This document presents research on the implications of the Hawthorne Effect and its links to firm performance. It begins with an introduction and background on the Hawthorne Effect. The study aims to determine if the Hawthorne Effect can improve firm performance by examining its relationship to employee behavior, working environment, and productivity levels. The methodology discusses using surveys distributed to employees at three firms to collect data, which is analyzed using statistical software. Preliminary findings suggest the Hawthorne Effect is positively associated with treating employees fairly and providing necessary tools/facilities. The document concludes by discussing recommendations and areas for future research.

1. The implication of Hawthorne
Effects links to Firm’s
Performance”
Presented by:
Cosmas Zeno
Yugash Chandramohan

2. CHAPTER ONE
INTRODUCTION

3. INTRODUCTION
 The study on Hawthorne effects is an interesting issue
to be discussed and reviewed at by the right
personnel’s (Spain, 2008).
 The “Hawthorne Effect” is often mentioned as a
possible explanation for position in intervention
studies. It is used to cover many phenomena, not only
unwitting confounding of variables under study by the
study itself, but also behavioral change due to an
awareness of being observed, active compliance with
the supposed wishes of researchers because of special
attention received, or positive response to the stimulus
being introduced.

4. BACKGROUND OF THE STUDY
 Norman (1983) Hawthorne effect is an inevitable part of all
usability studies and is necessary mechanism for bringing
about any performance improvements.
 Parson (1974) performance increases come about because
of the learning and feedback that takes place during the
experiment. Therefore, in the widest sense, any
performance benefits identified in a study actually rely on
the Hawthorne effect.

5. BACKGROUND OF THE STUDY
• The study examined from three different
dimensions:
Observation
Working Environments
Employees Behaviors

6. PROBLEM STATEMENT
 This research arises from the need to manages firm
performance more effectively as well as efficiently . The
global industry issues and problems demand firms to
continuously improved and remain competitive.
 Therefore, it is important to study Hawthorne Effect to for
the sake of increasing in Firms performance.

7. OBJECTIVE OF THE STUDY
 To determine whether Hawthorne Effect can improve the
firm’s performance.
 To identify the relationship between Hawthorne Effect and
human behaviour.
 To analyze the effects of Hawthorne towards
environmental factors.
 To differentiate the factors that related to Hawthorne
Effect.

8. SIGNIFICANT OF THE STUDY
The findings are expected to bring advantages to employee
, employer and organization as well.
 EMPLOYEE
Motivation.
Understanding on Hawthorne Effect positive impact.
Reduce turnover (job satisfaction).

9. SIGNIFICANT OF THE STUDY
 EMPLOYER
Provide better working environments.
Better Understanding about their employees.
Interpersonal skill.
 FIRM’S
Global competitive advantage.
Increase profit.
Continuous Improvement

10. LIMITATION OF STUDIES
• Limited to three Firm only.
• Poor quality of data(limited perception of
respondents).
• Respondents Bias.
• Constraints (time and money).

11. FRAMEWORK OF THE STUDY
 Theoretical framework of implication of Hawthorne effect
links to Firms performance.
EMPLOYEE
BEHAVIOR
HAWTHRONE EFFECT WORKING
ENVIRONMENT
PRODUCTIVITY
LEVEL

12. CHAPTER 2
LITERATURE REVIEW
This chapter gives an overview of literature to
support the area of study. This chapter
introduces the implication of Hawthorne links
to firm performance in order to give a clear
idea about the research area.

13. INTRODUCTION
 According to Afolabi (1992) indicated that and essential
aspect of research is the literature review. It is so
important that without literature review, research is
incomplete.
 Norman (1983) Hawthorne effect is an inevitable part of all
usability studies and is necessary mechanism for bringing
about any performance improvements.
 Performance improvements came about because the test
participants believed that the changes would improve their
performance and were flattered and motivated by the
attention they were being given ( Mayo , 1993).

14. HAWTHORNE EFFECT
 The Hawthorne effect is a form of reactivity, and describes a
temporary change to behavior or performance in response to a
change in the environmental conditions, with the response being
typically an improvement. The Hawthorne studies have had a
dramatic effect on management in organizations and how
people react to different situations. Hawthorne effect is a short
term improvement caused by observing worker performance
(Landsberger, 1955).

