Popularly called organizational behavior and rooted in the behavioral sciences, the science of human relations was developed in the late 1940s. It is based primarily on psychology (which attempts to determine why individuals behave the way they do) and sociology (which attempts to determine how group dynamics affect organizational performance). Social psychology, economics, and political science have also contributed to organizational behavior.

During the 1950s, research in human behavior was conducted in large organizations. By the late 1970s, organizational behavior was recognized as a discipline in its own right, with teachers, researchers, and practitioners being trained in organizational behavior itself. Organizational behavior is a social science that has built its knowledge base on a sound foundation of scientific theory and research. Human relations takes a practical, applied approach. It attempts to anticipate and prevent problems before they occur and to solve existing problems of interpersonal relations in organizations.

In early America, most people worked on farms or were self-employed tailors, carpenters, shoemakers, or blacksmiths. Then, during the Industrial Revolution, people left the farms to work in factories that were privately owned. These businesses were concerned with profits, not employees, and managers viewed people only as a source of production. Most of the early owner-managers gave little thought to the working conditions, health, or safety of their employees.

During the 1970s, interest in human relations peaked. By the late 1970s, the term human relations was primarily replaced with the more commonly used term organizational behavior.

In the 1990s, the trend toward increased participation of employees as a means of improving human relations and organizational performance continued. This trend included greater levels of participation at the lowest level of the organization. As a result, employees have more input into management decisions and how they perform their jobs. The use of groups and teams also became popular in the 1990s and continues today.

Organizational behavior will continue to be an important factor in organizational performance and results.