NEO CLASSICAL THEORY

SHAUN OMAR K. USMAN

 NEO CLASSICAL THEORY
• The behavioural science approach/ neo classical theory
emerged since classical approach did not achieve sufficient
production efficiency and workplace harmony.
• Thus, there was more interest in helping the managers to deal
more effectively with people side of the organization.
• Emphasized understanding human behaviour, needs and
attitudes in the workplace.
• The focus is on ‘people’ who staff for, and manage the
organization rather than just the organization as an entity.
 NEO CLASSICAL THEORY
• The Human Relations Movement
- An effort to make managers more sensitive to their
employees’ needs.
- Emphasized satisfaction of employees’ basic needs as the key
to increased worker productivity.
- Suggests jobs should be designed to meet higher level needs
by allowing workers to use their full potential.
 NEO CLASSICAL THEORY
• ELTON MAYO – believed emotional factors were more
important determinants of productive efficiency than were
physical and logical factors.

• Conducted the Hawthorne Experiments: Demonstrated the

importance of understanding how the feelings, thoughts and
behaviour of workgroup members and managers affect
performance.
 THE HAWTHORNE STUDIES
• Illumination Study (November 1924)

* The mere practice of observing people’s behavour tends t

alter their behaviour and is called Hawthorne Effect.
Experiment indicated that Productivity increased when studies
were on and slumped when the study got over as workers were
motivated due to the interest shown by management.
 THE HAWTHORNE STUDIES
• What really increase the Productivity?

* Choosing one’s own co-workers, working as a group, being

treated as special (as evidenced by working in a separate
room), and having a sympathetic supervisor were the real
reasons for the productivity increase.
 THE HAWTHORNE STUDIES
• Interviewing Program (1928 - 1930)

* Investigate connection between supervisory practices and

employee morale.

* The results proved that upward communication in an

organization creates a positive attitude in the work
environment.

* The workers feel pleased that their ideas are being heard.
 THE HAWTHORNE STUDIES
• Bank Writing Experiment

* The purpose was to find out how payment incentives would affect productivity.

* The surprising result was that productivity actually decreased, because the men
were afraid that the company would lower the base rate and had a clear idea of a
fair day’s work.

* Workers apparently had become suspicions that their productivity may have been
boosted to justify firing some of the workers.

* Conclusion: Social groups can influence production and individual work

behaviour. Informal organization constrains employee behaviour within formal
organizational structure.
 FROM HUMAN RELATIONS TO
BEHAVIORAL SICENCE APPROACH
• Human Relations is frequently used as a term to describe the
ways in which the managers interact with their employees.
• The later researchers trained in social science (psychology,
sociology, anthropology) came to be known as behavioural
scientists rather than the human relations theorists.
• Important aspects of the behavioural science approach:
- Communication
- Employee development
- Leadership
- Employee motivation
- Organization as a social system
 CONCLUSION
• Organizations are socio-technical systems. The
management must integrate both systems.
• Work and interpersonal behaviour of the people in the
organization is influenced by many factors.
• Employees are motivated not only by physiological
needs but also by social and psychological needs.
• Different people have different perceptions, attitudes,
needs and values. These differences must be found out
and recognized by management.
• In an organization conflicts are unavoidable.
• Personal goals and organizational goals must be joined
together.