Observation is a method of data collection, involving observing and recording in a specified setting.
Observations can be structured, that is, there are defined things to observe. For example, one set of starting points is to describe the situation by identifying the people present, their titles, roles, relationships to each other, the activities which are going on, describing the physical space, and so on.
From Observation Methods, Elon’s Program for Ethnographic Research and Community Studies (PERCS) https://www.elon.edu/u/academics/percs/resources/observation-methods/
On the other hand, observations can be unstructured, which usually means recording as much as possible, usually without there being predefined things of interest to observe. Unstructured observation might be useful if the evaluator is going into the situation with no specific and predetermined questions.
Observation need not be entirely one or the other, of course, but could be a combination of structured and unstructured, or start with structured and move onto less structured.
Observation can also vary by level of participation. At the one end is just observing, without becoming involved (non-participant observation). Examples might be watching people at check out lines in supermarkets, watching traffic patterns, or watching behaviors at social events. In this case, the observer just watches.
Evaluators can also conduct participant observation, in which the observer becomes actively involved in the group or situation they are studying. Examples might be joining a group activity, as a member of the group. Someone may do participant observation to get information or understanding that only an insider could have.
The premise underlying participant observation “is that the researcher becomes a more effective observer by taking an active role in the performance of regular activities. In other words, knowledge gained through doing is of a higher quality than what is obtained only through observation. In many cases, involvement with ordinary chores will not only enhance the researcher's understanding of the processes, techniques, and words associated with these activities, but will also result in better rapport with informants.”
Above quote from: Documenting Maritime Folklife: An Introductory Guide, Part 2: How to Document. Participant Observation. American Folklife Center. Library of Congress. http://www.loc.gov/folklife/maritime/twopo.html
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Potential issues with observation:
Likely to be very resource intensive
Presence of observer may change behavior of observed.
Observer can’t observe and record everything. Possible selectivity. Address by having multiple observers, observing multiple occasions.
Difficult to know whether the situation/event observed is representative.
Whether the observe or observed are biased in reporting or recording or interpreting.
Ethical considerations:
Do those being observed know they are being observed.
Whether observed need to give informed consent.
What if you observe something that those being observed don’t want others to know.
Trust between observed and observer.
Keeping observations of people confidential or anonymous
Also see this:
Ethical Practices in Fieldwork. Elon’s Program for Ethnographic Research and Community Studies (PERCS). https://www.elon.edu/u/academics/percs/resources/ethics/