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Industrial and organizational psychology (also known as I-O psychology, industrial-organizational psychology, work psychology, organizational psychology, work and organizational psychology, industrial psychology, occupational psychology, personnel psychology or talent assessment) applies psychology to organizations and the workplace. Industrial-organizational psychologists contribute to an organization's success by improving the performance and well-being of its people. An I-O psychologist researches and identifies how behaviors and attitudes can be improved through hiring practices, training programs, and feedback systems.[1]
Guion (1965) defines I-O psychology as "the scientific study of the relationship between man and the world of work:... in the process of making a living" (p. 817). Blum and Naylor (1968) define it as "simply the application or extension of psychological facts and principles to the problems concerning human beings operating within the context of business and industry" (p. 4). I-O psychology has historically subsumed two broad areas of study, as evident by its name, although this distinction is largely artificial and many topics cut across both areas. It has roots in social psychology; organizational psychologists examine the role of the work environment in performance and other outcomes including job satisfaction and health. I-O psychology is also represented by Division 14 of the American Psychological Association.
Common research and practice areas for I-O psychologists include:
I-O psychologists are trained in the "scientist-practitioner" model. The training enables I-O psychologists to employ scientific principles and research-based designs to generate knowledge. They use what they have learned in applied settings to help clients address workplace needs. I-O psychologists are employed as professors, researchers, and consultants. They also work within organizations, often as part of a human resources department where they coordinate hiring and organizational development initiatives from an evidence-based perspective.
The "industrial" side of I-O psychology has its historical origins in research on individual differences, assessment, and the prediction of performance. This branch of the field crystallized during World War I, in response to the need to rapidly assign new troops to duty stations. After the War the growing industrial base in the US added impetus to I-O psychology. Walter Dill Scott, who was elected President of the American Psychological Association (APA) in 1919, was arguably the most prominent I-O psychologist of his time, although James McKeen Cattell (elected APA President in 1895) and Hugo Münsterberg (1898) were influential in the early development of the field.[2] Organizational psychology gained prominence after World War II, influenced by the Hawthorne studies and the work of researchers such as Kurt Lewin and Muzafer Sherif.
As described above, I-O psychologists are trained in the scientist-practitioner model. I-O psychologists rely on a variety of methods to conduct organizational research. Study designs employed by I-O psychologists include surveys, experiments, quasi-experiments, and observational studies. I-O psychologists rely on diverse data sources including human judgments, historical databases, objective measures of work performance (e.g., sales volume), and questionnaires and surveys.
I-O researchers employ both quantitative and qualitative research methods. Quantitative methods used in I-O psychology include both descriptive statistics and inferential statistics (e.g., correlation, multiple regression, and analysis of variance). More advanced statistical methods employed by some I-O psychologists include logistic regression, multivariate analysis of variance, structural equation modeling,[3] and hierarchical linear modeling[4] (HLM; also known as multilevel modeling). HLM is particularly applicable to research on team- and organization-level effects on individuals. I-O psychologists also employ psychometric methods including methods associated with classical test theory[5] (CTT), generalizability theory, and item response theory (IRT).[6] In the 1990s, a growing body of empirical research in I-O psychology was influential in the application of meta-analysis, particularly in the area of the stability of research findings across contexts. The most well-known meta-analytic approaches are those associated with Hunter and Schmidt,[7][8][9] Rosenthal,[10][11] and Hedges and Olkin.[12] With the help of meta-analysis, Hunter and Schmidt[13][14] advanced the idea of validity generalization, which suggests that some performance predictors, specifically cognitive ability tests (see especially Hunter [1986][15] and Hunter & Schmidt [1996][16]) have a relatively stable and positive relation to job performance across all jobs. Although not unchallenged, validity generalization has broad acceptance with regard to many selection instruments (e.g., cognitive ability tests, job knowledge tests, work samples, and structured interviews) across a broad range of jobs. Qualitative methods employed in I-O psychology include content analysis, focus groups, interviews, case studies, and several other observational techniques. I-O research on organizational culture research has employed ethnographic