The Hawthorne Effect refers to the phenomenon where individuals alter their behavior in response to their awareness of being observed. Originally identified during research conducted at the Hawthorne Works factory in the 1920s and 1930s, this effect suggests that employees improve or modify their work behavior not necessarily due to explicit changes in work conditions, but because they are aware that they are being observed and studied. This implies that people are motivated to perform better or differently when they know that their actions are under scrutiny. The Hawthorne Effect is significant in psychological studies, management, and organizational behavior, highlighting the importance of considering human factors when evaluating performance and implementing changes.