The Basics of Industrial-Organizational Psychology

3 examples of I/O psychology in action

The Basics of Industrial-Organizational Psychology

Industrial-organizational (I/O) psychology is a field in which psychologists work within organizations to address assessment, engagement, retention, and productivity of employees and workers. To further digest this complex discipline, the American Psychological Association characterizes I/O psych as the scientific study of human behavior as it concerns workplaces.

Industrial-organizational psychologists might find themselves working within the government, businesses, nonprofits, marketing, human resources, consulting, or higher education among others.

In a field that has such wide reach, it can be difficult to imagine what exactly the day-to-day work of an I/O psychologist looks .

The following three examples give possible workplace scenarios for I/O psychologists.

 Employee training and career development

A human resources professional is one of the many career paths an industrial-organizational professional can take. Involved in this career is the ongoing training of employees and the development of employees for the company for which the I/O psychologist works. The Association for Psychological Science details how training happens on multiple levels.

Employees undergo training that is specific to their field and their company as well as given time to implement these skills. On an individual level, employees are trained their individual skill set and their long- and short-term career development goals.

The job of an I/O psychologist is to assess each employee individually in his or her role and how development in this role relates to the company. On top of this, professionals use their expertise to ascertain how best to orient the company’s training industry or company goals, strengths, weaknesses, and needs.

 Ergonomic accommodation

Ergonomics is the field of study that focuses on how individuals interact with their workplaces, systems, and products.

I/O psychology professionals may be in charge of evaluating how easily employees can access their workplace and perform their duties given the systems and products utilized by the company or organization.

In addition to this, I/O psychologists may be in charge of developing procedures that not only help maximize employee performance but minimize their risk of an on-the-job injury.

Employee satisfaction

In addition to managing the happiness and well-being of employees as they perform their work, I/O psychologists might collect data on employee job satisfaction. This includes the productivity of the workplace, motivation, rewards, and general employee sentiments about job enjoyment.

Within this example, the I/O psychologist’s job is to collect and evaluate data given by employees. It’s up to the I/O psych to figure out solutions and changes (with the help of other company professionals) that might benefit the workplace and employees satisfaction temperature checks.

Industrial-organizational psychologists are important because of how they help assess problems and create change within work environments and organizations.

The role is especially important now as company policy and culture changes during the COVID-19 pandemic. These professionals help manage difficult conversations and provide comfort (physical, emotional, mental, etc.

) or tools to make employees’ day-to-day work more amicable.

Degrees in I/O Psychology

At The Chicago School, we offer a variety of I/O psychology programs, from certificates to M.A. degrees, sure to prepare graduates for the complexities of today’s business environment.

  • Certificate in Industrial & Organizational Psychology (Online)
  • Certificate in Industrial & Organizational Psychology, Generalist Certificate (Washington, D.C., Los Angeles, Irvine, San Diego)
  • Dual Degree M.A. Industrial/Organizational Psychology: Internship Track and Master of Legal Studies (Chicago, San Diego, Los Angeles)
  • Dual Degree M.A. Forensic Psychology: Non-Licensure Track and Master of Legal Studies (Online)
  • Dual Degree M.A. Industrial/Organizational Psychology: Internship Track and Master of Legal Studies (Washington, D.C.)
  • M.A. in Industrial & Organizational Psychology, Internship/Thesis Track (Irvine, Los Angeles, San Diego, Washington, D.C., Dallas, Chicago)
  • M.A. in Industrial & Organizational Psychology, Internship/Thesis Track, Human Resources Concentration (Chicago)
  • M.A. in Industrial & Organizational Psychology, Applied Research Project Track (Online)

Learn more about I/O Psychology at The Chicago School

The Chicago School of Professional Psychology is rewriting the script of psychology education with our 20+ degree programs across seven metropolitan areas including Southern California, Washington, D.C., Dallas, Chicago, and online. Learn more by completing the form below.


What is Industrial Organizational Psychology?

