Employee retention is one of the main challenges for any organization; you may call it employee turnover, you may call it attrition, or churn, it is a big challenge for organization to retain talent. When talented and experienced people quit organizations, it puts a big strain on the productivity by affecting organization’s bottom line. To solve the employee retention problem, you must first understand the challenges involved.

With young professionals getting increasingly restless the challenge is not only to retain them but also to identify the future leaders among this talent pool. For example,  L&T is facing the crisis of identifying  the next line of leaders. Recently, the company increased the retirement age for CMD from 65 years to 70 years and 62 to 67 years for the other directors. According to a former employee, earlier a person would reach the level of DGM and at the most AGM level at the time of retirement.

Recruitment is a business function that requires business objectives, perspective, expertise, and the ability to find the right match that fits the running position. The hiring manager makes the final decision on who gets hired, while the recruiter manages the process, laying the foundation for hiring the right people. Any organization’s HR role is to convince the prospect with diplomacy and marketing skills and align the recruitment procedure to benefit the organization for a longer period. During the recruitment process, it is hard to grab the ideal candidate’s attention because the good ones are getting multiple offers simultaneously, there is a shortage of wholly qualified candidates the ones who are ready to take on the job.

With social media doing the searching of candidates which is shared by many other organizations tracking the success rate of recruitment has become very difficult.  Organizations take time making a candidate go through multiple stages. Multiple stages of screening make it difficult for employers to close the position. Developing a data-driven mindset for hiring for various positions is a major challenge faced in talent acquisition.

Why 80,000 employees leave Infosys between January and March 2022? Top reason is salary. Infosys didn’t bother to provide enough salary hikes to its employees who started looking for opportunities elsewhere.  It led to the ‘Big Quit.’ The world today is experiencing the era of the ‘Big Quit’ or the ‘Great Resignation’. There are  organizations paying better salaries but are experiencing Big Quit.

Companies often struggle to retain talent due to various reasons. Common pitfalls include inadequate career development, lack of recognition, and not addressing work-life balance. Understanding and tackling these issues can help businesses keep their valuable employees.

Anand Mahindra advocated for liberal arts, stressed work quality over hours, by cheekily countering L&T chief’s 90-hour work week remark. Mahindra Group Chairman Anand Mahindra has once again captured attention with his thoughts on liberal arts education and work-life balance. Mahindra gives importance to a person’s work-life balance. Work-life balance is a key part of a healthy and productive work environment. An individual who achieves this balance successfully is ready to dedicate an equal amount of time to work-related tasks and personal matters without experiencing stress.

Speaking at an event, Mahindra passionately advocated for the importance of arts and culture in professional decision-making.  “Even if you’re an engineer or an MBA, you must study arts and culture,” he said, highlighting the role of a well-rounded education. “We support art and culture because I believe it helps make better decisions by engaging the whole brain.” Mahindra stressed that understanding arts and culture enhances decision-making. “If you’re not spending time at home, with friends, or reading, how will you bring the right inputs to your decisions?” he questioned.

Talent retention is the process of keeping your best employees from leaving. Companies need to have a strategy to retain their top talent, as losing talented employees can be costly and disruptive. One study identifies that career growth, workplace well-being, competition within the industry, globalisation and the new employment landscape are the challenges of talent retention. Employees often cite a lack of career growth opportunities as one of the main reasons for leaving their jobs. Besides, lack of work-life balance, feeling unappreciated, low pay, and lack of work culture fit are other reasons that contribute to attrition. The attrition rate is increasing even more due to unknown reasons in a post-pandemic world. 

The pandemic has made almost everyone travel back to their home / native places. And this has made the employees preferring the hybrid work culture. People like to stay home and work for a few hours. This helps them to balance their work-life time. Moreover, the hectic daily commute is saved on a large scale. So, the productivity level is retained, and many resources are saved. That’s why many employees are preferring the hybrid or remote work module, these days. 

Many people have found that flexible working hours are vital for ensuring work-life balance. Hence, instead of a fixed time, employees prefer to switch to flexible working hours. If the company is not allowing flexible hours, employees are preferring to switch the company rather. Another fact is, during the lockdown, many people found an alternative way to earn through their hobbies or skills. Social media platforms and online opportunities opened many doors of revenue for people around the world. And people are exploring many new entrepreneurship opportunities.

