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Industrial & Organisational : Introduction : Personnel : Organizational psychology : Occupations: Work environment: Index : Outline

Industrial and organisational psychology (also known as I-O psychology or work psychology) is the scientific study of employees, workplaces, and organizations. Industrial and organizational psychologists contribute to an organization's success by improving the performance, satisfaction, and well-being of its employees. An I-O psychologist conducts research on employee behaviors and attitudes, and how these can be improved through hiring practices, training programs, feedback, and management systems.[1] I-O psychologists also help organizations transition among periods of change and development. Industrial and organizational psychology is related to organizational behavior and human capital.

An applied science, I–O psychology is represented by Division 14 of the American Psychological Association, known formally as the Society for Industrial and Organizational Psychology (SIOP).

In the UK, I-O psychology is known as Occupational Psychology and is represented by the Division of Occupational Psychology within the British Psychological Society.



In classic overviews of the field, 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 & 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).

Research and practice areas of I–O psychologists include, but are not limited to the following:

The formal academic training at U.S. accredited institutions can, for an individual who graduates a university with a B.A., M.A., Ph.D., or a Psy.D. in Industrial and Organizational Psychology, have focused on either the scientific side for those who want to pursue research or university teaching as a career, or have concentrated on a practitioner system, which is suitable for individuals whose major career target is not academic teaching or scientific research. The latter is a good appointment for individuals who prefer the hands-on application of the scientific theory developed in academia.

The expertise of I–O Psychologists allows them to employ scientific principles and research-based designs to generate new knowledge and applications for improving organizations. The latter are often in an employer role or at least in a role as close advisers to or influencers of employers' systems in many industries and sectors of the economy.

They also work within organizations, often as advisers to or members of human resources departments, corporate boards, government legislative bodies, and government agencies.


The historical development of I-O psychology had parallel developments in the United States and other countries, such as Britain,[2] Australia, Germany, the Netherlands,[3] and eastern European countres such as Romania.[4] However, many foreign countries do not have a published English-language account of their development of I-O psychology. The roots of I-O psychology trace back nearly to the beginning of psychology as a science when Wilhelm Wundt founded one of the first psychological laboratories in 1876 in Leipzig, Germany. In the mid 1880s, Wundt trained two psychologists who had a major influence on the eventual emergence of I-O Psychology: Hugo Munsterberg and James McKeen Cattell.[5] Instead of viewing differences as “errors”, Cattell was one of the first to recognize the importance of these differences among individuals as a way of predicting and better understanding their behavior. Walter Dill Scott, who was a contemporary of Cattell, was elected President of the American Psychological Association (APA) in 1919, was arguably the most prominent I–O psychologist of his time. Scott, along with Walter Van Dyke Bingham worked at the Carnegie Institute developing methods for selecting and training sales personnel [6] The "industrial" side of I–O psychology has its historical origins in research on individual differences, assessment, and the prediction of work performance.This branch crystallized during World War I, in response to the need to rapidly assign new troops to duty stations. Scott and Bingham volunteered to help with the testing and placement of more than a million army recruits. In 1917, together, along with other prominent psychologists, adapted a well-known intelligence test, (the Stanford-Binet test, designed for testing one individual at a time) to make it suitable for mass group testing. This new test form was called the Army Alpha. After the War, the growing industrial base in the US added impetus to I–O psychology. The private industry set out to emulate the successful testing of army personnel, and mental ability testing soon became a commonplace in the work setting. Industrial psychology began to gain prominence when Elton Mayo arrived in the United States in 1924.[7] Mayo was fascinated by not the efficiency of workers, but their emotions and how work may cause workers to act in particular pathological ways. These observations of workers’ thoughts and emotions were studied to see how prone employees would be to resist management attempts to increase productivity and how sympathetic to labor unions they would become. These studies are known as Hawthorne studies. The results of these studies ushered in a radically new movement known as the Human Relations Movement. This movement was interested in the more complicated theories of motivation, the emotional world of the worker, job satisfaction, and interviews with workers.

World War II brought in new problems that led to I-O Psychology's continued development. The war brought renewed interest in ability testing (to accurately place recruits in these new technologically advanced military jobs), the introduction of the assessment center, concern with morale and fatigue of war industry workers, and military intelligence. Post-Second World War years were a boom time for industry with many jobs to be filled and applicants to be tested. Interestingly, however, when the war ended and the soldiers came back to work, there was an increasing trend towards labor unrest with rising numbers of authorized and unauthorized work stoppages staged by unions and workers. This caused management to grow concern about work productivity and worker attitude surveys became of much interest in the field. Following Industrial Organizational Psychology's admission into Division 14 of the American Psychological Association, there continued to be an influx of new tests for selection, productivity, and workforce stability. This influx continued unabated until the passage of the Civil Rights Act of 1964. Section, Title VII dealt with employment discrimination and required employers to justify and show relevance for the use of tests for selection.

The mid-1960s seemed to mark a line of demarcation between "classic" and "modern" thinking. During this period, the name changed from just industrial psychology to industrial and organizational psychology. The earlier periods addressed work behavior from the individual perspective, examining performance and attitudes of individual workers. Although this was a valuable approach, it became clear that there were other, broader influences not only on individual, but also on group behavior in the work place. Thus, in 1973, "organizational" was added to the name to emphasize the fact that when an individual joins an organization (e.g., the organization that hired him or her), he or she will be exposed to a common goal and a common set of operating procedures.

