The Basics of Industrial-Organizational Psychology

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Industrial-organizational psychology is the branch of psychology that applies psychological theories and principles to organizations. Often referred to as I-O psychology, this field focuses on increasing workplace productivity and related issues such as the physical and mental well-being of employees.

Industrial-organizational psychologists perform a wide variety of tasks, including studying worker attitudes and behavior, evaluating companies, and conducting leadership training. The overall goal of this field is to study and understand human behavior in the workplace.

What Industrial-Organizational Psychology Is

You can think of industrial-organizational psychology as having two major sides. First, there is the industrial side, which involves looking at how to best match individuals to specific job roles. This segment of I-O psychology is also sometimes referred to as personnel psychology.

People who work in this area might assess employee characteristics and then match these individuals to jobs in which they are likely to perform well. Other functions that fall on the industrial side of I-O psychology include training employees, developing job performance standards, and measuring job performance.

The organizational side of psychology is more focused on understanding how organizations affect individual behavior. Organizational structures, social norms, management styles, and role expectations are all factors that can influence how people behave within an organization.

By understanding such factors, I-O psychologists hope to improve individual performance and health while at the same time benefiting the organization as a whole.

How Is It Different?

While industrial-organizational psychology is an applied field, basic theoretical research is also essential. With roots in experimental psychology, I-O psychology has a number of different sub-areas such as human-computer interaction, personnel psychology, and human factors.

Six Key Subject Areas

According to Muchinsky's book, Psychology Applied to Work: An Introduction to Industrial and Organizational Psychology, most industrial-organizational psychologists work in one of six major subject areas:

  • Training and Development: Professional in this area often determine what type of skills are necessary to perform specific jobs as well as develop and evaluate employee training programs.
  • Employee Selection: This area involves developing employee selection assessments, such as screening tests to determine if job applicants are qualified for a particular position.
  • Ergonomics: The field of ergonomics involves designing procedures and equipment designed to maximize performance and minimize injury.
  • Performance Management: I-O psychologists who work in this area develop assessments and techniques to determine if employees are doing their jobs well.
  • Work Life: This area focuses on improving employee satisfaction and maximizing the productivity of the workforce. I-O psychologists in this area might work to find ways to make jobs more rewarding or design programs that improve the quality of life in the workplace.
  • Organizational Development: I-O psychologists who work in this area help improve organizations, often through increasing profits, redesigning products, and improving the organizational structure.

Major Topics

  • Product design. Some I-O psychologists are involved in the development of consumer or workplace products.
  • Employee testing. Psychological principles and tests are often used by I-O psychologists to help businesses select candidates that are best-suited to specific job roles.
  • Leadership. I-O psychologists may work to help leaders develop better strategies or train managers to utilize different leadership skills to manage team members more effectively.
  • Workplace diversity. Within the area of organizational psychology, professionals in this field may help businesses develop hiring practices that foster greater diversity as well as train employees on diversity and inclusion.
  • Workplace performance. I-O psychologists often study behavior in the workplace in order to design environments and procedures that maximize employee performance.
  • Employee motivation. Professionals in this field may also use psychological principles to help keep workers motivated.

Important People in IO Psychology History

  • Hugo Münsterberg: Munsterberg was an applied psychologist who wrote an early text on how psychology could be used for industrial, occupational, and organizational purposes. His work had an important impact on the early development of the field. 
  • Frederick W. Taylor: Taylor was a mechanical engineer who published an influential book on improving industrial efficiency. 
  • Robert Yerkes: Yerkes was a psychologist known for his work in the field of intelligence testing. He developed the Alpha and Beta Intelligence Tests for the U.S. Army, which were use to evaluate military recruits during WWI. Scores on the tests were used to determine respondent's capabilities, including ability to serve and leadership potential.
  • James McKeen Cattell: Cattell was an early proponent of looking at how individual differences influence human behavior. 
  • Kurt Lewin: Lewin was an influential applied psychologist who described a number of leadership styles that people may exhibit. His work also focused on looking at all of the forces that influence a situation rather than just taking individual behavior into account. 

Careers in IO Psychology

The U.S. Bureau of Labor Statistics predicted that I-O psychology would be one of the fastest-growing careers, and wages have been rising over 10 percent per year.

According to employment statistics from the Bureau of Labor Statistics, the mean annual wage for I-O psychologists as of May 2016 was $109,030. The bottom 10 percent of I-O psychologists earned around $51,350 and the top 10 percent earned an average of $184,380, with a median annual wage of $192,150.

As with other specialty areas, wages vary depending upon a variety of factors including geographic location, educational background, the area of employment, and years of experience in the field. Individuals with a master's or doctorate degree also command higher yearly salaries.

In general, those in large urban areas will find more employment opportunities as well as higher wages, although such benefits are often accompanied by a higher cost of living. States employing the most I-O psychologists include Virginia, Massachusetts, Pennsylvania, Missouri, and New Jersey. Professionals working in Virginia earned an average of $126,220, while those employed in Massachusetts earned an average of $75,660.

The U.S. Department of Labor reports that wages also vary considerably depending upon the industry in which industrial-organizational psychologists are employed. The mean annual wage for various industries is as follows:

  • Scientific Research and Development Services: $149,780
  • Management, Scientific, and Technical Consulting Services: $95,470
  • State Government: $66,600
  • Colleges, Universities, and Professional School: $70,360

Who Should Study Industrial-Organizational Psychology?

Students who are interested in applying psychological principles to real-world setting should consider industrial-organizational psychology. If you have a strong interest in psychology as well as related subjects such as product design, computers, statistics, and engineering, this may be the ideal field for you.

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Article Sources

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  1. Muchinsky PM. Psychology Applied to Work, An Introduction to Industrial and Organizational Psychology. Thomson Wadsworth; 2006.

  2. Bureau of Labor Statistics. Industrial-Organizational Psychologists. Occupational Employment Statistics.

Additional Reading

  • Bureau of Labor Statistics. Industrial-Organizational Psychologists. Occupational Employment Statistics.
  • Hockenbury SE, Hockenbury DH. Discovering Psychology. New York: Worth Publishers; 2016.
  • Muchinsky PM. Psychology Applied to Work: An Introduction to Industrial and Organizational Psychology. Summerfield (N.C.): Hypergraphic Press; 2009.