The COVID-19 pandemic brought on high levels of upheaval and introspection, causing people to re-examine their priorities. In a new Indeed survey of 1,005 people who voluntarily resigned from at least two jobs since March 2020, 92% said the pandemic made them feel life is too short to stay in a job they weren’t passionate about. 

People have become more aware of the social impacts and thus started working on social causes. Having migrated to their hometown, many people have found a way to earn through agriculture and have shifted their focus to agriculture. Hence, such people also prefer the work from the home module. 

Despite its financial success, Reliance Industries faces a persistent issue: high employee turnover. The biggest shortcoming employees face in Reliance is in areas such as work-life balance, career development, and work environment. While competitive salaries fail to retain talent, solutions lie in increasing employee engagement, empowering employees, and cultivating a positive culture. Reliance needs to address employee retention issues and secure a more loyal workforce. By focusing on employee well-being and career development, Reliance can maintain its position as a top employer while reaping the benefits of a stable and dedicated workforce.

Hindustan Unilever Ltd. (HUL) faced challenges in meeting changing employee expectations. As competition and demands increased, HUL fell from being the top dream employer. Younger employees expected quicker career growth and more flexible work arrangements than HUL’s traditional model provided. Another big reason for quitting multiple jobs among the younger generations is they want instant gratification, they expect a pat on back plus rise in salary, plus promotion all of this instantly.

Conclusion

Employers should ensure a happy work environment if they want to retain their employees.  This will help in creating client delight, sustaining the current projects, acquiring new clients, business growth and business expansion. Accept new norms, flexibility for all the employees, build a vision for all employees – visualise the growth path in the company, motivate employees to do better. Certainly, monetary benefits play a major role in retaining employees. But organisations surely can bring new cultures and vibrancy to the work environment to retain employees. 

In Human Resource Management employee motivation is very important because it enhances the level of commitment, energy and innovation. The job of HR is strategic in nature because it addresses the issues related to people. Human mind is most complex and working with minds continually is a tedious and time-consuming process. HR needs to measure employee wellbeing by measuring their motivation.

Here below are some of the famous motivation theories:

Abraham Maslow’s need hierarchy

Abraham Harold Maslow was an American psychologist. He developed a model of hierarchy of needs to explain human motivation. His theory proposed that people have a number of basic needs that must be met before people move up the hierarchy to pursue more social, emotional, and self-actualizing needs. The pyramid of needs is explained as below:

Physiological Needs

The theory generally is portrayed as a fairly rigid hierarchy in shape of pyramid. The physiological needs are at base which include food, water, clothing, sleep, shelter and reproduction. These are the basic necessities for any individual’s survival.

Safety Needs

After physiological needs come Safety Needs. These include protection from bad elements in society, security, law and order, stability, strength and freedom from fear. Once a person’s basic needs are satisfied, he requires safety and security as want for order and predictability sets in.

Social Needs

These include friendship, family, friend’s circle, memberships of various groups and clubs, work group, educational qualifications, salary, community belonging etc, in short, each person seeks affiliation in society. 

Esteem needs

This category includes achievement, mastery, independence, status, dominance, prestige, self-respect, and respect from others.

Self-Actualization needs

This is at the peak of need pyramid. This includes realizing personal potential, self-fulfilment, seeking personal growth and peak experiences.

Maslow felt that there was a clear distinction between gaining love and gaining respect or esteem. He felt that people get respected for their exceptionality and mastery. As individuals, we naturally wish to excel or be exceptional, to be noticed for our unique talents and capabilities. Each one has some measure of self-esteem and confidence; at some point in time, we try to raise the bar of our performance, and once we achieve mastery, we automatically gain the psychological freedom to be creative and grow further. The growth gives us wisdom and the wisdom make us generous to others for sharing our mastery.

Maslow noted that the order in which these needs are fulfilled need not always follow this standard of succession. For example, for some individuals, the need for self-esteem is more important than the need for safety.  Another fact is age, race, cast, creed, gender, height, weight, money, status has got nothing to do with the order of achieving each need.

Many other motivation theories are born out of Maslow’s Need Pyramid Theory.

Alderfer’s ERG theory

Clayton Paul Alderfer was an American psychologist and HR consultant known for additionally developing Maslow’s hierarchy of needs. Alderfer’s ERG theory of 1969 condenses Maslow’s five human needs into three categories: Existence, Relatedness and Growth. All three include material and physiological desires. 

