Hawthorne Effect

Categories: Financial Theory

Oompah. Loompah. Doopity Doo. I'm just an allegory drawn by Shmoop for you.

What? That's how the factory songs go at The North Pole where we write this stuff.

Er, fine...financial glossary terminology.

So...the Hawthorne Effect. You have a factory. Everyone is bored. They do the same thing again and again and again (and again). Any change, even an adjustment of the intensity of the lighting, actually improves worker productivity.

This is what Hawthorne proved in his study: Change almost anything...any of the variables to make the dull rote routine blah of daily factory life a bit more exciting, and you get more out of your workers. And the same holds true today: of all the studies Hawthorne created, the Effect was far and away his best. Way better than the Hawthorne Supremacy, in our opinion.

Find other enlightening terms in Shmoop Finance Genius Bar(f)