious of these factors and started incorporating them into their management planning processes. Thus, human relations developed significantly.

Rise of Trade Unionism:

Trade unions have increased in power and strength over the years. In the US, trade unions have existed since 1792, but were only recognized after the passage of the Wagner Act of 1935. Similarly, trade unions have existed in India since the latter half of the 19th century, but have only been recognized after the passage of the Trade Union Act of 1926. Modern trade unions influence industrial management to a great extent, and a way to establish better relations with trade unions is to have a strong human relations department.

Hawthorne Experiments:

These were a series of experiments done at the Western Electric Company based in Chicago, USA. The experiments involved changing the work environment of workers, and studying the effects on morale, attitude, productivity and efficiency of workers. These were the experiments:

Illumination experiment: 1924-1927:

Illumination in the control group remained the same but was increased in the experimental group. Surprisingly, productivity of both the experimental and control group increased. Then, illumination of the experimental group was decreased, again, the productivity of both the experimental and control group increased. It was concluded that there was something else causing the increase in productivity in both the situations.

Relay Room Experiments: 1927 to 1932:

A group of six girls were employed in an experimental environment and studied for five years. The girls were asked to assemble telephone relays. With normal working conditions of 48 hours per week, the girls produced 2400 relays per week. Next, a series of breaks were introduced and productivity increased sharply. When too many breaks were introduced, productivity didn't increase as the girls complained their work-pattern was perturbed. Furthermore, a free meal was provided by the company and productivity increased sharply. Soon after, however, the girls were placed back on their original schedule of 48 hours per week with no free meals, no breaks. Productivity jumped high because of the change in the girls' attitudes toward their jobs. This was because the girls were given flexibility at work by soliciting assistance and cooperation. This increased productivity.

Second Relay Room and Mica Splitting test room experiments:

The experimental group of five workers was required to assemble telephone relays, just like other workers, however, under different conditions. This group was engaged on a different small group piece rate scheme, which drove productivity up 12%.

The Mica Splitting study was similar in conditions to the relay room test study, except that the workers were based under their regular piece rate plan rather than small group incentive in the relay room. Productivity increased 15% over a period of 14 months.

It was concluded that the wage incentive wasn't alone to increase workers' productivity.

Mass Interviewing Program:

About 21,000 interviews were carried out between 1928 and 1930. The objective was to extract information to improve supervisory studies. However, the method irritated the employees or caused them to reply in oversimplified "yes" and "no" answers. It was more fruitful to make the employee talk more and vent out their concerns, and this raised the employee's morale. Job complaints were no longer useful. Workers made better decisions based upon their experiences both inside and outside the company. The social status of an employee within a company was an indicator of his/her satisfaction level.

Bank wiring room study:

Fourteen men were involved in the bank wiring room. The work required soldering two wires for telephone parts. The experiments were carried out by two personnel: one interviewer and one observer. The observer sat in the wiring room and was accepted as a regular member. The interview appeared as an outsider and spent time interviewing individual workers. It was noted that the workers produced an output slightly below the required number because it was part of the group norm. It was concluded that social norms created by the group were more important than financial incentives.


From the Hawthorne studies, it can be concluded that productivity can only be increased through greatly motivating and equipping workers with positive attitudes instead of financial incentives alone.

Additional Readings:

1. Human Relations Movement according to Fred Luthans
2. Definition of Organization Behavior
3. Fundamental Concepts of Organizational Behavior
4. Unconscious Behavior and Sigmund Freud
5. Mechanics of Defense Mechanisms
6. Content and Process, and Abraham Maslow's Need-Hierarchy Theory
7. Theory of motivation by Herzberg
8. Definition of Morale
9. Ego States
10. Determinants of Personality
11. Definition of Perception
12. Attitude, Belief, and Ideology
13. Stress and State of Exhaustion
14. Leadership and Leadership Styles
15. Path-Goal Leadership

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