Existence needs

These include need for basic material necessities. In short, it includes an individual’s physiological and physical safety needs. Housing, clothing, food, health are the needs for basic existence.  Maslow’s physiological and safety needs fall under this category.

Relatedness needs

These include the individual’ ambition to maintain significant interpersonal relationships. We all feel the need of belonging to individuals and groups in our personal and professional lives. We all try to maintain relationships with significant others like family, friends, co-workers and employers. We like to cherish social esteem. This means to be recognized and feel secure as part of a club, social organization, group and our extended family. Getting public fame and recognition nourishes our self-worth.  Maslow’s social needs and esteem needs fall under this class of need.

Growth needs

These include need for self-development. Growth need refers to the necessity for personal growth and self-discovery which a person continues throughout his life. For Maslow, a person is always ‘becoming’ ‘developing.’ A person never remains static. At every stage of life person grows mentally and physically.  The realization or fulfilment of one’s talents and potentials and fulfilment of those is called self-actualization.

McClelland’s achievement motivation theory

David McClelland’s Human Motivation Theory helps to identify motivating drivers of people. This helps to praise them and give feedback effectively. McClelland states that every person has one of the three main driving motivators: the needs for achievement, the need for affiliation and the need for power. These motivators are not inherent, we develop them through our culture and life experiences. Each person is motivated by either one of these motivators – power, affiliation and achievement. In each person, one of these drivers is usually more dominant, but the others are present.

Power

If an individual’s predominant motive is power, they are motivated to influence others and take control. Power must not be perceived negatively, when it is pursued for the right reason, it is found tremendously powerful.  McClelland found that power-motivated individuals were best suited for leadership positions within a company. If they were able to effectively delegate tasks in the workforce, they were often able to be successful leaders. 

While history has seen some power-hungry rulers such as Joseph Stalin, Adolf Hitler, Pol Pot and Idi Amin who used their power for cruelty we also have examples of some good leaders such as Subhash Chandra Bose, Nelson Mandela, M.K.Gandhi and presently Narendra Modi.    

Leaders enjoy power when they possess ability to influence others. Power is required for attaining organizational and institutional goals. Power is a doble-edged sword if not used properly, it destroys organizations.

Achievement

If an individual’s predominant motive is achievement, he will be satisfied only after achieving. Achievement-oriented individuals change the situation or the location when they want to. When achievement becomes need of a person, he/she chases the achievement.  Such individuals do not like working in groups because they do not like having limited control over the outcome. Instead, they prefer to do work where the results are clear and visible. Successful entrepreneurs are achievement-oriented. They value accomplishment and the intrinsic rewards that go along with achieving difficult goals. It is a strong motivator for most business owners. Some excellent examples of achievement-oriented people are M.S.Dhoni, Sachin Tendulkar, Amitabh Bachchan, Dhirubhai Ambani, G.D.Birla, Azim Premji etc.

Affiliation

If an individual’s predominant desire is affiliation, they are essentially motivated by social connections. The need for affiliation itself as an emotional drive towards being liked and accepted. Individuals with a high need for affiliation desire having agreeable and collaborative working relationships with others and a pleasant social environment.

People who have a strong drive for affiliation, are ready to fit in a group by hook or by crook. Belonging to others is a primary human need.  They are flexible they try to please others. They value their relationships in life the most. These individuals appreciate familiar situations and familiarity everywhere in life. They are unlikely to leave their work location. They also do not like working alone and try to avoid disappointing their co-workers and managers at all costs. Even though affiliation-motivated individuals work well in a team, they are often not the best employees. They are not motivated to do better as they are contented to stay in their position. There is no drive to improve their employee status or their personal position, which makes them not so effective workers.

Herzberg’s motivation-hygiene theory

Fedrick Herzberg’s behavioural theory is considered as one of the oldest theories that describes job factors which inspire employees. Herzberg was a contemporary of Abraham Maslow who had coined the need pyramid theory. Psychologist Fredrick Herzberg tried to find answer to a most pertinent question in 1950s and 1960s, what people want from their employment, what makes employees satisfied in an organization? He conducted a study by asking people to describe situations in which they felt really good, and really bad, about their jobs. What he found was that people who felt good about their jobs gave very different responses from the people who felt bad. Person to person they varied.