15. HAWTHORNE EFFECT
 Introduction into a work situation of any kind of
change with employees interpreted as being directed
to improving their welfare brought about an
improvement in efficiency.’ (Davis &
Shackleton, 1975). The tendency for people to behave
differently when they know they are being studied
(Davis & Shackleton).

16. 2.1 PRODUCTIVITY LEVEL
 Increase in employee productivity in response to a change
in lighting intensity and other interventions. Because these
interventions varied without the intention to increase
worker performance, Mayo argued that the increased in
productivity was the result of personal attention and of the
newness of a program Mayo (1933).

17. 2.2 EMPLOYEE BEHAVIOR
 Hawthorne effects are most helpful to tenable methodological
consideration and as claim about a fundamental feature of
human behaviors. Spain, (2008).
 The Hawthorne effect describes a temporary change to behavior
or performance in response to a change in the environmental
conditions. This change is typically an improvement. Proponents
of the Hawthorne effect say that people who are singled out for a
study of any kind may improve their performance or behavior
not because of any specific condition being tested, but simply
because of all attention they receive.( Rice, 1982).

18.  Employee Morale
The Hawthorne effect phenomenon determined that the
morale and motivation of the consistently productive
control group was their impetus of production (Fry, 1989).
Employee Motivation
The original explanation suggested that the increased
in attention by management motivated employees to
increase their productivity rather than the changes in
working conditions (Roethlisberger & Dickson, 1939).

19.  Employee cooperation
The atmosphere was one of the new employee supervision.
Group morale improved. Individuals are more likely to
come another’s assistance. Group morale improved (Davis
1974).

20. 2.3 WORKING ENVIRONMENT
 The Hawthorne effect is a form of reactivity, and describes
a temporary change to behavior or performance in
response to a change in the environmental conditions, with
the response being typically an improvement.
(Landsberger, 1995).
 Office layout.
 Necessary Tools& facilities.
 Safety.

21. CHAPTER THREE
RESEARCH METHODOLOGY
This chapter discuss about the type of
research methodology being used in
this research.

22. INTRODUCTION
This section deal in detail precisely to achieving the
research objectives and will also justify the choice of
method of those objectives
This chapter thus includes :
The type of research design used;
 The respondents or sample and population,
 Instrument for the research,
Data collection as well as data analysis to transformed
the data into meaningful information and relate to the
problem question and objective.

23. TYPES OF THE RESEARCH
 Researcher via exploratory studies trying to understand the
problem which is the implication of Hawthorne effects links to
firm performance.
 Exploratory research helps ensure that a rigorous and
conclusive study will not begin with an inadequate
understanding of the nature of the business problem.
 Most exploratory research designs provide qualitative data
which provides greater understanding of a concept.
 In contrast, quantitative data provides precise measurement.
The purpose of conducting exploratory research is to diagnosing
a situation, screening alternatives and discovering new ideas.

24. RESEARCH TECHNIQUE
Survey is the research technique that applied in this
research. Information is gathered from the sample of
respondents from three chosen company which is:
 Federal Hotel, Kuala Lumpur,
 Havey Norman Holdings Limited,
 YPC (Malaysia) Sdn Bhd .
Therefore, questionnaire was designed to elicit information
from the respondent’s point of view regarding the
implication of Hawthorne Effect link’s to Firm’s
performance.

25. DESIGN OF QUESTIONNAIRE
Questionnaire was designed to meet the research objective.
The questionnaire was divided into four sections:
 Background of the respondents
 Hawthorne effects towards firm performance
 Hawthorne effects towards employee behavior
 Hawthorne effects towards working environment
 Hawthorne effects links to Productivity Level
Cosmas - Survey (1).doc

26. DATA ANALYSIS
 Researcher used (SPSS) Statistical Package For
Social Science version 16 which is found in 1968.
The software is needed to measure the data which is
collected via survey and interview.
 This is important part experience by the researcher
to test the reliability of the data which is based on
the scores from the questionnaire distributed to the
sample.