techniques and participant observation to collect data. One well-known qualitative technique employed in I-O psychology is John Flanagan's[17] Critical Incident Technique, which requires "qualified observers" (e.g., pilots in studies of aviation, construction workers in studies of construction projects) to describe a work situation that resulted in a good or bad outcome. Objectivity is ensured when multiple observers identify the same incidents. The observers are also asked to provide information about what the actor in the situation could have done differently to influence the outcome. This technique is then used to describe the critical elements of performance in certain jobs and how worker behavior relates to outcomes. Most notably, this technique has been employed to improve performance among aircraft crews and surgical teams, literally saving thousands of lives since its introduction. An application of the technique in research on coping with job stress comes from O'Driscoll and Cooper.[18]
I-O psychologists sometimes use quantitative and qualitative methods in concert. For example, when constructing behaviorally anchored rating scales (BARS), a job analyst may use qualitative methods, such as critical incidents interviews and focus groups to collect data bearing on performance. Then the analyst would have SMEs rate those examples on a Likert scale and compute inter-rater agreement statistics to judge the adequacy of each item. Each potential item would additionally be correlated with an external criterion in order to evaluate its usefulness if it were to be selected to be included in a BARS metric.
Job analysis is often described as the cornerstone of successful employee selection efforts and performance management initiatives. A job analysis involves the systematic collection of information about a job. Job-analytic methods are often described as belonging to one of two approaches. One approach, the task-oriented job analysis, involves an examination of the duties, tasks, and/or competencies required by a job. The second approach, a worker-oriented job analysis, involves an examination of the knowledge, skills, abilities, and other characteristics (KSAOs) required to successfully perform the work. These two approaches are not mutually exclusive. Various adaptations of job-analytic methods include competency modeling, which examines large groups of duties and tasks related to a common goal or process, and practice analysis, which examines the way work is performed in an occupation across jobs.
Job-analytic data are often collected using a variety of quantitative and qualitative methods. The information obtained from a job analysis is then used to create job-relevant selection procedures, performance appraisals and criteria, or training programs. Additional uses of job-analytic information include job evaluations for the purpose of determining compensation levels and job redesign.
I-O psychologists typically work with HR specialists to design (a) recruitment processes and (b) personnel selection systems. Personnel recruitment is the process of identifying qualified candidates in the workforce and getting them to apply for jobs within an organization. Personnel recruitment processes include developing job announcements, placing ads, defining key qualifications for applicants, and screening out unqualified applicants.
Personnel selection is the systematic process of hiring and promoting personnel. Personnel selection systems employ evidence-based practices to determine the most qualified candidates. Personnel selection involves both new hires and individuals who can be promoted from within the organization. Common selection tools include ability tests (e.g., cognitive, physical, or psychomotor), knowledge tests, personality tests, structured interviews, the systematic collection of biographical data, and work samples. I-O psychologists must evaluate evidence regarding the extent to which selection tools predict job performance, evidence that bears on the validity of selection tools.
Personnel selection procedures are usually validated, i.e., shown to be job relevant, using one or more of the following types of validity: content validity, construct validity, and/or criterion-related validity. I-O psychologists adhere to professional standards, such as the Society for Industrial and Organizational Psychology's (SIOP) Principles for Validation and Use of Personnel Selection Procedures[19] and the Standards for Educational and Psychological Testing.[20] The Equal Employment Opportunity Commission's Uniform Guidelines[21] are also influential in guiding personnel selection although they have been criticized as outdated when compared to the current state of knowledge in I-O psychology.
Performance appraisal or performance evaluation is the process of measuring an individual's work behaviors and outcomes against the expectations of the job. Performance appraisal is frequently used in promotion and compensation decisions, to help design and validate personnel selection procedures, and for performance management. Performance management is the process of providing performance feedback relative to expectations and improvement information (e.g., coaching, mentoring). Performance management may also include documenting and tracking performance information for organization-level evaluation purposes.