Research methods

See also: psychometrics and statistics

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,[8] and hierarchical linear modeling (HLM; also known as multilevel modeling).[9] 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 (CTT),[10] generalizability theory, and item response theory (IRT).[11] 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 & Schmidt,[12][13][14] Rosenthal,[15][16] and Hedges & Olkin.[17] With the help of meta-analysis, Hunter & Schmidt[18][19] advanced the idea of validity generalization, which suggests that some performance predictors, specifically cognitive ability tests (see especially Hunter [1986][20] and Hunter & Schmidt [1996][21]) 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 Critical Incident Technique,[22] 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 & Cooper.[23] The resistance to qualitative research resulted from viewing it too excessively subjective. This concern, however, is misplaced due to all methods of research, either qualitative or quantitative, ultimately requiring some sort of interpretation. When a researcher is developing and researching a phenomenon, all information available should be used, regardless of its form. The key is triangulation, which is an approach looking for converging information from different sources to develop that theory.[24]

I–O psychologists sometimes use quantitative and qualitative methods in concert. The two are not mutually exclusive [24] 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. As a simpler example, consider an extended observation of a worker, which might include videotaped episodes of performance - a qualitative measure. The qualitative video could easily be used to develop a frequency count of a particular behavior - a quantitative measure.


Job analysis

Main article: Job analysis

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 is 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.

Personnel recruitment and selection

Main article: Personnel selection

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 the newly hired 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[25] and the Standards for Educational and Psychological Testing.[26] The Equal Employment Opportunity Commission's Uniform Guidelines[27] 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.

I–O psychologists not only help in the selection and assessment of personnel for jobs, but also assist in the selection of students for admission to colleges, universities, and graduate and professional schools as well as the assessment of student achievement, student aptitude, and the performance of teachers and K–12 schools. Increasingly, I–O psychologists are working for educational assessment and testing organizations and divisions.

A meta-analysis of selection methods in personnel psychology found that general mental ability was the best overall predictor of job performance and training performance.[28]

Performance appraisal/management

Main article: Performance appraisal

Performance appraisal or performance evaluation is the process of measuring an individual's or a group's work behaviors and outcomes against the expectations of the job.[29] 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 and psychometrics

Main article: Psychometrics

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.[30] 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.[30]

Psychometrics is the science of measuring psychological variables, such as knowledge, skills, and abilities. I–O psychologists are generally well-trained in psychometric psychology.

Remuneration and compensation

Main article: Remuneration

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.

Training and training evaluation

Main article: Training

Training is the systematic acquisition of skills, concepts, or attitudes that results in improved performance in another environment.[31] Most people hired for a job are not already versed in all the tasks required to perform the job effectively. Evidence indicates that training is effective and that these training expenditures are paying off in terms of higher net sales and gross proftability per employee.[32] Training can be beneficial for the organization and for employees in terms of increasing their value to their organization as well as their employability in the broader marketplace. Many organizations are using training and development as a way to attract and retain their most successful employees.

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 psychologists make corrective adjustments while the training is ongoing.

The basic foundation for training programs is learning. Learning outcomes can be organized into three broad categories: cognitive, skill-based, and affective outcomes.[33] Cognitive is a type of learning outcome that includes declarative knowledge or the knowledge of rules, fasts, and principles. An example is police officers acquire declarative knowledge about laws and court procedures. Skill-based is a learning outcome that concerns procedural knowledge and the development of motor and technical skills. An example is motor skills that involve the coordination of physical movements such as using a special tool or flying a certain aircraft, whereas technical skills might include understanding a certain software program, or exhibiting effective customer relations behaviors. Affective is a type of learning outcome that includes attitudes or beliefs that predispose a person to behave in a certain way. Attitudes can be developed or changed through training programs. Examples of these attitudes are organizational commitment and appreciation of diversity.[34]

Before training design issues are considered, a careful needs analysis is required to develop a systematic understanding of where training is needed, what needs to be taught or trained, and who will be trained.[31] Training needs analysis typically involves a three step process that includes organizational analysis, task analysis and person analysis.[35] Organizational analysis examines organizational goals, available resources, and the organizational environment to determine where training should be directed. This analysis identifies the training needs of different departments or subunits and systematically assessing manager, peer, and technological support for transfer of training. Organizational analysis also takes into account the climate of the organization and its subunits. For example, if a climate for safety is emphasized throughout the organization or in particular parts of the organization (e.g., production), then training needs will likely reflect this emphasis.[36] Task analysis uses the results from job analysis on determining what is needed for successful job performance and then determines what the content of training should be. Task analysis can consist of developing task statements, determining homogeneous task clusters, and identifying KSAOs (knowledge, skills, abilities, other characteristics) required for the job. With organizations increasingly trying to identify "core competencies" that are required for all jobs, task analysis can also include an assessment of competencies.[37] Person analysis identifies which individuals within an organization should receive training and what kind of instruction they need. Employee needs can be assessed using a variety of methods that identify weaknesses that training and development can address. The needs analysis makes it possible to identify the training program's objectives, which in turn, represents the information for both the trainer and trainee about what is to be learned for the benefit of the organization.

Therefore with any training program it is key to establish specify training objectives. Schultz & Schultz (2010) states that need assessment is an analysis of corporate and individual goals undertaken before designing a training program. Examples of need assessment are based on organizational, task, and work analysis is conducted using job analysis critical incidents, performance appraisal, and self-assessment techniques.[38](p164)

But with any training there are always challenges that one faces. Challenges which I-O psychologists face:[38](p185)

  • To identify the abilities required to perform increasingly complex jobs.
  • To provide job opportunities for unskilled workers.
  • To assist supervisors in the management of an ethnically diverse workforce.
  • To retain workers displaced by changing economic, technological, and political forces.
  • To help organizations remain competitive in the international marketplace.
  • To conduct the necessary research to determine the effectiveness of training programs.

