The early 20th Century was a period in which organisations were both mechanistic and highly centralized where employees were considered to be much like machines, which through time and motion studies, could be better organised and controlled to improve their work efficiency. The Human Relations School began to evolve and change its research methodologies to focus on more inherent characteristics of workers, including external influences such as home life, to improve not only inter-professional relationships between managers and workers, but to understand how to model the organisation to improve worker productivity and efficiency incentives. The Relay Assembly Test occurring between 1927 and 1929 is a prime example of this change in thought about workers being mechanistic and capable of being statistically measured for performance. Even when worker conditions were improved or made worse, productivity increased in the experiment. Again, this refuted the Taylorism view of scientific management when the Relay Assembly Test researchers realised that productivity was actually a product of the experiment itself, making the test group appear special which gave them more incentive to be efficient workers. The aforementioned research studies, which clearly indicated a linkage between relationship development and the dynamics of work groups (organisational culture) were significant catalysts for improved performance or depleted efficiency. These and other studies opened the doors for examining leadership philosophies instead of the rigorous control management ideology that existed prior to the consistent conclusions learned from the aforesaid studies. When managers in the organisation showed a marked interest in listening to worker concerns and needs, employees maintained a more positive sentiment about the organisation which was an influence in their future productivity. The Human Relations School also identified the phenomenon of groups in the organisation, recognising that culture and in-group status (cliques) influenced the level to which productivity increased or decreased and how workers interacted and complied with managerial direction. It was the first time that researchers and business practitioners realised that social systems drove performance in the organisation, which changed direction of management and leadership ideology to better focus on the dynamics of the inter-professional relationships within an organisational context. The Human Relations School radically changed pre-existing sentiment about mechanistic and science-oriented management and built the foundations for contemporary human resources philosophy. (2) Is the way a job is designed important for employee motivation? According to theory, it is absolutely important for ensuring proper employee motivation and building incentives for productivity. According to Herzberg, a later organisational theorist, workers are more motivated when they are given challenging job duties rather than assigning them repetitive and mundane tasks. Herzberg laid the foundation for today’
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1. What do you consider to be the main contributions of the Human Relations School to our understanding of human behaviour in organizations? The Illumination Studies occurring between 1924 and 1927 at Hawthorne was the first genuine movement that steered away from Taylorism (Scientific Management) in which it was believed that the organisation, job design and labourers could be statistically ordered to improve efficiency and productivity…
The model expends on three things:
3. the market risk premium, which is equal to the difference in the expected rate of return for the market as a whole; that is, the expected rate of return for the average security minus the risk free rate, (km-krf).
The CAPM has two primary strengths.
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