Hygiene factors

These are the job factors which are essential for existence of motivation at workplace. The hygiene factors symbolize the physiological needs which the individuals want and are expected to be fulfilled in their work place. However, these do not lead to positive satisfaction for long-term. Therefore, they are also called dissatisfiers. But, if these factors are not present, they lead to discontent. In other words, hygiene factors are those factors which pacify the employees.  Salaries, fringe benefits, canteen facilities, position, work culture and job security are hygiene factors in a job.

Motivators

The other feature is called motivators or satisfiers. These are linked to employee motivation which arises from built-in or dependent conditions on the job itself. The motivational factors are referred to as self-worth or self-respect. This is an important part of employment for many. Self-esteem is more important for numerous people. A person’s overall sense of self-worth or his personal values adds productivity to his style of working. The motivational factors for gratification include recognition, responsibility, job satisfaction, contests, achievement, opportunities for growth, anything that helps in advancement of career. The realization and fulfilment of one’s talents and potentials help these employees in achieving actualization. Herzberg’s motivators can be described as Maslow’s self-esteem and self-actualization which is an innate drive for some employees. 

Reinforcement theory by B. F. Skinner

Reinforcement theory is a psychological principle suggesting that behaviours are shaped by their consequences, and that individual behaviours can be changed through reinforcement, punishment and extinction.

Behavioral psychologist B.F. Skinner was instrumental in developing modern ideas about reinforcement theory. According to Skinner, a person’s internal needs and drives are not important areas of concern because their current behaviours follow the law of effect and are based on the consequences of past behaviors. This means that behaviors can be altered or manipulated over time.

There are four types of reinforcements: positive reinforcement, negative reinforcement, extinction, and punishment. Positive reinforcement is the application of a positive reinforcers.

Positive reinforcement

one of the key ideas in the reinforcement theory of motivation is that positive reinforcement can with rewards reinforces desired behaviours. For example, appreciating an employee with a certificate, a holiday package, a promotion etc.

Negative reinforcement

Negative reinforcement involves the removal of disgust or aversion of the employee towards his work example is some penalty. This can be done with counselling with mentoring an employee etc.

Punishment

It’s used for maintaining a positive and productive work culture. Example is issuing a warning letter, reprimanding habitual late coming etc.  

Extinction

Extinction reinforcement theory is a strategy in which employees are neither praised nor reprimanded for their work product, behaviour or team interaction. In this management scenario, workers don’t run the risk of workplace humiliation, but they also forego recognition for a job well done.

When a person feels isolated from his/her group of acquaintances, family, friends, society the person feels alienated. The experience of being isolated is dreadful. When a person feels ignored, or left out alone, his enthusiasm and spirit of working drops.  Employees become emotionally separated from others and their own feelings when they feel alienated. Feelings of alienation can happen without the employees or their manager realizing it.

Adams’ equity theory of motivation

Adam’s Equity Theory, also known as the Equity Theory of Motivation, was developed in 1963 by John Stacey Adams, a Belgian psychologist known for workplace behavior. When people exhibit inappropriate behavior in the workplace, everyone suffers. Equity Theory is based on the idea that individuals are motivated by justice. In simple terms, equity theory states that if an individual identifies an inequity between himself and a peer, he automatically will adjust his working style to make the situation fair in his own eyes. As an example of equity theory, if an employee learns that a peer doing exactly the same job as him is earning more money, he may choose to do less work, thus feeling justified in his own eyes.

The structure of equity in the workplace is based on the ratio of inputs to outcomes. Inputs are the contributions made by the employee for the organization. Inputs for instance come in form of the number of hours worked (effort), the commitment shown, the enthusiasm shown, experience brought to the role, personal sacrifices made, responsibilities and duties of the individual in the role. Outputs are the result an individual receives as a result of their inputs to the organization. Some of these benefits will be tangible, such as salary and promotion, but others will be intangible, such as recognition and appreciation. Common outputs include salary, bonus, pension, annual holiday allowance, company car, company home, stock options, recognition, and promotion.

The more appealing and enjoyable the organization culture is, the happier their employees will be. It is not possible for a worker to be genuinely engaged when they are unhappy. Employees keep comparing with each other in regards to salary, perks, recognition and promotion. By cultivating a strong corporate culture, organizations increase the chances of good employee engagement. And, engaged employees are more likely to be great advocates of the organization brand. When organizations maintain rational inputs and outputs, they get clarity in defining equity. Equity is defined as an individual’s outputs divided by that same person’s inputs. Adam’s Equity Theory goes a step further and states that individuals look around and compare their promotions and perks to others in the same industry. If they perceive an inequity then they will adjust their inputs to restore balance.