The Basics of Industrial-Organizational Psychology

Industrial-organizational psychology is the study and application of psychological concepts and practices to a company or organization and its workforce. In practical terms, that means industrial-organizational psychologists help companies maximize their efficiency by improving hiring and promotion strategies, training and development, employee motivation programs and much more.

“I would say it is using scientific study to look at employee-employer relationships as they relate to productivity, morale, engagement, job satisfaction and attitudes,” said Dr. Thomas MacCarty, associate dean of psychology at Southern New Hampshire University (SNHU).

Essentially, industrial-organizational psychologists can help businesses recruit and hire the right people, help develop training and development programs to improve employee performance and create incentives and organizational structures, so employees are happier and more productive at the job and maintain work-life balance.

What Does an Industrial-Organizational Psychologist Do?

The Society for Industrial and Organizational Psychology (SIOP) identifies 6 key areas industrial-organizational psychologists (IOPs) focus on that are of “critical relevance” to employees and businesses:

  • Testing – Develop tests and assessments to measure employees and potential employees’ job knowledge and skills, personality and other factors that influence performance.
  • Staffing – Recruit candidates that best fit positions in an organization and develop programs to train and retain the company’s best employees.
  • Performance Management – Design job performance measurement systems to improve employee performance.
  • Employee Attitude and Satisfaction – Build employee empowerment and job satisfaction programs and educational efforts to reduce stress, burnout and voluntary turnover.
  • Organization Development — Identify and train future organizational leaders, develop fair and legal compensation practices and promotion policies.
  • Change Management – Work as a consultant during periods of downsizing or acquisitions, manage a company’s culture and create fair and efficient hiring methods.

In the real world, that means someone trained in industrial-organizational psychology can have an impact on nearly every part of an organization.

“There really is no part of the workplace that is not focused on,” MacCarty said. “If there is any issue that may be hampering an organization from moving forward, an IOP can help alleviate the issue, or at least mitigate it.”

To have an impact on so many parts of a company or organization, IOPs use psychological principles in their everyday work, MacCarty said.

To develop training programs, an IOP uses their understanding of cognition and learning, interpersonal relationships and the impact of employees’ prior learning.

By understanding intrinsic and extrinsic motivation, employees’ expectations can help a company keep employees satisfied and productive.

MacCarty offered an example of a company whose revenues dipped and had to eliminate annual raises, causing a productivity decline and financial hardships for some employees. An IOP can assess that climate and develop other incentives to employees, such as flex-time programs, recognition awards or 4-day week schedules.

“An IOP can look at the situation and come up with some concrete ideas, ways to improve employee motivation and overcome the disappointment felt by employees because they did not get raises,» MacCarty said.

Industrial-Organizational Case Studies

On its website, SIOP includes a case study as a way to illustrate how the principles of industrial-organizational psychology can impact a business. It describes some of the challenges the automotive parts chain Advance Auto Parts encountered at its nationwide network of 9 distribution centers and more than 3,000 retail stores.

The company’s “material handler” positions worked in a fast-paced and physically demanding environment. The company was experiencing high turnover, was relying too much on on-the-job training and wasn’t ensuring the individuals they hired as material handlers were well-suited for the job, according to the SIOP case study.

Industrial-organizational psychologists were able to design an online assessment that evaluated potential hires for key traits, including attention to detail and adaptability, among other factors. Once fully implemented, supervisors ranked new employees who scored well on the assessment as more effective employees, and the system was credited with:

  • Improving retention at 90 days by 87%
  • Increased job performance by 23%
  • Improved work speed by 8%

Industrial-Organizational Jobs and Salary

You might not have worked at a company that employed an IOP, but it’s very possible you’ve had co-workers trained in industrial-organizational psychology and simply have another job title. Industrial-organizational psychology doesn’t exactly roll off the tongue, but companies still rely on the expertise of IOPs. Other titles you might have as an IOP include:

  • Human Resources Practice Leader
  • Behavioral Scientist
  • Talent Management Specialist
  • Executive Coach
  • Leadership Coach
  • Employment Test Professional
  • Testing Specialist
  • Assessment and Selection Specialist
  • Employment Law Expert
  • Research Analyst

The U.S. Bureau of Labor Statistics (BLS) reported in 2017 that industrial-organizational psychologists earned a median income of about $87,000, and through 2026 the field is expected to grow by 8%.

