"Effect Test"

"The discovery of the effect test is often attributed to the Hawthorne research, a socioeconomic experiment conducted in 1927 among workers of the Hawthorne Works of the Western Electric Company in Cicero, Illinois. A group of female workers over a period of a year were subjected to measured changes in their hours, wages, rest periods, organization, and degree of supervision in order to determine the effects on their performance or work output. The overwhelming deduction was that social and psychological influences gave more marked results than the changes in wages and hours that had been the economists' assumption. One of the Hawthorne experiments, which became famous, illustrated that output increased with successive reductions in light. The conclusion was that less light does not increase productivity but that other attention received by the workers produced the increased output. The experiment was repeated a number of times until the light made it nearly impossible for the workers to perform their task and yet the output still increased. 

Measuring the effect of those exogenous variables either independently or simultaneously can be quite challenging. If statistical analysis (multiple correlation analysis) does not adequately demonstrate the magnitude of the improvement attributable to the exogenous variables, it might be necessary to use control groups to isolate the effect of the exogenous variables. In other cases, it might be sufficient not to search for academic truth if the cost of isolating the effect of exogenous variables exceeds the perceived benefits. In other words, while management might realize that the productivity improvements result from many factors, the greater business objective is to improve productivity rather than to understand the impact of isolated factors."

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