Motivation in the workplace

Main article: Work motivation

Work motivation "is a set of energetic forces that originate both within as well as beyond an individual's being, to initiate work-related behavior, and to determine its form, direction, intensity, and duration"[39] Understanding what motivates an organization's employees is central to the study of I–O psychology. Motivation is a person's internal disposition to be concerned with an approach positive incentives and avoid negative incentives. To further this, an incentive is the anticipated reward or aversive event available in the environment.[40] While motivation can often be used as a tool to help predict behavior, it varies greatly among individuals and must often be combined with ability and environmental factors to actually influence behavior and performance. Because of motivation's role in influencing workplace behavior and performance, it is key for organizations to understand and to structure the work environment to encourage productive behaviors and discourage those that are unproductive.[41] [42]

There is general consensus that motivation involves three psychological processes: arousal, direction, and intensity. Arousal is what initiates action. It is fueled by a person's need or desire for something that is missing from their lives at a given moment, either totally or partially. Direction refers to the path employees take in accomplishing the goals they set for themselves. Finally, intensity is the vigor and amount of energy employees put into this goal-directed work performance. The level of intensity is based on the importance and difficulty of the goal. These psychological processes result in four outcomes. First, motivation serves to direct attention, focusing on particular issues, people, tasks, etc. It also serves to stimulate an employee to put forth effort. Next, motivation results in persistence, preventing one from deviating from the goal-seeking behavior. Finally, motivation results in task strategies, which as defined by Mitchell & Daniels, are "patterns of behavior produced to reach a particular goal."[42]

Organizational culture

Main article: Organizational culture

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

Main article: Group behavior

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.[43] 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.[41]

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.

Team effectiveness

Organizations support the use of teams, because teams can accomplish a much greater amount of work in a short period of time than can be accomplished by an individual contributor, and because the collective results of a group of contributors can produce higher quality deliverables.[41] Five elements that are contributors to team effectiveness include: (1) team composition, (2) task design, (3) organizational resources, (4) team rewards, and (5) team goals.[41]

Team composition

The composition of teams is initially decided during the selection of individual contributors that are to be assigned to specific teams and has a direct bearing on the resulting effectiveness of those teams. Aspects of team composition that should be considered during the team selection process include team member: knowledge, skills and abilities (KSAs), personalities, and attitudes.[41]

As previously stated, one of the reasons organizations support the use of teams is the expectation of the delivery of higher quality results. To achieve these types of results, highly skilled members are more effective than teams built around those with lesser skills, and teams that include a diversity of skills have improved team performance (Guzzo & Shea, 1992). Additionally, increased average cognitive ability of team members has been shown to consistently correlate to increased work group effectiveness (Sundstrom et al., 2000). Therefore, organizations should seek to assign teams with team members that have a mix of KSAs. Teams that are composed of members that have the same KSAs may prove to be ineffective in meeting the team goals, no matter how talented the individual members are.

The personalities and attitudes of the individuals that are selected as team members are other aspects that should be taken into consideration when composing teams, since these individual traits have been found to be good indicators of team effectiveness. For example, a positive relationship between the team-level traits of agreeableness and conscientiousness and the team performance has been shown to exist (Van Vianen & De Dreu, 2001). Differing personalities of individual team members can affect the team climate in a negative way as members may clash and reduce team performance (Barrick, et al., 1998).

Task design

A fundamental question in team task design is whether or not a task is even appropriate for a team. Those tasks that require predominantly independent work are best left to individuals, and team tasks should include those tasks that consist primarily of interdependent work.[41] When a given task is appropriate for a team, task design can play a key role in team effectiveness (Sundstrom, et al., 2000).

The Job Characteristics Theory of motivation identifies core job dimensions that provide motivation for individuals and include: skill variety, task identity, task significance, autonomy and feedback (Hackman & Oldham, 1980). These dimensions map well to the team environment. Individual contributors that perform team tasks that are challenging, interesting, and engaging are more likely to be motivated to exert greater effort and perform better than those team members that are working on those tasks that do not have these characteristics.[41]

Interrelated to the design of various tasks is the implementation method for the tasks themselves. For example, certain team members may find it challenging to cross train with other team members that have subject matter expertise in areas in which they are not familiar. In utilizing this approach, greater motivation is likely to result for both parties as the expert becomes the mentor and trainer and the cross-training team member finds learning new tasks to be an interesting change of pace. Such expansions of team task assignments can make teams more effective and require teams to spend greater amounts of time discussing and planning strategies and approaches for completing assigned tasks (Hackman, et al., 1976).

Organizational resources

Organizational support systems impact the effectiveness of teams (Sundstrum, et al., 1990) and provide resources for teams operating in the multi-team environment. In this case, the provided resources include various resource types that teams require to be effective. During the chartering of new teams, organizational enabling resources are first identified. Examples of enabling resources include facilities, equipment, information, training and leadership.[41] Also identified during team chartering are team-specific resources (e.g., budgetary resources, human resources). Team-specific human resources represent the individual contributors that are selected for each team as team members. Intra-team processes (e.g., task design, task assignment) are sufficient for effective utilization of these team-specific resources.

Teams also function in multi-team environments that are dynamic in nature and require teams to respond to shifting organizational contingencies (Salas, et al., 2004). In regards to resources, such contingencies include the constraints imposed by organizational resources that are not specifically earmarked for the exclusive use of certain teams. These types of resources are scarce in nature and must be shared by multiple teams. Examples of these scarce resources include subject matter experts, simulation and testing facilities, and limited amounts of time for the completion of multi-team goals. For these types of shared resources inter-team management processes (e.g.: constraint resource scheduling) must be provided to enable effective multi-team utilization.

Team rewards

Organizational reward systems are a driver for strengthening and enhancing individual team member efforts that contribute towards reaching collective team goals (Luthans & Kreitner, 1985). In other words, rewards that are given to individual team members should be contingent upon the performance of the entire team (Sundstrom, et al., 1990).

Several design elements of organizational reward systems are needed to meet this objective. The first element for reward systems design is the concept that for a collective assessment to be appropriate for individual team members, the group's tasks must be highly interdependent. If this is not the case, individual assessment is more appropriate than team assessment (Wageman & Baker, 1997). A second design element is the compatibility between individual-level reward systems and team-level reward systems (DeMatteo, Eby, & Sundstrom, 1998). For example, it would be an unfair situation to reward the entire team for a job well done if only one team member did the great majority of the work. That team member would most likely view teams and team work in a negative fashion and not want to participate in a team setting in the future. A final design element is the creation of an organizational culture that supports and rewards employees who believe in the value of teamwork and who maintain a positive mental attitude towards team-based rewards (Haines and Taggar, 2006).