27. RELIABILITY
Cronbach’s Alpha Cronbach’s Alpha N of Item’s
Reliability statistics
Based on
Standardized items
.830 .837 4
 Reliability is the degree to which a scale or instrument
consistently measures whatever it measures. Reliability is
expressed as a coefficient between 0 and 1.00.

28. RELIABILITY
 The higher coefficient are, the more reliable the
instrument. If the value exceeds 0.6, then the scale is said
to have internal consistency, hence a set of items
considered reliable.
 In this study, reliability for the instrument was estimated
by calculating a Cronbach’s alpha test. Table shows the
reliability statistics of the study. The value was exceeds
0.6, hence the study is considered reliable.

29. POPULATION AND SAMPLE
 The target population of this study was the
employee whose work with a firm and expose
towards Hawthorne effect within the organization.
 The target population of this study is based on three
firms. However, 144 usable surveys were compiled
to make conclusions about the whole population of
the study.

30. DATA COLLECTION
Event Organization Date of Questionnaire Date Of Data Collection
distribution.
1 Federal Hotel,
Kuala Lumpur. 26th January 2011 30th January 2011
(50 Respondents)
2 Havey Norman
Holdings Limited. 26th January 2011 30th January 2011
(44 Respondents)
3 YPC (Malaysia)
Sdn Bhd . 26th January 2011 30th January 2011
(50 Respondents)
Total 144 respondents

31. CHAPTER FOUR
FINDINGS AND DISCUSSION
This chapter presents the findings
from the extensive analysis carried
out on the data.

32. INTRODUCTION
• Data analysis is a crucial section of methods that help to
describe facts, detect pattern, develop explanations, and
test hypotheses (Levine, 1996). (SPSS 16.0) is used to
analysis the collected data. SPSS is an acronym for
statistical Package for social science.
• This chapter presents the findings from the extensive
analysis carried out on the data; start with background of
the respondents, followed by the implication of Hawthorne
effect towards employee behavior, working environment as
well as firm productivity level. The statistics showed that
there is no missing data and the total population is 144.

33. RESEARCH OBJECTIVES
 To identify the demographic and background of the Hawthorne
Effects respondents .
 To identify the relationship between Hawthorne effects and
employee productivity.
 To identify the relationship between Hawthorne effects and
employee behavior.
 To identify the Hawthorne effects links to working environment.
 To determine among the independent variable that have the
strongest relationship with dependant variable (firm
performance).

34. Objective 1: To identify the demographic and background of the
Hawthorne Effects respondents .
C:UsersUserDesktopTable 4.docx
• The study concluded that the amount of male and female
respondents is almost balance but still male workers are
dominated.
• Majority of the respondent’s race is Malay, followed by
Chinese and Indian. Other race consists of
Iban, Kadazandusun and Sino in a few amounts.
• Most of the respondents are from 20 to 30 years old.
Meanwhile this group of age category fall under general
workers.
• More than half of the respondents married.

35. Objective 2: To identify the relationship between Hawthorne
effects and employee behavior.
Table 4.3: Distribution of Means and Standard Deviation on Hawthorne Effect towards Employee Behavior.
Descriptive Statistics
N Mean Std. Deviation
The company practices its
144 3.83 .784
core values
My superior motivates me to
144 3.76 .729
perform better
The company assist in my
144 3.91 .810
career development
I am appreciated for a job
144 3.87 .722
well done
We are treated fairly 144 3.99 .780
I am rewarded based on my
144 3.92 .753
performance
Valid N (listwise) 144

36. As illustrated in table 4.3 shows that highest mean
is 3.9 (sd. 0.796), followed by mean 3.92 (sd.0.753)
and mean 3.91 (sd. 0.810). Meanwhile the lowest
mean is 3.76 (sd. 0.729).
The study concludes that by treated fairly, they
will perform and employees might less concern
about motivation given by their superior.

