The Basics of Industrial-Organizational Psychology

Industrial-organizational psychology

Verywell / James Bascara


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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 Is Industrial-Organizational Psychology?

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.

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:

  • 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.
  • Organizational development: I-O psychologists who work in this area help improve organizations, often through increasing profits, redesigning products, and improving the organizational structure.
  • Performance management: I-O psychologists who work in this area develop assessments and techniques to determine if employees are doing their jobs well.
  • 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.
  • 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.

Industrial-Organizational Psychology Topics

Here are some of the specific topics addressed by industrial-organizational psychology experts:

  • Employee motivation: Professionals in this field may also use psychological principles to help keep workers motivated.
  • 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.
  • Product design: Some I-O psychologists are involved in the development of consumer or workplace products.
  • 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.

Important People in IO Psychology History

There have been several prominent figures in the field of IO Psychology, including:

  • Frederick W. Taylor: Taylor was a mechanical engineer who published an influential book on improving industrial efficiency.
  • 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. 
  • 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.
  • 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.

Careers in IO Psychology

Interest in industrial-organizational psychology careers has grown.

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% of I-O psychologists earned around $51,350 and the top 10% 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:

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

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.

2 Sources
Verywell Mind uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  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.

By Kendra Cherry
Kendra Cherry, MS, is the author of the "Everything Psychology Book (2nd Edition)" and has written thousands of articles on diverse psychology topics. Kendra holds a Master of Science degree in education from Boise State University with a primary research interest in educational psychology and a Bachelor of Science in psychology from Idaho State University with additional coursework in substance use and case management.