The Hawthorne Effect refers to the phenomenon where individuals modify their behavior in response to being observed or studied. This effect was first identified during a series of studies at the Hawthorne Works factory in the 1920s, where researchers found that workers improved their productivity simply because they were being monitored. This effect highlights the impact of observation on performance, suggesting that awareness of being watched can lead to changes in behavior. It has significant implications in various fields, including management, education, and healthcare, where understanding how observation influences actions can enhance outcomes.