Campbell Gourlay, Senior Associate for Three60 Consult, shares how employers can shape behaviour before it gets managed, with his insights below.

At Three60 Consult, employers often ask us how workplace culture can be improved, how standards can be lifted, or how relationships can be repaired before issues become formal employment problems.

The answer is rarely found in a policy or a code of conduct alone. It is more often than not found to be based in the detail of what leaders notice, reinforce, or tolerate and then consistently follow up on.

The Hawthorne effect offers a useful example to describe how this works. In plain terms, it describes the idea that people may change their behaviour when they know they are being observed or paid attention to.

The concept is commonly linked to workplace studies at the Western Electric Hawthorne Works in the 1920s and 1930s, where productivity appeared to change in response, not only to working conditions, but also to the attention workers received.

For employers, the point is not that people should be watched more closely. It is that attention itself is powerful. What an employer pays attention to becomes a signal. Over time, those signals influence behaviour, relationships and trust.

What is the Hawthorne effect, in workplace terms?

The Hawthorne effect is a psychological phenomenon where employees modify their behaviour because they know they are being observed, supported, or paid attention to by leadership.

In a workplace, that does not need to mean formal monitoring. It can be as simple as employees noticing that a manager regularly checks in, and asks about workload, follows up on concerns, thanks people for constructive conduct, or responds promptly to any instances of disrespectful behaviour. 

The concept is useful because it reminds employers that workers respond not only to rules, incentives and consequences, but also to attention. Employees notice what leaders ask about, what they ignore, who gets recognised, what conduct is corrected, and whether stated values are actually applied.

Why should New Zealand employers care about it?

Because employers influence workplace behaviour every day, whether deliberately or not. If leaders consistently ask only about output, employees may learn that output matters more than method. If leaders avoid difficult conduct issues, employees may conclude that incivility or poor behaviour is tolerated. If leaders respond well to early concerns, employees may learn that raising issues is safe and worthwhile.

Is this just another way of saying “employees behave better when watched”?

The short answer is no. There is a significant difference between constructive attention and surveillance. 

Surveillance may create compliance, but it can also create anxiety, resentment or performative behaviour. Constructive attention is different. It is visible leadership, consistent feedback, fair follow-up and genuine engagement.

People are influenced by what leaders consistently notice, name and respond to.

That influence can be positive or negative. If respectful communication is noticed and reinforced, it becomes more likely. If workload concerns are heard and acted on, trust is more likely to grow. If inappropriate conduct is ignored, employees may reasonably infer that the behaviour is acceptable or too hard to address.

How does this apply to workplace relationships?

Workplace relationships are shaped by repeated interactions. Most employees do not experience “culture” as a statement on the intranet or a poster on the wall. They experience it through day-to-day behaviours of how meetings are run, how managers respond under pressure, how conflict is handled, and whether their concerns are taken seriously.

The Hawthorne effect is helpful because it highlights the relational impact of attention. For example:

• A manager who regularly asks, “What is getting in the way of doing your job well?” may encourage early disclosure of workload or resourcing issues.
• A leader who thanks employees for raising concerns may increase confidence in speaking up.
• A supervisor who calmly addresses dismissive or disrespectful conduct in the work place may reset expectations without needing a formal process.
• An employer who follows up after a difficult conversation may demonstrate that the employment relationship remains valued.

These are small acts, but they are not soft. They are management signals. Over time, they can influence whether employees withdraw, escalate, collaborate or trust the process.

What does this mean for psychosocial risk in the workplace?

WorkSafe’s guidance on managing psychosocial risks in New Zealand states that:

1.     the Health and Safety at Work Act 2015 defines “health” as physical and mental health

2.     psychosocial risks can harm workers’ physical and mental health, and that businesses must manage those risks.

3.     businesses must consult with workers when making decisions about how to manage health and safety risks related to their work. 

The practical link is clear. Employers cannot manage psychosocial risk well if they do not pay attention to how work is actually being experienced. Workload, role clarity, support, interpersonal conduct, instances of customer aggression, poor communication and organisational change may all affect how people experience work.

The Hawthorne effect reminds employers that asking about these matters can itself change behaviour. If employees see that leaders are interested in workload pressure, psychological safety and respectful conduct, those matters become part of the organisation’s real and tangible operating rhythm. Conversely, if leaders say wellbeing matters but only measure speed, sales or output metrics, employees may experience the true priority differently and respond accordingly.

Workplace culture: What should employers avoid?

Employers should be cautious about approaches that create the appearance of attention without real substance. Some common risks include:

• conducting engagement surveys but not reporting back;
• encouraging staff to speak up but reacting defensively when they do;
• monitoring behaviour without explaining the purpose;
• focusing on individual resilience while ignoring work design;
• treating relationship issues as personality conflicts without examining leadership, workload or systems;
• using informal observation as a substitute for fair process where formal allegations are raised.

The final point is important. The Hawthorne effect may help employers improve behaviour and relationships, but it does not replace procedural fairness. Where there are allegations of misconduct, bullying, harassment, poor performance or breach of policy, employers still need a fair and reasonable process.