Team goals

Goals for individual contributors have been shown to be motivating when they contain three elements: (1) difficulty, (2) acceptance, and (3) specificity (Lock & Latham, 1990). In the team setting, goal difficulty is related to group belief that the team can accomplish the tasks required to meet the assigned goal (Whitney, 1994). This belief (collective efficacy) is somewhat counterintuitive, but rests on team member perception that they now view themselves as more competent than others in the organization who were not chosen to complete such difficult goals. This in turn, can lead to higher levels of performance. Goal acceptance and specificity is also applicable to the team setting. When team members individually and collectively commit to team goals, team effectiveness is increased and is a function of increased supportive team behaviors (Aube & Rousseau, 2005).

As related to the team setting, it is also important to be aware of the interplay between the goals of individual contributors that participate on teams and the goals of the teams themselves. The selection of team goals must be done in coordination with the selection of goals for individuals. Individual goals must be in line with team goals (or not exist at all) to be effective (Mitchell & Silver, 1990). For example, a professional ball player that does well in his/her sport is rewarded individually for excellent performance. This individual performance generally contributes to improved team performance which can, in turn, lead to team recognition, such as a league championship.

Job satisfaction and commitment

Main article: Job satisfaction

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

Productive behavior is defined as employee behavior that contributes positively to the goals and objectives of an organization.[41] 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.[41] Industrial–organizational psychologists are typically more focused on productive behavior rather than simple job or task performance because of the ability to account for extra-role performance in addition to in-role performance. While in-role performance tells managers or researchers how well the employee performs the required technical aspects of the job, extra-role performance includes behaviors not necessarily required as part of the job but still contribute to organizational effectiveness. By taking both in-role and extra-role performance into account, industrial–organizational psychologists are able to assess employees' effectiveness (how well they do what they were hired to do), efficiency (their relative outputs to relative inputs), and their productivity (how much they help the organization reach its goals). Jex & Britt outline three different forms of productive behavior that industrial–organizational psychologists frequently evaluate in organizations: job performance; organizational citizenship behavior; and innovation.[41]

Job performance

Main article: Job performance

Job performance represents behaviors employees engage in while at work which contribute to organizational goals.[44] These behaviors are formally evaluated by an organization as part of an employee's responsibilities.[44] 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).[41]

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. Performance is commonly broken into two major categories: in-role (technical aspects of a job) and extra-role (non-technical abilities such as communication skills and being a good team member). While this distinction in behavior has been challenged[45] it is commonly made by both employees and management.[46] A model of performance by Campbell breaks performance into in-role and extra-role categories.[44][47] Campbell labeled job-specific task proficiency and non-job-specific task proficiency as in-role dimensions, while written and oral communication, demonstrating effort, maintaining personal discipline, facilitating peer and team performance, supervision and leadership and management and administration are labeled as extra-role dimensions.[41] Murphy's model of job performance also broke job performance into in-role and extra-role categories.[48] However, task-orientated behaviors composed the in-role category and the extra-role category included interpersonally-oriented behaviors, down-time behaviors and destructive and hazardous behaviors.[41] However, it has been challenged as to whether the measurement of job performance is usually done through pencil/paper tests, job skills tests, on-site hands-on tests, off-site hands-on tests, high-fidelity simulations, symbolic simulations, task ratings and global ratings.[49] These various tools are often used to evaluate performance on specific tasks and overall job performance.[41] Van Dyne and LePine developed a measurement model in which overall job performance was evaluated using Campbell's in-role and extra-role categories.[46] Here, in-role performance was reflected through how well "employees met their performance expectations and performed well at the tasks that made up the employees' job."[50] Dimensions regarding how well the employee assists others with their work for the benefit of the group, if the employee voices new ideas for projects or changes to procedure and whether the employee attends functions that help the group composed the extra-role category.

To assess job performance, reliable and valid measures must be established. While there are many sources of error with performance ratings, error can be reduced through rater training[51] and through the use of behaviorally-anchored rating scales. Such scales can be used to clearly define the behaviors that constitute poor, average, and superior performance.[44] Additional factors that complicate the measurement of job performance include the instability of job performance over time due to forces such as changing performance criteria, the structure of the job itself [48] and the restriction of variation in individual performance by organizational forces. These factors include errors in job measurement techniques, acceptance and the justification of poor performance and lack of importance of individual performance.

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,[44][47] 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).[41] The interplay between these factors show that an employee may, for example, have a low level of declarative knowledge, but may still have a high level of performance if the employee has high levels of procedural knowledge and motivation.

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).[41] These determinants appear to influence performance largely through the acquisition and usage of job knowledge and the motivation to do well. Further, an expanding area of research in job performance determinants includes emotional intelligence.[52][53]

Occupational stress

Main article: Occupational stress

Some i/o psychologists have been interested work stress.[29] Research on job stress and work performance indicates a complex relationship, one that is inconsistent with the noted inverted-U relationship dating back to Yerkes and Dodson.[29]

Organizational citizenship behavior

Main article: Organizational citizenship behavior

Organizational citizenship behaviors ("OCBs") are another form of productive behavior, having been shown to be beneficial to both organization and team effectiveness. Dennis Organ is often thought of as the father of OCB research and defines OCBs as "individual behavior that is discretionary, not directly or explicitly recognized by the formal reward system, and that in the aggregate promotes the effective functioning of the organization."[54] Behaviors that qualify as OCBs can fall into one of the following five categories: altruism, courtesy, sportsmanship, conscientiousness, and civic virtue.[54][55][56]

Researchers have adapted, elaborated, or otherwise changed Organ's (1988) five OCB categories, but they remain popular today. The categories and their descriptions are as follows:

  • Altruism
    Sometimes referred to as "prosocial behavior" altruistic OCBs include helping behaviors in the workplace such as volunteering to assist a coworker on a project.
  • Courtesy
    These behaviors can be seen when an employee exhibits basic consideration for others. Examples of courteous OCBs include "checking up" on coworkers to see how they are doing and notifying coworkers of commitments that may cause you to be absent from work.
  • Sportsmanship
    Unlike other forms of OCBs, sportsmanship involves not engaging in certain behaviors, such as whining and complaining about minor issues or tough work assignments.
  • Conscientiousness
    Conscientiousness is basically defined as self-discipline and performing tasks beyond the minimum requirements. Conscientious OCBs involve planning ahead, cleanliness, not "slacking off," adhering to the rules, punctuality, and being an overall good citizen in the workplace.
  • Civic virtue
    Civic virtue differs from other OCBs because the target of the behavior is the group or organization as a whole, rather than an individual coworker. Civic virtue OCBs include being a good representative of the organization and supporting the organization, especially in its efforts outside of its major business objectives. Examples of civic virtue OCBs are participating in charitable functions held by the organization and defending or otherwise speaking well of the organization.[54]

OCBs are also categorized using other methods. For example, Williams and Anderson categorize OCBs by their intended target, separating them into those targeted at individuals ("OCBIs"), supervisors ("OCBSs"), and those targeted at the organization as a whole ("OCBOs").[57] Additionally, Vigoda-Gadot uses a sub-category of OCBs called CCBs, or "compulsory OCBs" which is used to describe OCBs that are done under the influence of coercive persuasion or peer pressure rather than out of good will.[58] This theory stems from debates concerning the reasons for conducting OCBs and whether or not they are truly voluntary in nature.

Jex & Britt offer three explanations as to why employees engage in organizational citizenship behavior.[41] One relates to positive affect; for example, an overall positive mood tends to change the frequency of helping behavior to a higher rate. This theory stems from a history of numerous studies indicating that positive mood increases the frequency of helping and prosocial behaviors.[59]

A second explanation, which stems from equity theory, is that employees reciprocate fair treatment that they received from the organization. Equity theory researchers found that certain forms of fairness or justice predict OCB better than others. For example, Jex & Britt mention research that indicates that interactional justice is a better predictor than procedural justice, which is in turn a better predictor than distributive justice.

A third explanation Jex & Britt offeres is that, on the one hand, some employees hold personal values that tend to skew their behavior positively to participate in organizational citizenship activities. On the other hand, Jex & Britt's interpretation of research results suggest that other employees will tend to perform organizational citizenship behavior merely to influence how they are viewed within the organization, not because it reflects their personally held values. While these behaviors are not formally part of the job description, performing them can certainly influence performance appraisals.[41] In contrast to this view, some I–O psychologists believe that employees engage in OCBs as a form of "impression management," a term coined by Erving Goffman in his 1959 book The Presentation of Self in Everyday Life. Goffman defines impression management as "the way in which the individual ... presents himself and his activity to others, the ways in which he guides and controls the impression they form of him, and the kinds of things he may and may not do while sustaining his performance before them."[60] Researchers such as Bolino have hypothesized that the act of performing OCBs is not done out of goodwill, positive affect, etc., but instead as a way of being noticed by superiors and looking good in the eyes of others.[61] The key difference between this view and those mentioned by Jex & Britt is that the intended beneficiary of the behavior is the individual who engages in it, rather than another individual, the organization, or the supervisor.[41]

With this research on why employees engage in OCBs comes the debate among I–O psychologists about the voluntary or involuntary nature of engaging in OCBs. Many researchers, including the "father of OCB research," Dennis Organ have consistently portrayed OCBs as voluntary behaviors done at the discretion of the individual.[54] However, more recently researchers have brought attention to potential underlying causes of OCBs, including social pressure, coercion, and other external forces. For example, Eran Vigoda-Gadot suggests that some, but not all, OCBs may be performed voluntarily out of goodwill, but many may be more involuntary in nature and "may arise from coercive managerial strategies or coercive social pressure by powerful peers."[58] As mentioned previously, Vigoda-Gadot categorizes these behaviors in a separate category of OCBs as "compulsory OCBs" or CCBs, which he suggests are a form of "abusive supervision" and will result in poorer organizational performance, similar to what has been seen in other research on abusive supervision and coercive persuasion.[58]


Main article: Innovation

Industrial and Organizational Psychologists consider Innovation, more often than not, a variable of less importance and often a counter-productive one to include in conducting job performance appraisals when irrelevant to the major job functions for which a given job exists. Nonetheless, Industrial and Organizational Psychologists see the value of that variable where its consideration would, were its reliability and validity questioned, achieve a statisticly significant probability that its results are not due to chance, and that it can be replicated reliably with a statisticly significant ratio of reliability, and that was a court to raise a question on its reliability and validity testing, the Industrial and Organizational Psychologist behind its use would be able to defend it before a court of justice with the belief that it will stand before such a court as reliable, and valid.

With the above in mind, Innovation is often considered a form of productive behavior that employees exhibit when they come up with novel ideas that further the goals of the organization.[41] Innovation is a form of productive behavior that employees exhibit when they come up with novel ideas that further the goals of the organization. This section will discuss three topics of interest: research on innovation; characteristics of an individual that may predict innovation; and how organizations may be structured to promote innovation. According to Jex & Britt, individual and organization research can be divided into four unique research focuses.[41]

  • Focus One: The examination of the process by which an employee develops innovations and the unique characteristics of an individuals which enables them to be highly innovative.[41] This stream of thought focuses primarily on the employee or the individual contributor.
  • Focus Two: The macro perspective which focuses upon the process that innovation is diffused within a specific organization. In short, this is the process of communicating an innovation to members of an organization.[62]
  • Focus Three: The process by which an organization adopts an innovation.[41]
  • Focus Four: A shared perspective of the role of the individual and the organization's culture which contribute to innovation.[41]

As indicated above, the first focus looks specifically to find certain attributes of an individual that may lead to innovation, therefore, one must ask, "Are there quantifiable predictors that an individual will be innovative?" Research indicates if various skills, knowledge, and abilities are present then an individual will be more apt to innovation. These qualities are generally linked to creativity.[41] A brief overview of these characteristics are listed below.