37. Objective 3: To identify the Hawthorne effects links with working
environment .
Table 4.4: Distribution of means and Standard Deviation on relationship of Hawthorne Effects and working
Environment.
Descriptive Statistics
N Mean Std. Deviation
I am provided with the
necessary tools / facilities to
144 3.89 .777
enable me to perform my
duties
Safety is given utmost
importance to circumvent 144 3.69 .789
industrial accidents
The layout of the office
creates a conducive 144 3.82 .825
workplace
Teamwork is encouraged at
144 3.84 .763
the workplace
Valid N (listwise) 144

38. • In Table 4.4 shows that the highest mean is 3.89
(sd. 0.777), followed by mean 3.82 (sd. 0.825). The
lowest mean is 3.69 (sd. 0.789).
• The study concluded that the main factor that
relate between Hawthorne effect and working
environment is by providing necessary tools and
facilities to employees. Employee put safety in a
workplace as a minor concern.

39. Objective 4: To identify the relationship between Hawthorne
effects and employee productivity.
Table 4.5: Distribution of means and Standard Deviation of relationship on Hawthorne Effects and
productivity.
Descriptive Statistics
N Mean Std. Deviation
Individual performance are
144 3.73 .712
measured systematically
I am given realistic targets 144 3.53 .775
Setting performance
standards improves the 144 3.74 .764
efficiency rate
The company invest on
Information Technology to 144 4.01 .857
increase productivity
Absenteeism and sick leave
144 3.99 .815
is reducing
Non-performing staff are
144 3.95 .839
managed accordingly
Valid N (listwise) 144

40. In Table 4.4 show that the highest mean is 4.01
(sd.0.857), followed by mean 3.99 (sd. 0.815). The
lowest mean is 3.53 (sd. 0.775).
The study concluded that the main factor that
relate between Hawthorne effect and productivity
level is when the Company invest on Information
Technology to increase productivity. Employee put
realistic target as a minor concern.

41. CHAPTER 4
CONCLUSION AND RECOMMENDATION
This final chapter presents the conclusion;
recommendations for future practice as well as
recommendation for the research are made at
the end of the chapter.

42. CONCLUSION
 There is a balance in overall respondents between male
and female with majority 20 to 30 years old.
 The level of education level mainly Sijil Pelajaran
Malaysia (SPM), followed by Diploma holder at the second
place.
 The relationships of Hawthorne Effect towards employee
behavior are from being treated fairly by the employer as
well as the organization, meanwhile, the motivation from
superior is the minor concern of the respondents.

43. CONCLUSION
 Being provided necessary tools, equipment and facilities
that make it easiest for the employee to perform job and at
the same time increase the firm’s performance.
 Hawthorne Effect impact towards productivity level is
when the company put some effort to The company invest
on Information Technology to increase productivity. In
contrast, respondents equally agree on a minor concern
putting realistic target

44. CONCLUSION
Among the three variables, the most crucial implication of
Hawthorne Effect is on the Employee behavior where :
 The respondents feels like been treated fairly,
 Assist in their career development,
 Company itself practice its core values,
 Rewarded the employee based on performance as well as
show appreciation for the employee for the job well done .
 Motivates the respondents to perform better.

45. RECOMMENDATION FOR FUTURE
PRACTICE
Based on the result of this study, recommendations are
developed and addressed to the greatest responsibility
for implementation:
How it works in field depends on:
 Workers
 Management
 Motivation
 Productivity

46. RECOMMENDATION FOR FUTURE
PRACTICE
WORKERS
 Insights, Suggestion, Like and Dislike, Moral, Training.
MANAGEMENT
 Transfer the power to workers and knowing their workers.
PRODUCTIVITY
 By increasing the output rate and keeping cost down, the
company will able to increase profit.
MOTIVATION
 Incentives , necessary tools to increase productivity and quality.

47. RECOMMENDATION FOR FUTURE
RESEARCH
 Based on the analysis of data and the result
presented, the following recommendations for further
study are offered:
 It is recommended that the next study could be
conducted to more company in Malaysia , therefore
making the results generalize able to respondents which
is overall Malaysian employees.

48. RECOMMENDATION FOR FUTURE
RESEARCH
 It is recommended that future research should employ a
variety of methods can be conducted to supplement each
other in order to get in depth and accurate results.
 In the future the research is recommended to have
longer period of time to gain a wider and valuable data.