An I-O psychologist would typically use information from the job analysis to determine a job's performance dimensions, and then construct a rating scale to describe each level of performance for the job. Often, the I-O psychologist would be responsible for training organizational personnel how to use the performance appraisal instrument, including ways to minimize bias when using the rating scale, and how to provide effective performance feedback. Additionally, the I-O psychologist may consult with the organization on ways to use the performance appraisal information for broader performance management initiatives.
Individual assessment involves the measurement of individual differences. I-O psychologists perform individual assessments in order to evaluate differences among candidates for employment as well as differences among employees. The constructs measured pertain to job performance. With candidates for employment, individual assessment is often part of the personnel selection process. These assessments can include written tests, physical tests, psychomotor tests, personality tests, work samples, and assessment centers.
Psychometrics is the science of measuring psychological variables, such as knowledge, skills, and abilities. I-O psychologists are generally well-trained in psychometric psychology.
Compensation includes wages or salary, bonuses, pension/retirement contributions, and perquisites that can be converted to cash or replace living expenses. I-O psychologists may be asked to conduct a job evaluation for the purpose of determining compensation levels and ranges. I-O psychologists may also serve as expert witnesses in pay discrimination cases when disparities in pay for similar work are alleged.
Most people hired for a job are not already versed in all the tasks required to perform the job effectively. Similar to performance management (see above), an I-O psychologist would employ a job analysis in concert with principles of instructional design to create an effective training program. A training program is likely to include a summative evaluation at its conclusion in order to ensure that trainees have met the training objectives and can perform the target work tasks at an acceptable level. Training programs often include formative evaluations to assess the impact of the training as the training proceeds. Formative evaluations can be used to locate problems in training procedures and help I-O psychologist make corrective adjustments in the while the training is ongoing.
Motivation is a positive drive that forces a person to reach the goal. In a workplace the manager or supervisor has to know the needs or drive of individual and motivate according to it. In an organization, when an employee is doing good job or production is increased by him, he must be rewarded with respect to his needs.
Organizational culture can be described as a set of assumptions shared by the individuals in an organization that directs interpretation and action by defining appropriate behavior for various situations. There are three levels of organizational culture: artifacts, shared values, and basic beliefs and assumptions. Artifacts comprise the physical components of the organization that relay cultural meaning. Shared values are individuals' preferences regarding certain aspects of the organization's culture (e.g. loyalty, customer service). Basic beliefs and assumptions include individuals' impressions about the trustworthiness and supportiveness of an organization, and are often deeply ingrained within the organization's culture.
In addition to an overall culture, organizations also have subcultures. Examples of subcultures include corporate culture, departmental culture, local culture, and issue-related culture. While there is no single "type" of organizational culture, some researchers have developed models to describe different organizational cultures.
Organizational culture has been shown to have an impact on important organizational outcomes such as performance, attraction, recruitment, retention, employee satisfaction, and employee well-being. Also, organizations with an adaptive culture tend to perform better than organizations with an unadaptive culture.
Group behavior is the interaction between individuals of a collective and the processes such as opinions, attitudes, growth, feedback loops, and adaptations that occur and change as a result of this interaction.[22] The interactions serve to fulfill some need satisfaction of an individual who is part of the collective and helps to provide a basis for his interaction with specific members of the group.[23]
A specific area of research in group behavior is the dynamics of teams. Team effectiveness refers to the system of getting people in a company or institution to work together effectively. The idea behind team effectiveness is that a group of people working together can achieve much more than if the individuals of the team were working on their own.