Humans have a built in bullshit detector evolved over millions of years and will sniff out insincerity where the actions do not match the words spoken or the shiny bold statements written on the wall…

Have a look around you ,what is your work place like? What can you change or influence?

John McKeefry, Employment Relations Specialist & Partnership Lead, shares Three60 Consult’s Wellington office opening and how our new location supports Public Sector Employers.

Our new office at 95 Customhouse Quay, Wellington, gives public sector organisations, ministries, councils and government agencies across the region easier access to face-to-face, specialist employment relations support. 

Employment Relations Advice That Understands the Public Sector

Public sector employment relations rarely involve a single issue in isolation. Agencies need a partner who understands how workplace decisions must balance legal obligations, public accountability, union relationships, stakeholder expectations, organisational reputation, and workforce trust.

As an All-of-Government supplier, we are pre-qualified to help New Zealand employers navigate sensitive, high-stakes workplace issues. Our specialists bring more than 30 years of experience delivering calm, practical, and solutions-focused advice to public sector workplaces.

How Our Wellington Team Can Help

• Collective Agreement Bargaining: Strategy, preparation, table representation, and mediation.  

• Organisational Change & Restructuring: Support from early strategy through consultation and implementation.

• Workplace Investigations: Independent, robust reviews into grievances, conduct concerns, and disclosures.

• Mediation & Conflict Resolution: Practical support to address disputes and rebuild trust.

• Employment Relations Advice and Representation: Clear guidance on complex employment matters, risk, and sound process.

• HR & ER Training: Practical capability development for leaders and HR practitioners.

Experienced Support, Closer to Your Team

Our Wellington base allows us to collaborate in person while backed by the capability of our wider national team.

If your agency needs specialist ER support, an independent perspective, or extra capacity, reach out to me for a confidential conversation.

John McKeefry

Employment Relations Specialist & Partnership Lead

john@three60consult.co.nz | 021 429 537

Todd Tower, 95 Customhouse Quay, Wellington 6011

Anna Jones, CEO of Three60 Consult, has extensive experience in employment relations, mediation and workplace dispute resolution. Having supported the resolution of thousands of workplace disputes, Anna shares her perspective on how AI is changing mediation, and why skilled human judgement remains critical to achieving practical outcomes.

How AI is changing employment mediation and workplace dispute resolution in New Zealand

AI is already changing the way employment relationship problems are being framed and pursued in New Zealand.

Most of the discussion I’ve seen to date has focused on what AI might mean for the Employment Relations Authority or the courts with lengthy submissions that are often full of words but short on substance. However, the more immediate impact of AI is being felt earlier in the dispute resolution pathway before litigation, particularly through early resolution and mediation.

How AI is influencing employment mediation

Understandably, people are turning to AI to assess the strength and value of their own case. On one hand, this is to be celebrated as it can improve access to information for employees who can’t afford legal advice, or employers trying to get a quick sense of their position. On the other, larger, more gnarly hand, the advice AI spits out is only as good as the information it is given. And people being people, that information is usually skewed to support a narrative of being wronged.

Most people will be seeking validation as it’s hard to be objective when you’re in the thick of an employment dispute. Input may not include all relevant documents, the other party’s explanation, the legal context, the evidential problems, the credibility issues, and the questions asked of AI may not be the right ones.

The result is that AI can end up confirming the user’s view rather than testing it. A not insignificant number of people now arrive at discussions, negotiations or mediation with a very firm view of their prospects, the likely compensation, and what they are “owed”. In some cases, those expectations are well beyond what we see in reality and the caselaw provided by AI feels like another layer of validation, when often the cases relied on are not relevant or even real. The result of this is it’s much harder for mediators, lawyers and representatives to ground parties back to reality.

There is another issue too, where in essence, the robots are talking to other robots and people have handed over responsibility for the conflict. We are starting to see grievances written by AI, employer responses written by AI, and submissions drafted with heavy reliance on AI. The documents may sound polished, cite legal principles and even refer to cases. But sometimes the substance is thin, the tone is unnecessarily adversarial, and the humanity of the dispute is lost.

At their core, employment relationship problems are people problems. They involve people who feel hurt, dismissed, embarrassed, misunderstood, disrespected, or under pressure. If both the complaint and the response are generated through a tool that amplifies certainty and sharpens the argument, we risk making early resolution harder, not easier.

This matters because mediation and attempts at early resolution work best when people can reassess. They need to be able to hear risk, recognise uncertainty, and move from a fixed position to a workable resolution. If AI has already told them they have a strong case, a high-value claim, and clear moral vindication, that can be difficult to unwind.

So the question is not whether AI belongs in employment relations; it’s already here. The better question is how do we work with people who come to the table armed with AI-generated advice? So naturally, I asked AI what it thought and it gave me the following points:

Five practical starting points

1. Ask what AI has been used for: Not in a defensive or dismissive way, but to understand what has shaped the person’s expectations.
2. Separate information from advice: Help parties distinguish between a general legal summary and a proper assessment of their specific facts, evidence, risks, and likely outcomes.
3. Test the inputs: Ask: what information was provided, what was left out, and what assumptions did the AI appear to make?
4. Bring the humanity back in: Move beyond the drafted position. What happened? What was the impact? What does each party actually need to move on?
5. Reality-test without humiliating: People may have relied heavily on AI because they needed help. The task is not to make them feel foolish. It is to help them make better decisions with better information.

