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Updated Mar 23, 2023

Management Theory of Elton Mayo

The management theory of academic George Elton Mayo can help you build more productive teams.

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Sean Peek, Senior Analyst & Expert on Business Ownership
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George Elton Mayo was an Australian professor of industrial relations who taught at Harvard Business School in the 1920s. Mayo is considered the founder of the human relations (HR) movement and his contributions to the field have earned him the titles of “father of HR” and “father of scientific management.” 

Before Mayo’s work in HR, the prevailing theory in workplace productivity and management was that workers were primarily motivated by pay. Therefore, employees’ human needs were widely disregarded by businesses. Mayo used a science-based approach to disprove that employees were inherently lazy. His HR theories continue to influence the American workplace. 

Did You Know?Did you know
Mayo pioneered research into the psychoanalytic treatment of shell shock while serving on the University of Queensland's war committee.

The management theory of Elton Mayo

Based on his well-known Hawthorne experiments, Mayo’s management theories grew from his observations of employee productivity levels under varying environmental conditions. His experiments drew a number of conclusions about the real source of employee motivation, laying the groundwork for later approaches to team building and group dynamics. Mayo’s management theory states that employees are motivated far more by relational factors such as attention and camaraderie than by monetary rewards or environmental factors, such as lighting, humidity and more.

Mayo developed a matrix to illustrate the likelihood that a given team would be successful. His matrix demonstrates the role that varying combinations of group norms and group cohesiveness play in team effectiveness.

Mayo’s theories identify a “norm” through the degree to which a group encourages positive or negative behaviors. This is typically expressed through an employee handbook or workplace policies and can include formal or informal rules.

Group cohesiveness is how a group cooperates together, defined as a group’s overall comradery or level of teamwork.

The following are the four combinations of a group’s norm in relation to its cohesiveness:

  1. Low norm and low cohesiveness: This group is ineffective and has a minimal impact since none of the members are motivated to excel.
  2. Low norm and high cohesiveness: This group has a negative impact since fellow members encourage negative behavior. In a typical workplace, an example would be a group that gossips together and actively fights against management — a group with high comradery and low structure. 
  3. High norm and low cohesiveness: This group has a small degree of positive impact through individual member accomplishments. Each employee must maintain a high standard of work but does not cooperate as part of a team.
  4. High norms and high cohesiveness: This group has the greatest positive impact, is held to a high standard and works together to achieve its goals. 

How Mayo’s theory applies to small businesses

To survive in a competitive business market, a small business must unlock the potential of its limited workforce. Mayo’s Theory of Management is the key to unlocking that potential. Here are a few benefits for small businesses.

Supports a limited payroll

The core premise of Mayo’s theories is that relational factors are better motivators than simply increasing employee pay. This is beneficial to small businesses since their payroll potential is typically limited. 

Increases responsiveness

When employees feel empowered to voice concerns and frustrations, managers can address issues before they snowball into massive problems. Additionally, employees can typically identify production issues or customer issues before management encounters them. Therefore, a business can respond more quickly to sudden issues by opening a consistent communication channel between employees and management. Mayo’s management theories rely on this consistent communication channel.

Improves management skills 

To implement Mayo’s theories, a small business must have managers who are capable of engaging with employees on a regular basis. Managers utilizing Mayo’s theories may be seen as more approachable and provide greater contributions to the overall success of the business.

Increases employee retention

An employee who is emotionally invested in a business will typically stick around longer than they would for a business with which they do not connect. This increase in employee retention will significantly reduce the amount of money a small business will need to invest in hiring efforts. 

Improves mental health

Mayo’s theories rely on engaging with employees on personal matters. The ability to speak openly about frustrations and search for solutions will lead to a healthier work environment.

Prevents burnout

The rate of burnout dramatically increased during the COVID-19 pandemic. Mayo’s management theories reduce burnout and relieve staff shortages by creating more cohesive teams and camaraderie. 

FYIDid you know
According to the American Psychological Association Trend Report, burnout can present itself as energy depletion, increased mental distance from one’s job and/or reduced professional productivity.

How to implement Mayo’s theory in your business

There are many ways that a small business can use Mayo’s HR theories. 

Implement strong communication

Mayo’s theories state that increased communication and cooperation improve a team’s cohesion. Small business owners should communicate with their teams regularly and openly. Additionally, consider providing teammates with both formal and casual feedback

Create more group projects

According to Mayo’s teachings, intense interaction and cooperation through teamwork increase productivity. On the manager’s part, feedback should be given to the team at large as well as each individual’s contributions. 

Increase involvement between managers and employees

Mayo’s theories state that decreased productivity may arise due to a lack of attention. Supervisors and managers should spend some time interacting with employees on a personal level. Try to learn about your employees’ personal lives, motivations and feelings.

Reduce the number of negative interactions

Mayo’s theories state that negative supervisor interactions increase stress and fatigue. Don’t micromanage; let your employees use their creativity and ingenuity to solve problems. If a negative interaction is inevitable, openly communicate with empathy and kindness and don’t drag out the issue. 

Set established rules

“High norms” result in positive impact, according to Mayo’s theories. Establish workplace rules and regulations and let your employees work within that established framework. To increase camaraderie within your team, consider formulating the rules together. Employees who share their input are more likely to follow the set rules. 

Create a feedback system

Mayo’s theories state that employees thrive when they have the opportunity to express their opinions. Don’t let complaints fester. Instead, listen to the complaints and make attempts to address them. It is always better to provide an outlet where employees can voice any concerns.

Let employees determine their own working conditions

A happy employee is a productive employee, according to Mayo. Consider allowing your employees to dictate where they will complete their tasks. This can be as simple as giving employees the freedom to decorate the office, work remotely a few times a week or set their own work schedule.

Understand the concepts of Mayo’s theory and how they can benefit you

Numerous websites provide valuable information about Mayo’s theories. In addition to diagrams, summaries and explanations of Mayo’s management principles, you’ll find various videos and instructional materials that can help you develop the background knowledge and practical expertise to put Mayo’s theories to work for your company.

Take advantage of consulting services that can help give you greater insight into Mayo’s theories

Consultants with knowledge and experience in the management theory of Mayo can guide you in maximizing the benefit of his principles in your own company’s unique environment.

Take advantage of resources designed to help you make the most of Mayo’s management theories

Widely available online tools and resources can help you more easily implement Mayo’s management principles. Videos and various other Mayo theory-based products, information and services let you choose the resources most valuable to your business.

Consider the many benefits of putting the Mayo management theory to work for your business. If you decide to use it, why not go all out and practice it in all the areas it can effectively address: your own leadership of the company, your managers’ development and your employees’ engagement.

author image
Sean Peek, Senior Analyst & Expert on Business Ownership
Sean Peek co-founded and self-funded a small business that's grown to include more than a dozen dedicated team members. Over the years, he's become adept at navigating the intricacies of bootstrapping a new business, overseeing day-to-day operations, utilizing process automation to increase efficiencies and cut costs, and leading a small workforce. This journey has afforded him a profound understanding of the B2B landscape and the critical challenges business owners face as they start and grow their enterprises today. In addition to running his own business, Peek shares his firsthand experiences and vast knowledge to support fellow entrepreneurs, offering guidance on everything from business software to marketing strategies to HR management. In fact, his expertise has been featured in Entrepreneur, Inc. and Forbes and with the U.S. Chamber of Commerce.
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