Neo- Classical Theory
Neo- classical theory is also referred to as behavioral scienceapproach to modifying and
improving the classical theory. While classical theories focused more on structure and physical
aspects of the worker and Neo-classical theory gives importance to human and social aspects of
the worker and his relations in the organization.
The neo-classical theory is based on the Hawthrone experiments. Elton Mayo conducted the
Hawthrone experiments at Hawthron plant of General Electronic Company (GEC) between 1927
and 1993 at Chicago with 30,000 workers. The Hawthron plant was manufacturing telephone
system bell. The objective of the experiment was to find out the behavior and attitude of workers
at workplace under better working conditions. In the company, when management provide the
benefits of medical allowance and pension with recreational facilities. Even thought workers get
all facilities but the productivity was not up to expectation. So, in 1924, the professor Elton
Mayo and his research team investigate the reasons for dissatisfaction of employees and decrease
in productivity.
Four Phase of Hawthrone experiments:
Prof. Elton Mayo and his team conducted researches in four phases.
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Illumination experiments (1924 – 1927)
Relay assembly room experiments (1927 – 1928)
Mass interviewing programme (1928 -1930)
Bank wiring room study (1931 – 1932)
Result of Hawthrone Experiments:
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Motivation: Employees are not motivated by only money (bonus scheme and incentive).
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Communication: communication helps the management and employees to have better
mutual understanding. Through proper communication, management can easily identified the
problem faced by its employees and can easily solve out.
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Social factors: Social factors are responsible for deciding the level of output.
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Behavior of workers: workers are not as individual identity but as members of a group in
an organization and they have their own norms and beliefs. Workers behavior depends upon his
mental level and emotions. Workers began to influence their group behavior towards
management.
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Relationship: Employees do not like order and command. They preferred to maintain
amicable relationship with their co-workers. They want co-operative attitude from their
superiors.
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Production level: Teamwork and Group psychology increases productivity.
Criticism of Hawthrone Experiments:
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Hawthrone experiment was not conducted scientifically.
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In the experiment, various format and structure are not feasible.
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Eltone Mayo gives more importance to human aspect and ignoring other important
aspects.
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Group conflict is prevalent in an organization.
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Hawthrone experiment did not give any recognition to the forces which are responsible
for productivity in the organization.
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During experiment, Eltone Mayo has assumed that a satisfied employee would be
productive. But the finding was different. There is no link between working condition and
productivity.