Human Relations Theory


Human Relations Theory is one of the management theories that emphasizes the importance of social and psychological factors in the workplace. The basic argument of this theory is that employees are not just an economic being, but also are social and psychological beings. And, their behavior and productivity are influenced by a range of different factors like relationships with coworkers and managers, job satisfaction, and opportunities for growth and development.

This theory was introduced in the early 20th century as a response to the classical management theory. This school of thought focuses on the importance of human factors in organization. Managers should pay close attention to the human side of an organization.

This theory emphasizes the importance of effective communication, leadership, and teamwork in creating a positive work environment that supports the needs and interests of employees.

Overview of this theory

Human Relations Theory was developed by Elton Mayo with a group of social scientists and researchers. This theory is the result of series of experiments by Elton Mayo and team at the Western Electric Company’s Hawthorne Works in Chicago during the 1920s and 1930s.

This Hawthorne Experiment was the basis of the human relations theory. This observational experiment established the cause and relationship between social and psychological factors and their influence in the workers’ productivity. Human Relations Theory is the response to the findings of the Hawthorne Experiment. This theory challenged the then prevailing view of workers as an economic unit and presented the social and psychological perspective to employment.

Component of the Human Relations Theory

This theory suggests that humans are social beings and are motivated by more than just money or any other monetarily rewards. There are different social and psychological needs that motivate humans to perform. There are different key components that this theory considers. Some of such components are.


This theory emphasizes the importance of communication in the workplace. Effective communication fosters relationships and eliminates confusion within an organization. For strengthening the human relationship in a working environment, effective communication assist by:

  • Building trust and understanding by encouraging collaboration and teamwork
  • Reducing conflict by allowing expression of opinion and feelings
  • Enhancing motivation through clear feedback
  • Facilitating decision making by sharing information and keeping individual informed
  • Improves organizational culture by fostering  transparency, trust, innovation and collaboration.


Effective leadership is critical for creating a positive and motivating workplace environment. Leadership inspires and motivates other employees. A strong leadership is inclusive, sharing and empowering.

  • A true leader demonstrates the genuine interest in the welfare of the employees and treats them with respect.
  • True leadership builds a positive relationship by providing support and feedback and creating an environment for growth and development.
  • Leadership enhances motivation by regularly boosting morale and by creating engaging and sharing working environments.


Human relations theory focuses on the importance of motivation in the workplace. Motivated employees are more productive, engaging, and committed to their work. Motivation in the working environment develops an inspiring working culture and encourages innovation and ideas. 

  • Motivation foster innovation by encouraging employees to act creatively
  • Motivation makes people work effectively and efficiently, leading productivity
  • It encourages personal growth and development.

Group Dynamics

Human Relations Theory focuses on group dynamics in the workplace. Effective teams are very essential in a working environment as they are able to collaborate, communicate and support individuals in achieving the personal and organizational goals.

  • Group Dynamics encourages collaboration among the individuals. Such collaboration from group dynamics lead to effective communication, cooperation and creativity.
  • Group dynamics encourages group support and feedback. Such dynamics improve morale, motivation, and job satisfaction.
  • This enhances learning and development. Individuals working together share their knowledge, skills and experiences.
  • Group dynamics facilitate effective decision making by encouraging more ideas, opinions and perspectives. Group dynamics keep everyone  informed.

Employee Satisfaction

This is another component of Human Relations Theory. The essence of this theory is the satisfaction of employees. This suggests that an organization should create a positive work environment that supports the need and interest of the employee and make managers responsible.

  • Employee satisfaction is essential for encouraging loyalty. Satisfaction leads to commitment and connection to the organization.
  • Satisfaction of employees improves the overall service quality, responsiveness and customer experience.
  • Satisfaction leads to retention of employees. Satisfaction in employees reduces the unpleasant act in the workplace environment. The interest of employees thinking of quitting decreases and satisfied customers also reduces the cost associated with recruitment, training and onboarding.

Limitations of Human Relations Theory of Management

Despite the significant contributions, Human Relations Theory has some limitations, which include:

Over Emphasis on Informal Groups

This theory focuses on informal groups and relationships within the workplace. Over emphasis on informal groups lead to negligence of formal structure, roles and regulations and other procedures that are prominent for effective management.

Ignores Power Dynamics

Power dynamics is obvious in any formal or informal structure workplace. Most of the modern day conflicts and inequality is due to this power dynamics. This ignorance is one of the major reasons for an exclusive and inequitable work environment. Human Relations Theory ignores such an important aspect of Power Dynamics.

Limited Focus on Performance

This theory emphasizes the social and psychological aspect of employment together with employment. It  supports the fact that there are different social and psychological factors that lead to employee satisfaction and motivation. The most prominent factors in any organization i.e. performance and outcomes are neglected in this theory. This theory considers the motivation and satisfaction without much anticipation of performance and result.

Ignores Heterogeneity

Human Relations Theory generalizes its element to all the employees. This theory assumes that all the employees have similar needs and motivations. However, there is diversity in the organization where different employees have different needs for motivation. Due to this assumption on homogeneity, this theory only addresses the general needs of employees.

Limited Applicability

This theory basically considers the human factor in organizational context. This theory may have limited applicability across different organizations and industries. It may or may not be applicable to larger or more complex organization or less relevant or smaller less complex organization.


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