Vroom’s expectancy theory

Victor Harold Vroom is a business school professor at the Yale School of Management. His expectancy theory of motivation is the belief that an individual chooses to behave in a particular way based on what could bring him the most beneficial outcome. Vroom’s expectancy theory assumes that employee behaviour results from conscious choices to maximize pleasure. Vroom noted through his study that an employee’s performance is based on individual factors such as personality, skills, knowledge, experience and abilities.

Vroom says that an individual’s motivation is affected by how much he is valued in his organization and rewards associated with it. This act is called Valence. Employers must recognize that employees will put efforts which will generate good results which Vroom calls Expectancy.

Valence

Valence refers to the emotional orientation of people with respect to outcomes (rewards). The depth of the want of an employee for extrinsic satisfaction includes money, promotion, time-off, leave benefits etc. For intrinsic satisfaction rewards such as sense of fulfilment, sense of achievement is important. Management must find out what an employee values – extrinsic or intrinsic satisfaction.

Instrumentality

Instrumentality is the perception of employees as to whether they will actually get what they desire. Sometimes the boss promises additional perks or benefits  – often the promises are not fulfilled. Management must ensure that promises made must be fulfilled.

Motivation is a function of valence, instrumentality and expectancy. M = V x I x E

Locke and Latham’s goal-setting theory

Dr Edwin Locke and Dr Gary Latham spent many years researching the theory of goal setting, during the time spent on the research, they identified five elements that need to be in place for individuals to achieve goals.

Clarity, Challenge, Commitment, Feedback and Task Complexity.

Clarity

A clear, measurable goal is more achievable than one that is poorly defined. The most effective goals have a specific timeline for completion.

Challenge

The goal must be little challenging in order to achieve it. If the goal is easily met, it becomes a plain achievement.

Commitment

one needs to put thoughtful effort into meeting a goal. When you share your goal with someone else in order to increase your accountability you will put in efforts to achieve that goal.

Feedback

For achieving a set goal one must learn to take feedback from genuine people from time to time.

Task Complexity

If a goal is especially complex, make sure you give yourself enough time to overcome the learning curve (involved in completing the task. In other words, if a goal is really tough, make sure you give yourself some padding to give you the best chance at succeeding.

Adam’s Equity Theory, also known as the Equity Theory of Motivation, was developed in 1963 by John Stacey Adams, a Belgian psychologist known for workplace behavior. When people exhibit inappropriate behavior in the workplace, everyone suffers. For instance, if someone frequently tells lies, his/her disruptive behavior affects coworkers’ morale and productivity. Equity Theory is based on the idea that individuals are motivated by justice. In simple terms, equity theory states that if an individual identifies an inequity between himself and a peer, he automatically will adjust his working style to make the situation fair in his own eyes. As an example of equity theory, if an employee learns that a peer doing exactly the same job as him is earning more money, he may choose to do less work, thus feeling justified in his own eyes.

Equity theory focuses on influencing whether the distribution of resources is fair to both relational partners – the employer and employee. Equity is measured by comparing the ratio of contributions in terms of costs and benefits in terms of rewards for each person. This theory is also considered as one of the justice theories. John Adams asserted that employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the professed inputs and compare them to outcomes of others. According to Equity Theory, organizations must maximize individuals’ rewards, by creating systems where resources can be fairly divided amongst members of a team. If the employees feel they are treated unequally in treatment and rewards, they will shy away from giving the best inputs.

The structure of equity in the workplace is based on the ratio of inputs to outcomes. Inputs are the contributions made by the employee for the organization. Inputs for instance come in form of the number of hours worked (effort), the commitment shown, the enthusiasm shown, experience brought to the role, personal sacrifices made,  responsibilities and duties of the individual in the role. Outputs are the result an individual receives as a result of their inputs to the organization. Some of these benefits will be tangible, such as salary, but others will be intangible, such as recognition. Common outputs include salary, bonus, pension, annual holiday allowance, company car, company home, stock options, recognition, and promotion.