  • Task-relevant skills (general mental ability and job specific knowledge). Task specific and subject specific knowledge is most often gained through higher education; however, it may also be gained by mentoring and experience in a given field.[41]
  • 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). The ability to put aside stubborn problems is referred to by Jex & Britt as productive forgetting.[41] Creativity-relevant skills also require the individual contributor to evaluate a problem from multiple vantage points. One must be able to take on the perspective of various users. For example, an Operation Manager analyzing a reporting issue and developing an innovative solution would consider the perspective of a sales person, assistant, finance, compensation, and compliance officer.
  • Task motivation (internal desire to perform task and level of enjoyment).[41]

In addition to the role and characteristics of the individual, one must consider what it is that may be done on an organizational level to develop and reward innovation. An interesting study by Damanpour identified four specific characteristics that may predict innovation within an organization.[63] They are the following ones:

  1. A population with high levels of technical knowledge
  1. The organization's level of specialization
  1. The level an organization communicates externally
  1. Functional Differentiation.[41]

Additionally, organizations could use and institutionalize many participatory system-processes, which could 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).[41]

According to the American Productivity & Quality Center ("APQC") there are basic principles an organization can develop to encourage and reward innovation.

  • The creation of a design team.
  • Acknowledging those who contribute time, effort, and ideas. This recognition may come from senior leaders or through peer recognition.
  • Provide special recognition to innovators while keeping names associated with contributors.
  • Disseminate success stories concerning invention.
  • Make innovation self-rewarding, such as the perception of being a subject matter expert.
  • Linking innovation to the cultural values of the organization.
  • Creating a committee of business leaders from various lines of business and human resources focused on developing guidelines and suggestions to encourage


In discussing innovation for a Best-Practice report, APQC Knowledge Management expert, Kimberly Lopez, stated, "It requires a blending of creativity within business processes to ensure good ideas become of value to the company ... Supporting a creative environment requires innovation to be recognized, nurtured, and rewarded."[64]

Counterproductive work behavior

Main article: Counterproductive work behavior

Counterproductive work 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 counterproductive 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.


Main article: Leadership

In I-O psychology, leadership can be defined as a process of influencing others to agree on a shared purpose, and to work towards shared objectives.[65] A distinction should be made between leadership and management. Managers process administrative tasks and organize work environments. Although leaders may be required to undertake managerial duties as well, leaders typically focus on inspiring followers and creating a shared organizational culture and values. Managers deal with complexity, while leaders deal with initiating and adapting to change. Managers undertake the tasks of planning, budgeting, organizing, staffing, controlling and problem solving. In contrast, leaders undertake the tasks of setting a direction or vision, aligning people to shared goals, communicating, and motivating.[66]

Approaches to studying leadership in I-O psychology can be broadly classified into three categories: Leader-focused approaches, Contingency-focused approaches, and Follower-focused approaches.

Leader-focused approaches

Leader-focused approaches look to organizational leaders to determine the characteristics of effective leadership. According to the trait approach, more effective leaders possess certain traits that less effective leaders lack. More recently, this approach is being used to predict leader emergence. The following traits have been identified as those that predict leader emergence when there is no formal leader: high intelligence, high needs for dominance, high self-motivation, and socially perceptive.[67] Another leader-focused approached is the behavioral approach which focuses on the behaviors that distinguish effective from ineffective leaders. There are two categories of leadership behaviors: (1) consideration; and (2) initiating structure. Behaviors associated with the category of consideration include showing subordinates they are valued and that the leader cares about them. An example of a consideration behavior is showing compassion when problems arise in or out of the office. Behaviors associated with the category of initiating structure include facilitating the task performance of groups. One example of an initiating structure behavior is meeting one-on-one with subordinates to explain expectations and goals. The final leader-focused approach is power and influence. To be most effective a leader should be able to influence others to behave in ways that are in line with the organization's mission and goals. How influential a leader can be depends on their social power or their potential to influence their subordinates. There are six bases of power: coercive power, reward power, legitimate power, expert power, referent power, and informational power. A leader can use several different tactics to influence others within an organization. These common tactics include: rational persuasion, inspirational appeal, consultation, ingratiation, exchange, personal appeal, coalition, legitimating, and pressure.[68]

Contingency-focused approaches

Of the 3 approaches to leadership, contingency-focused approaches have been the most prevalent over the past 30 years. Contingency-focused theories base a leader's effectiveness on their ability to assess a situation and adapt their behavior accordingly.[68] These theories assume that an effective leader can accurately "read" a situation and skillfully employ a leadership style that meets the needs of the individuals involved and the task at hand. A brief introduction to the most prominent contingency-focused theories will follow.

Fiedler's Contingency Theory holds that a leader's effectiveness depends on the interaction between their characteristics and the characteristics of the situation. Path–Goal Theory asserts that the role of the leader is to help his or her subordinates achieve their goals. To effectively do this, leaders must skillfully select from four different leadership styles to meet the situational factors. The situational factors are a product of the characteristics of subordinates and the characteristics of the environment. The Leader-Member Exchange (LMX) Model focuses on how leader–subordinate relationships develop. Generally speaking, when a subordinate performs well or when there are positive exchanges between a leader and a subordinate, their relationship is strengthened, performance and job satisfaction are enhanced, and the subordinate will feel more commitment to the leader and the organization as a whole.[69] Vroom-Yetton-Jago Model focuses on decision making with respect to a feasibility set[68] which is composed of the situational attributes.