Job satisfaction reflects an employee's overall assessment of their job particularly their emotions, behaviors, and attitudes about their work experience. It is one of the most heavily researched topics in industrial/organizational psychology with several thousand published studies. Job satisfaction has theoretical and practical utility for the field of psychology and has been linked to important job outcomes including attitudinal variables, absenteeism, employee turnover, and job performance. For instance, job satisfaction is strongly correlated with attitudinal variables such as job involvement, organizational commitment, job tensions, frustration, and feelings of anxiety. Job satisfaction also has a weak correlation with employee's absentee behaviors and turnover from an organization with employees more likely to miss work or find other jobs if they are not satisfied. Finally, research has found that although a positive relationship exists between job satisfaction and performance, it is moderated by the use of rewards at an organization and the strength of employee's attitudes about their job.
Productive behavior is defined as employee behavior that contributes positively to the goals and objectives of an organization.[23] When an employee begins a new job, there is a transition period during which he or she is not contributing positively to the organization. To successfully transition from being an outsider to a full-fledged member of an organization, an employee typically needs job-related training as well as more general information about the culture of the organization. In financial terms, productive behavior represents the point at which an organization begins to achieve some return on the investment it has made in a new employee. There are three common forms of productive behavior in organizations: job performance, organizational citizenship behavior (OCB), and innovation.
Job performance represents behaviors employees engage in while at work which contribute to organizational goals.[24] These behaviors are formally evaluated by an organization as part of an employee’s responsibilities. In order to understand and ultimately predict job performance, it is important to be precise when defining the term. Job performance is about behaviors that are within the control of the employee and not about results (effectiveness), the costs involved in achieving results (productivity), the results that can be achieved in a period of time (efficiency), or the value an organization places on a given level of performance, effectiveness, productivity, or efficiency (utility).
To model job performance, researchers have attempted to define a set of dimensions that are common to all jobs. Using a common set of dimensions provides a consistent basis for assessing performance and enables the comparison of performance across jobs. While there is disagreement about the exact dimensions of job performance, there is agreement on two major categories of job performance: in-role (technical aspects of a job) and extra-role (non-technical abilities such as communication skills and being a good team member).
To assess job performance, reliable and valid measures must be established. The most commonly used measures are ratings of employee performance on specific tasks and on overall job performance. While there are many sources of error with performance ratings, error can be reduced through rater training and through the use of behaviorally anchored ratings scales. Such scales can be used to clearly define the behaviors that constitute poor, average, and superior performance. Additional factors that complicate the measurement of job performance include the instability of job performance over time and the restriction of variation in individual performance by organizational forces.
The determinants of job performance consist of factors having to do with the individual worker as well as environmental factors in the workplace. According to Campbell’s Model of The Determinants of Job Performance[24].[25], job performance is a result of the interaction between declarative knowledge (knowledge of facts or things), procedural knowledge (knowledge of what needs to be done and how to do it), and motivation (reflective of an employee’s choices regarding whether to expend effort, the level of effort to expend, and whether to persist with the level of effort chosen). Regardless of the job, three determinants stand out as predictors of performance: (1) general mental ability (especially for jobs higher in complexity), (2) job experience (although there is a law of diminishing returns), and (3) the personality trait of conscientiousness (people who are dependable and achievement oriented, who plan well). These determinants appear to influence performance largely through the acquisition and usage of job knowledge and the motivation to do well.