It’s a universal truth that company cultures are strongly interrelated with employee happiness. The more appealing and enjoyable the organization culture is, the happier their employees will be. It is not possible for a worker to be engaged when they are unhappy. Employees keep comparing with each other in regards to salary, perks, recognition and promotion. By cultivating a strong corporate culture, organizations increase the chances of good employee engagement. And, engaged employees are more likely to be great advocates of the organization brand. When organizations maintain rational inputs and outputs, they get clarity in defining equity. Equity is defined as an individual’s outputs divided by that same person’s inputs. Adam’s Equity Theory goes a step further and states that individuals look around and compare their promotions and perks to others. If they perceive an inequity then they will adjust their inputs to restore balance.

The airline industry is often mocked for grumpy employees and poor customer service, but Southwest Airlines bucks those trends. Customers loyal to Southwest often point to happy and friendly employees who try hard to help. This airline has managed to communicate its goals and vision to employees in a way that makes them a part of a unified team. Southwest also gives employees “permission” to go that extra mile to make customers happy, empowering them to do what they need to do to meet that vision. Employees who are convinced of a larger common goal are people who are excited to be part of a larger purpose.

Adobe is a company that goes out of its way to give employees challenging projects and then provide the trust and support to help them meet those challenges successfully. While it offers benefits and perks like any modern creative company, Adobe’s is a culture that avoids micromanaging in favor of trusting employees to do their best. Adobe does not use ratings to establish employee capabilities, feeling that that restrains creativity and harms how teams work. Managers take on the role of a coach/mentor, more than anything, letting employees set goals and determine how they should be assessed. Adobe gives its employees stock options so that they respect both a stake and reward in the company’s success. Continual training and culture that promotes risk taking without fear of penalty are part of Adobe’s open company culture. Putting trust in employees goes a long way towards positive organizational culture, because trust leads to independent employees who help their company grow.

Employees who are high in equity sensitivity place more importance on inputs in terms of what they can give in a situation; the higher scorers have been labeled “Benevolent.” In contrast, those who score toward the low end of the pole on equity sensitivity place greater importance on outcomes; they value what they can get in a given situation, they are labeled as “Entitled.” Toward the mid-point are those individuals who adhere more closely to the originally proposed norm of equity—that is, those who desire their inputs and outcomes to be balanced, they are labeled as “Equity Sensitive.” In sum, along the range, individuals who score high on equity sensitivity lean more toward benevolence, whereas individuals who score low on equity sensitivity lean more toward entitled.

The Western Electric’s Hawthorne plant was located in Chicago. It had some 29,000 employees and it manufactured telephones and telephone equipment mainly for AT & T. The company was known for its advanced personnel policies. The company kept updating its policies at regular intervals and once welcomed a research study by the National Research Council to check the relationship between friendly work-place atmosphere and individual efficiency.

The study began in 1924 by dividing two groups of workers. This was done to check the impact of various motivational factors on their productivity. One group was given Improved levels of lighting and the other below-standard lightning. The group which got better lightening   produced more with increase in their productivity, but the group which had sub-standard lightening also gave a good productivity. The initial assumption therefore was that increased output stemmed from disparity alone.

To check the other motivational factors payment incentives and rest intervals were manipulated at regular intervals, and although output levels varied, the trend was inevitably upwards. Whatever experimentation was applied, output went up. Although it had been fairly conclusively determined that lighting had little or nothing to do with output levels. The Assistant Works Manager, George Pennock sensed that something peculiar was going on and that experimentation needs to be continued.

In the winter of 1927, Pennock invited Clair Turner, Professor of Biology and Public Health at MIT, for further consultancy. Turner determined that rest breaks were not the cause for increased output, although it was observed that longer rest breaks gave rise to more social interaction and gave rise to change in mental attitudes among some workers. Prof.Turner attributed the rise in output to the small group; the type of supervision; earnings; the novelty of the experiment, and the increased attention given to the chosen workers for experiment.

Pennock had been among the first to note that supervisory style has a tremendous effect and is important. The supervisor involved in the lighting experiment had been relaxed and friendly; he got to know the operators well and was not too worried about company policies and procedures. Discipline was protected through liberal and understanding leadership and an esprit de corps (sense of unity) increased within the group. This was in drastic contrast to standard practice before the experiment.

Turner further invited Elton Mayo – Industrial Psychologist and Professor at Harvard University’s School of Business Studies. Mayo’s Visits in 1929 and 1930 indicated that the Test Room Workers had turned into a social unit, enjoyed all the attention they were getting, and had developed a sense of participation in the project.