In addition to the contingency-focused approaches mentioned, there has been a high degree of interest paid to three novel approaches that have recently emerged. The first is transformational leadership, which posits that there are certain leadership traits that inspire subordinates to perform beyond their capabilities. The second is transactional leadership, which is most concerned with keeping subordinates in-line with deadlines and organizational policy. This type of leader fills more of a managerial role and lacks qualities necessary to inspire subordinates and induce meaningful change. And the third is authentic leadership which is centered around empathy and a leader's values or character. If the leader understands their followers, they can inspire subordinates by cultivating a personal connection and leading them to share in the vision and goals of the team. Although there has been a limited amount of research conducted on these theories, they are sure to receive continued attention as the field of I–O psychology matures.

Follower-focused approaches

Follower-focused approaches look at the processes by which leaders motivate followers, and lead teams to achieve shared goals. Understandably, the area of leadership motivation draws heavily from the abundant research literature in the domain of motivation in I–O psychology. Because leaders are held responsible for their followers' ability to achieve the organization's goals, their ability to motivate their followers is a critical factor of leadership effectiveness. Similarly, the area of team leadership draws heavily from the research in teams and team effectiveness in I–O psychology. Because organizational employees are frequently structured in the form of teams, leaders need to be aware of the potential benefits and pitfalls of working in teams, how teams develop, how to satisfy team members' needs, and ultimately how to bring about team effectiveness and performance. An emerging area of research in the area of team leadership is in leading virtual teams, where people in the team are geographically-distributed across various distances and sometimes even countries. While technological advances have enabled the leadership process to take place in such virtual contexts, they present new challenges for leaders as well, such as the need to use technology to build relationships with followers, and influencing followers when faced with limited (or no) face-to-face interaction.

Organizational change/development

Organizational development

Industrial-organizational psychologists have displayed a great deal of consideration for the problems of total organizational change and systematic ways to bring about planned change. This effort, called organizational development (OD), involves techniques such as:

  • sensitivity training
  • role playing
  • group discussion
  • job enrichment
  • survey feedback
  • team building[38]

Within the survey feedback technique, surveys after being answered by employees periodically, are assessed for their emotions and attitudes which are then communicated to various members within the organization. The team building technique was created due to realization that most tasks within the organization are completed by small groups and/or teams. In order to further enhance a team's or group's morale and problem-solving skills, OD consultants (called change agents) help the groups to build their self-confidence, group cohesiveness, and working effectiveness. A change agent's impartiality, gives the managers within the organization a new outlook of the organization's structure, functions, and culture. A change agent's first task is diagnosis, where questionnaires and interviews are used to assess the problems and needs of the organization. Once analyzed, the strengths and weaknesses of the organization are presented and used to create strategies for solving problems and coping with future changes.[38](pp216-217)

Flexibility and adaptability are some strengths of the OD process, as it possesses the ability to conform to the needs of the situation. Regardless of the specific techniques applied, the OD process helps to free the typical bureaucratic organization from its rigidity and formality, hereby allowing more responsiveness and open participation. Public and private organizations both have employed OD techniques, despite their varied results in research conducted. However, the use of the techniques are justified by the significant increases in productivity that was proven by various studies.[38](p217)

Relationship to occupational health psychology

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.[70] 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.

Training and outlook

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Graduate programs

Schultz and Schultz (2010) states that modern I/O Psychology is a complex and intricate position. It requires intense university training, and hands on experience. Individuals who choose I/O psychology as a profession should also be aware that they will be constantly studying to learn about new developments that may emerge. The minimum requirement for working as an I/O psychologist is a Master's Degree. Normally, this degree requires 42 semester hours and takes about 2–3 years to complete. Most Master's Degree students work, either full-time or part-time, while studying to become an I/O psychologist. Of all the degrees granted in I/O psychology, each year approximately two thirds are at the master's level.[38](p18)

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).[71] 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 PhD 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[71] also provides a comprehensive list of I–O programs in many other countries.

Job outlook

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.

According to recent salary and employment surveys conducted by SIOP,[72] the median salary for a PhD in I-O psychology was $98,000; for a master's level I-O psychologist was $72,000. The highest paid PhD I-O psychologists in private industry worked in pharmaceuticals and averaged approximately $151,000 per year; the median salary for self-employed consultants was $150,000; those employed in retail, energy, and manufacturing followed closely behind, averaging approximately $133,000. The lowest earners were found in state and local government positions, averaging approximately $77,000. I-O psychologists whose primary responsibility is teaching at private and public colleges and universities often earn additional income from consulting with government and industry.[73]

What are some of the pros and cons of a career in Industrial and Organizational Psychology?

Pros of a Career in I-O Psychology:

  • Many career opportunities with a Master’s-level degree.
  • Diverse career paths (i.e. private sector, consulting, government, education.)
  • Opportunities for self-employment.

Cons of a Career in I-O Psychology:

  • Clients and projects change often.
  • Research can often be tedious and burnout can occur.
  • Many positions require doctoral degrees.[74]

What is an Industrial/Organizational consultant and what does an I/O consultant do?


An Industrial/Organizational consultant helps clients and organizations improve productivity and create an optimal working environment through human capital consulting and strategies. Areas of consulting include but are not limited to selection and recruiting, training, leadership, and development, compensation and benefits, employee relations, performance management, succession planning, and executive coaching.[75]

Types of consultants

Consultants can be categorized as internal or external to an organization. An internal consultant is someone who is working specifically for an organization that he or she is a part of whereas an external consultant can be either a sole proprietor or an employee of a consulting firm who is hired by another organization on a project basis or for a certain period of time. There are different types of I/O consultants: (1) internal corporate consultant, (2) independent external consultant, (3) external consultant in a small firm, (4) external consultant in a large firm, (5) external consultant in a research group, (6) internal consultant in a research unit within a large firm, and (7) internal consultant in a large government organization.[76]

Services consultants offer

Kurpius (1978; as cited in Hedge & Borman, 2009) [77] gave four general types of consultation: (1) services and products (e.g., selection tools); (2) collecting information and helping the organization identify and solve the problem; (3) collaborating with the client to design and plan changes in the organization; and (4) helping the client implement the changes and incorporate them into the organizational culture. Consultants offer these consulting services to all kinds of organizations, such as profit and nonprofit sectors, public and private sectors, and a government organization.