According to a 2015 SIOP survey of its own membership (about 5,000 of them), the median income for IOP professionals with a master’s degree was $84,500 and was nearly $119,000 for IOPs with a doctorate.

Industrial-organizational psychologists most often work in the scientific research and development services, according to BLS, followed by:

  • Management, scientific and technical consulting services
  • State government (not including schools and hospitals)
  • Colleges, universities and professional schools
  • Private companies and enterprises

How to Become an Industrial-Organizational Psychologist

The first step to becoming an industrial-organizational psychologist is to earn a bachelor’s degree in psychology, and while IOP jobs with a bachelors do exist, they are hard to find. Most people interested in industrial-organizational psychology earn a master’s degree, according to the American Psychology Association, but even more opportunities are available with a doctorate.

Joe Cote is a staff writer at Southern New Hampshire University. Follow him on @JoeCo2323.


Apply Industrial-Organizational Psychology to Your Work

The Basics of Industrial-Organizational Psychology

Industrial-organizational (I/O) psychology focuses on individual behaviors and needs in the workplace and offers solutions to many employee concerns. While the two sides of this field study similar topics, they offer different perspectives and specialized insight to help employers get the most their team.

With the help of I/O psychologists or qualified consultants, employers can improve their workers' well-being, and increase efficiency and productivity in the workplace.

Here's everything you need to know about this field of study.

What is industrial-organizational psychology?

I/O psychology is the use of psychological sciences, principles and research tactics to solve workplace and business problems, and improve workers' experiences.

I/O psychologists study the working styles of managers and employees, observe and analyze workplace productivity, acclimate themselves with the company environment in question, and collaborate with management teams to devise new company policies, organize training sessions, and come up with a long-term business plan.

What does an industrial-organizational psychologist do?

To achieve their many goals, I/O psychologists may do some or all of the following actions:

  • Collaborate with company human resource teams
  • Work with hiring and management teams to find additional qualified employees
  • Encourage and train company workers
  • Analyze workers' job performance
  • Improve company efficiency and internal hierarchy
  • Achieve high workplace quality and optimal work-life balance for management and employees
  • Assist in company transitions, including corporate mergers and sales
  • Analyze consumer patterns for better sales results

How to become an industrial-organizational psychologist

Although requirements vary to a small degree by state, a person interested in becoming an I/O psychologist needs a master's degree in psychology to enter the field.

Alternatively, a person with a bachelor's degree in psychology can complete a master's program in social work and still work as an I/O psychologist. Many industrial-organizational psychologists pursue a Ph.D.

in psychology, and others acquire a certification from the American Board of Organizational and Business Consulting Psychology (ABOBCP).

Industrial psychology

The industrial side of I/O psychology «examines specific problems and issues that companies have to deal with,» said J. Michael Crant, professor of management and organization in the Mendoza College of Business at the University of Notre Dame.

Industrial psychologists can help organizations with the following tasks.


Industrial psychologists study a company's culture and work processes, and have a well-educated idea of the type of employee that can work best with the way the business already functions.

Industrial psychologists help with many aspects of the hiring process, including creating interview questions that help hiring managers identify the best candidates for certain positions.

When using industrial psychology for hiring, Amy Cooper Hakim, founder of the Cooper Strategic Group, suggested considering the values, personality and motivation of the applicant. 


To keep things running smoothly, businesses need to make sure their employees have the skills and knowledge they need to do their jobs. Industrial psychologists can identify missing skills among employees and create effective training to help fill these gaps.