Ironically, that’s not bad advice. My fallible but real human brain would add the following:

• Most people aren’t upfront about using AI (yet), so seeking to understand how someone reached the view they have helps to open the conversation.
• Spend time understanding what is important to the person, because it’s not usually about obtaining lottery figures, more often than not, it’s about being able to stand up for themselves and then being able to move forward.
• Ensure there is adequate time available to help a person step back down from excessively high expectations. If there is a difference of more than one years’ salary between the parties, then a half day mediation probably won’t do it. But that extra half day will probably still be quicker and more cost effective than a trip down litigation lane.

Key takeaways

• AI is increasingly influencing employment disputes before they reach the Employment Relations Authority or the courts.
• AI can improve access to information but may also reinforce unrealistic expectations.
• Employment mediation works best when people remain open to reassessing risk and uncertainty.
• Human judgement, empathy and practical problem-solving remain critical to successful dispute resolution.
• The challenge is not whether AI should be used, but how it can be used responsibly

This piece isn’t intended to be a beat-up on AI. Historically ignoring new technology and hoping it will go away hasn’t been a particularly successful approach. Used well, AI might help people prepare, understand process, and identify relevant issues. Used poorly, it may entrench positions, inflate expectations, and remove the very human judgment that early resolution depends on.

And of course, it’s not just parties using AI. Increasingly, it’s the lawyers and representatives too… so I ask you, what does this mean for the future of dispute resolution?

Adrian Tocker draws on his 20 years of extensive experience advising employers across all aspects of employment law, collective bargaining, and workplace relations. In this insight, he provides a practical, balanced, and informed analysis of the proposed Employment Leave Bill, exploring its potential implications for employers, employees, and workplace practices. Adrian offers valuable perspectives on the key changes being proposed, the challenges organisations may face in adapting to them, and the considerations employers should keep in mind as the legislation progresses.

The Select Committee has now reported back on the Employment Leave Bill, the proposed replacement for the Holidays Act 2003. The Committee has recommended the Bill proceed, while making a number of practical improvements aimed at improving workability around issues such as notional rosters, multi-role employees, public holidays, annual leave and remediation.

Having spent many years advising employers on Holidays Act compliance, remediation projects, collective bargaining issues and payroll disputes, my overall view is that the Bill represents a serious attempt to address the systemic problems that have existed under the current legislation for decades. The proposed move to an hours-based model is not simply a payroll change – it is a fundamental shift in how leave entitlements are earned, recorded and paid.

Is it perfect? No.

There are legitimate concerns about the impact on some employees, particularly those with highly variable work patterns, significant additional hours, casual arrangements, or part-time work. Those concerns deserve proper consideration and will undoubtedly continue to be debated as the Bill progresses.

However, we also need to acknowledge an uncomfortable truth.

The Holidays Act has become one of the most difficult pieces of employment legislation for employers to administer correctly. Despite significant effort and good faith by many organisations, payroll compliance issues have become widespread. Numerous employers have spent years and millions of dollars rectifying historical underpayments, often arising from genuinely complex calculation requirements rather than deliberate non-compliance.

For many employers, the attraction of the proposed framework is not reducing employee entitlements. It is the prospect of finally having a leave system that is easier to understand, easier to explain and easier to administer.

The proposed framework provides:

• clearer leave accrual rules
• a more consistent payment methodology
• greater certainty around public holidays and otherwise working day assessments
• improved payroll transparency
• clearer record-keeping requirements
• greater confidence that employees are receiving the correct entitlements and payments.

The political question will be whether the Bill survives largely intact following the upcoming election?

Regardless of where employers sit politically, I think organisations should be paying close attention now. If enacted, implementation is likely to require significant work across employment agreements, collective agreements, payroll systems, rostering practices, HRIS platforms, policies and manager capability. The proposed two-year lead-in period may sound generous, but for larger and more complex employers it will pass quickly.

There are some practical steps employers can start considering now:

• reviewing guaranteed hours and availability arrangements
• identifying employees working regular “additional” hours
• assessing casual employment arrangements
• reviewing multi-role employee structures
• understanding how payroll systems would manage an hours-based leave model
• considering how standard hours, additional hours and roster patterns would be recorded and maintained
• continuing any existing Holidays Act remediation work, as current obligations remain unchanged.

Perhaps the biggest challenge for employers will be ensuring that the new framework is implemented as intended. The success of the model will depend heavily on genuine alignment between employment agreements, actual work patterns, rostering arrangements and payroll treatment. If those things are not aligned, many of the issues we see today will simply reappear in a different form.

Having worked with Holidays Act issues for many years, I’m not convinced the Bill is perfect. But I am convinced the status quo isn’t. The proposed framework feels like a serious attempt to align leave entitlements with how people actually work in modern New Zealand workplaces.

If implemented well, that should lead to clearer entitlements, more accurate payments, greater compliance certainty and, ultimately, a system that works better for both employees and employers.