Organizational citizenship behavior (OCB) refers to productive behaviors that are not part of an employees’ formal job description. There are five categories of organizational citizenship behaviors: (1) altruism, (2) courtesy, (3) sportsmanship, (4) conscientiousness, and (5) civic virtue.[26].[27]
There are three different explanations for why employees engage in organizational citizenship behavior. The first has to do with positive affect, an overall positive mood increases the frequency of helping behavior. The second explanation, which stems from the equity theory, is that employees reciprocate fair treatment that they have received from the organization. The third explanation is that some employees have personality traits that predispose them to participate in organizational citizenship behavior. There are also employees who will perform organizational citizenship behavior to influence how they are viewed within the organization. While these behaviors are not formally part of the job description, performing them can certainly influence performance appraisals.[23]
Innovation is a form of productive behavior that employees exhibit when they come up with novel ideas that further the goals of the organization.[23] Innovation at an individual level is dependent on task-relevant skills (general mental ability and job specific knowledge), creativity-relevant skills (ability to concentrate on a problem for long periods of time, to abandon unproductive searches, and to temporarily put aside stubborn problems), and task motivation (internal desire to perform task and level of enjoyment).[28]
There are things that organizations can do in order to breed innovation in the workplace. Some of these items include providing creativity training, having leaders encourage and model innovation, allowing employees to question current procedures and rules, seeing that the implementation of innovations had real consequences, documenting innovations in a professional manner, allowing employees to have autonomy and freedom in their job roles, reducing the number of obstacles that may be in the way of innovation, and giving employees access to resources (whether these are monetary, informational, or access to key people inside or outside of the organization).[23]
Counterproductive behavior can be defined as employee behavior that goes against the goals of an organization. These behaviors can be intentional or unintentional and result from a wide range of underlying causes and motivations. It has been proposed that a person-by-environment interaction can be utilized to explain a variety of counter-productive behaviors (Fox and Spector, 1999). For instance, an employee who steals from the company may do so because of lax supervision (environment) and underlying psychopathology (person) that work in concert to result in the counterproductive behavior.
The forms of counterproductive behavior with the most empirical examination are ineffective job performance, absenteeism, job turnover, and accidents. Less common but potentially more detrimental forms of counterproductive behavior have also been investigated including theft, violence, substance use, and sexual harassment.
Leadership is a process of influencing and supporting and motivating others to work enthusiastically or effectively towards achieving the objectives or goal. A leader acts as a catalyst, who identifies the potential of a worker and tries to put that into reality. A leader can be a positive leader or a negative leader.
A leader’s influence within an organization or group has been said to stem from two primary sources, that person’s personal characteristics and their position within the organization. Personal power, also made up of two factors called expert power and referent power, is derived from elements like an individual’s personality, their knowledge base, their ability to effectively interact with others, and their demonstrated level of effort. Positional power, also often referred to as legitimate power, is derived from the leader’s position within the organization, and the authority imbued in them either directly or indirectly by the organization’s controlling parties to provide either rewards or sanctions for performance.[29]
The leader’s role is to use this influence to encourage those within the organization to focus their actions toward the accomplishment of the organization’s goals. [30] Distinction should be noted between management v. leadership. Managers process administrative tasks that organize work environments. Leaders conduct those same tasks while also inspiring and motivating the workforce for which they oversee. Managers cope with complexity, leaders cope with change. Managers participate in stepwise tasks of planning and budgeting, organizing and staffing, and controlling and problem solving. In contrast, leaders approach these stages of business development through equivalent tasks of setting a direction or vision, aligning people or communication, and motivating and inspiring, respectively. [31]
A separate but related discipline, occupational health psychology (OHP) is a relatively new field that combines elements of industrial-organizational psychology, health psychology, and occupational health.[32] Unlike I-O psychology, the primary emphasis in OHP is on the physical and mental health and psychological well-being of the person. For more detail on OHP, see the section on occupational health psychology.
A comprehensive list of US and Canadian master's and doctoral programs can be found at the web site of the Society for Industrial and Organizational Psychology (SIOP).[33] Some helpful ways to learn about graduate programs include visiting the web sites on the SIOP list and speaking to I-O faculty at the institutions listed. Admission into I-O psychology Ph.D. programs is highly competitive given that many programs accept a small number of applicants every year.
There are graduate degree programs in I-O psychology outside of the US and Canada. The SIOP web site[33] also provides a comprehensive list of I-O programs in many other countries.
According to the Bureau of Labor Statistics (2007), the job outlook for industrial-organizational psychologists is promising. Businesses enlist the services of these psychologists in order to retain employees and maintain a good work ethic. I-O psychologists specializing in research often conduct studies within companies to aid in marketing research.
In 2006, the median annual salary for industrial-organizational psychologists was $86,420(US).[34]