Employee efficiency 

By studying human behavior at all levels of the company, industrial psychologists can identify ways to make jobs more efficient and employees more productive for the overall good of the company. This is a major component of many popular management theories from the early 1900s, some of which continue to influence modern management practices.

Organizational psychology

According to Crant, organizational psychology generally addresses bigger-picture issues. Psychologists in this field aim to motivate the workforce and create stronger teamwork, he said.

If you don't feel you're getting everything you could your employees, organizational psychologists may be able to help in the following areas:

Employee satisfaction 

Organizational psychologists study employee behaviors and attitudes to gauge overall employee satisfaction. Using their findings, psychologists suggest changes to improve employees' well-being and happiness at work, which makes for more productive employees.

Work-life balance 

If organizational psychologists find that employees are stressed or unhappy, they may suggest implementing work-life balance programs to ease stress on employees, thereby helping them to produce not just more work, but better work.

Successful work-life balance programs decrease turnover rates and burnout while increasing motivation and commitment.

 [Read related story: 5 Ways to Improve Your Work-Life Balance Today] 

Decreased job stress

A major difference between industrial and organizational psychology concerns the focus of the psychologist.

The industrial side examines the organization in question from management to employees. It is focused on leadership.

Organizational psychology focuses on how employees function and how businesses operate from employees up to management. Organizational psychologists aim to provide helpful suggestions on managerial practices, company organization and other elements that might be creating job stress.

Implementing I/O psychology into your business

If you own a small business and have five to 10 employees, it might not be worth the investment to hire an I/O psychologist. However, for midsize and large businesses, these professionals are a valuable asset if you want to increase the satisfaction and productivity of your employees.

Depending on the scale of your company and the work that you feel needs to be done, a consultant might be a better fit for you.

  • In-house psychologists are the better choice if you have a large, global organization, want to develop ongoing training programs, or need to do long-lasting studies of workplace culture in multiple locations. 
  • I/O consultants are the better choice if you have a smaller organization, only want to study one particular area or department, or need only limited information.

You don't need an on-staff professional to implement I/O psychology into your organization. By conducting personality assessments, you can learn how to work best with your team individual preferences, work styles and behaviors.

Hakim said personality assessments can be used to help screen applicants as a «multiple-hurdle approach» to hiring, or to help develop employees.

Here are six common personality tests you can utilize:

  • DiSC Assessment: This test identifies communication styles in the workplace, and helps employees understand how to more effectively work together and communicate. Learn more about using the DiSC model in this Business News Daily article.
  • Myers-Briggs: Also known as the MBTI, this test categorizes you as one of 16 personality types to help you understand how you perceive the world and why you make decisions. Though this is a popular test, there is some controversy surrounding it, according to Crant, since it doesn't always produce the same results when someone takes the test multiple times.
  • Predictive Index: The Predictive Index, or PI, is a short, simple test that helps you understand your employees' behaviors at work. This test can help you align goals and improve efficiency.
  • Five-Factor Model of Personality: The FFM separates people into the «big five» traits – extraversion, agreeableness, conscientiousness, neuroticism and openness to experience.
  • Occupational interest inventories (OIIs): OIIs identify employees' interests in the workplace, helping you understand their preferred assignments and roles. This aids in task delegation and employee retention.
  • Situational judgment tests (SJTs): SJTs use stimulated situations to test how workers would react in a given circumstance. their response, you can gauge their customer service skills and confront any possible flaws in their approach.

These tests aren't suited for every organization, and attempting to analyze the results of any personality tests on your own, without the help of a professional, can lead to controversy and misunderstandings.

Consult a professional psychologist before you administer or share the results of any personality tests in your workforce.

You can learn more about I/O psychology and find qualified professionals by visiting the Society for Industrial and Organizational Psychology. 

Sammi Caramela contributed to the reporting and writing in this article. Some source interviews were conducted for a previous version of this article.


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