It involves the use of observation for the purpose of understanding. In an organizational context, it implies that researchers not talk or in any way interact with employees or other subjects, not least because it causes interruption in their activity. Researchers may use cameras and other recording equipment. Legal provisions exist to protect the interest of subjects such that researchers must take permission from subjects to use such procedures. Because unobtrusive observation tends to be more objective, care must be taken to avoid the Hawthorne effect, i.e., of subjects changing behavior (albeit unwittingly) because of awareness of being subjects. Personnel who typically use the observation method are supervisors, HR experts and consultants.
Two types of the observation method are commonly cited: direct – comprising simple observation (without research intervention) and participant observation (with researcher intervention); and indirect, consisting of physical trace evidence and archival data sources. A distinction has also been drawn between naturalistic observation (i.e. observation made in the natural setting of the activity or event) and systematic observation (conducted under experimental, laboratorial or isolated conditions).
Any investigation that bases itself largely on observation must take care to address defects emerging from lack of inter-observer reliability and from observer bias.