In order to understand this further Mayo instituted a series of interviews. These provided the workers with an opportunity to express their views and let off steam. It emerged that when people are distressed in a given situation and are given a chance to discuss, they feel better even if the situation does not change. The experiment also found that some complaints of workers had little or no basis, and they were stressed in their personal lives which was causing distress. By focusing on more informal and open conversation with workers and by empathetically listening to them Mayo had struck a key which linked the style of supervision and the level of morale to heightened levels of productivity. Mayo was acclaimed by his followers as the Founder of the Human Relations (HR) as a branch of Management Studies,    while he was criticized by sociologists for not going far enough in his analysis.

Reading Mayo’s conclusions and interpretations cause no surprise – let alone discovery – in the 1990s; his findings are increasingly commonplace among social scientists, trade unionists and managers alike. Perhaps that is a measure of his achievement, because most critics and commentators agree that he was the first to demonstrate, infer and provide evidence from it to shift management thinking in a direction other than the widespread and deep-rooted dominance of Taylor’s scientific management.

The experiment also gave rise to the term – ‘Hawthorne effect’ – a situation which arose because people were ‘singled’ out for special treatment or a ‘special situation’ was created where workers could feel free to air their problems.

Mayo and one of his major colleagues and collaborators – F J Roethlisberger were widely reported and discussed. Roethlisberger said that without Mayo’s interpretations the results of Hawthorne case would be a big zero and would lye collecting dust in the archives.

Do you know that the Hawthorne case stimulated ‘Organizational Behavior’ as subject?  And also gave birth to McGregor’s ‘Theory X and Theory Y’ with its wider implications for leadership in organizations.

The conclusions drawn by Mayo from the Hawthorne studies established the beginnings of the importance of management style as a major contributor to industrial productivity. It emphasized on the need of interpersonal skills and monetary incentives or target-setting, and a more humanistic approach as a means of satisfying the organization’s economic needs and human skills.

The Hawthorne effect is named after what was one of the most famous experiments in industrial history. It marked a sea change in thinking about work and productivity. Previous studies, in particular Frederick Taylor’s influential ideas, had focused on the individual and on ways in which an individual’s performance could be improved. Hawthorne set the individual in a social context, establishing that the performance of employees is influenced by their surroundings and by the people that they are working with as much as by their own innate abilities.

The Second World War prompted a shift the field, as it turned its attention to large-scale logistics and operation research. There was a renewed interest in rationalist approaches to the study of organizations. It enthused and inspired many management thinkers like Herbert Simon, James G. March, Chester Bernard, Henri Fayol, Fredrick Herzberg, Abraham Maslow, David McClelland, Victor Vroom, Douglas McGregor, Karl Weik and Mary Parker. Lot of research was conducted in OB. In the 1960s and 1970s, the field became more quantitative and produced such ideas as bounded rationality, the informal organization and resource dependence. It also gave rise to Contingency Theory, Institutional Theory, and Organizational Ecology. Starting in the 1980s, cultural explanations of organizations and organizational change became areas of study. They were influenced and supplemented by anthropology, psychology and sociology. OB further got strengthened as a branch of studies by qualitative research.

Chester Bernard recognized that individuals behave differently while performing their roles in their organizations and differently in their personal lives. Organizational behavior studies the behavior of individuals primarily in their organizational roles. In doing so, organizational behavior draws most heavily on industrial and organizational psychology and social psychology. One of the main goals of organizational theorists is, according to Simms (1994), “to revitalize organizational theory and develop a better conceptualization of organizational life”.

The emotion of human cannot be underrated. The more we try to rely on rational argument and extrinsic motivation to convince people to change their attitudes and actions about emotionally charged issues at workplace such as diversity, generation gap, client service and client acquisition and succession planning etc they can rebound badly. The crux of the matter is that emotions cannot be suppressed and are inherent. We might study number of good business cases; if we study them only from quantitative angel without qualitative approach we get only half the story.

For example, it’s interesting to note that, lawyers spend a great deal of money, time and effort on jury selection for testing trial presentations, knowing that psychological factor is the key. Yet they ignore the behavioral and emotional side in governing their internal affairs and supposedly client-focused practices. We see the same dichotomy in architecture, where architects have to deal with the emotional responses of the public to their designs and structures, in financial services, where professionals know that market behavior is driven by emotions, and other fields that are selling their knowledge and analytical abilities. Isn’t this strange?