Pros and cons

Like any other careers, there are many benefits and downsides of consulting.[78] Some advantages are substantial material rewards, trust and respect from clients, and personal satisfaction. Some disadvantages are traveling (the number one complaint of all I/O consultants), uncertainty in business especially for external consultants, and marginality which is not belonging to any group or organization that the consultant works for.

Competencies of an I/O consultant

There are many different sets of competencies for different areas of consulting and different types of consultants. For example, a consultant specializing in selection and recruiting should have expertise in finding the best talent for the organization and getting everyone on board while he or she might not need to know much about executive coaching. Some consultants tend to specialize in specific areas of consulting whereas others tend to generalize their areas of expertise. However, Cummings and Worley (2009) [78] claimed that there are basic skills and knowledge, which most consultants agree, needed to be effective consultants: (1) intrapersonal skills, (2) interpersonal skills, and (3) general consultation skills. Intrapersonal skills include knowing consultants’ own values and goals, integrity to work responsibly and ethically, and active as well as continuous learning. Interpersonal skills include listening skills, facilitating skills, and building and maintaining relationships. These interpersonal skills are especially important because regardless of how innovative the consultant’s idea is, if the client does not understand it or does not trust the consultant, the client is not going to accept that idea. General consulting skills are those being able to execute different stages of consulting which will be discussed in the following section titled "Stages of I/O Consulting".

Stages of I/O consulting

Block (2011) [79] identified five stages of consulting: (1) entry and contracting, (2) discovery and diagnosis, (3) analysis and planning, (4) engagement and implementation, and (5) extension or termination.

Entry and contracting

This stage is where the consultant makes the initial contact with the client about the project, and it includes setting up the first meeting, exploring more about the project and the client, roles, responsibilities, and expectations about the consultant, the client, and the project, and whether the consultant’s expertise and experience fit with what the client wants out of the project. This is the most important part of the consulting, and most consultants agree that most mistakes in the project can essentially be traced back to the faulty contracting stage.[79]

Discovery and diagnosis

This stage is where the consultant makes his or her own judgment about the problem identified by the client and about the project. Sometimes, the problem presented by the client is not the actual problem but a symptom of a true cause. Then, the consultant collects more information about the situation.[79]

Analysis and planning

This stage is where the consultant analyzes the data and presents the results to the client. The consultant needs to reduce a large amount of data into a manageable size and present them to the client in a clear and simple way. After presenting the results, the consultant helps the client make plans and goals for actions to be taken as a next step to solve the identified problem.[79]

Engagement and implementation

This stage sometimes falls entirely on the client or the organization, and the consultant’s job might be completed at the end of third stage. However, it is important for the consultant to be present at the fourth stage since without implementing the changes suggested by the consultant, the problem is not likely to be solved. Moreover, despite how good the consultant’s advice might be, employees are actually the ones who need to live the changes. So, in this fourth stage, the consultant needs to get everyone on board with the changes and help implement the changes.[79]

Extension or termination

This final stage is where the consultant and the client evaluate the project, and it is usually the most neglected yet important stage. Then, the project is completed or extended depending on the client’s needs.[79]

Ethics of an I/O Consultant

In the consulting field, it is important for the consultant to maintain high ethical standards in all aspects of relationships: consultant to client, consultant to consultant, and client to consultant.[80] After all, all decisions made and actions taken by the consultant will reflect what kind of consultant he or she is. Although ethical situations can be more intricate in the business world, American Psychology Association (APA)’s Ethical Principles of Psychologists and Code of Conduct can be applied to I/O consultants as well. For example, the consultant should only accept projects for which he or she is qualified; the consultant should also avoid all conflicts of interest and being in multiple relationships with those he or she is working with. On the other hand, some might disagree that it is the consultant’s responsibility to actively promote the application of moral and ethical standards in the consultation and examine ethical issues in organizational decisions and policies. It is an ongoing controversial issue in the consulting field.[81] In addition, as more and more organizations are becoming global, it is imperative for consultants working abroad to quickly become aware of rules, regulations, and cultures of the organizations and countries they are in as well as not to ignore ethical standards and codes just because they are abroad.[82]

Future trends of I/O consulting

Teachout and Vequist (2008)[83] identified driving forces affecting future trends in the business consulting: (1) changes in the market conditions, (2) competition for market share and talent, (3) changes in customer demands, (4) changes in technology and innovation, (5) increase in costs, especially in energy and health sectors, and (6) globalization. They also discussed three trends in the field as a result of these forces – people, process, and technology.

Human capital or people

In terms of human capital or people consulting, there are major forces for future trends: (1) lack of competencies in STEM and communication fields, (2) aging of workforce, resulting in the loss of experience and expertise in organizations, (3) increasing and aggressive competition for talent, (4) increase in project- or contract-based workforce instead of hiring permanent employees, and (5) globalization. As a result, trends, such as major talent management, selection and recruiting, workplace education and training, and planning for next generation, have emerged. In addition, change management also becomes important in organizations in order to innovate and implement new technology, tools, and systems to cope with changes in the business.[83]


In terms of process consulting, because of an increase in competition, it becomes important to identify and improve key processes that meet customer values and demands as well as that are faster and cheaper.[83]


In terms of technology consulting, there is an increased need to automate processes or data so that employees can focus on actually doing work and focusing on business rather than doing the manual labor. The consultant can add value to these technologies by providing training, communication plan, and change management as well as to incorporate these technologies into organizational culture. So, regardless of how advanced technology is, consultants are still needed in making sure that these advanced technologies have positive effects on employees and organizations in both technical and social aspects.[83]

Related disciplines

Milestones in industrial and organizational psychology

See also

References & Bibliography

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Key texts


  • Four volume Handbook of Industrial and Organizational Psychology, eds. Marvin D. Dunnette and Leaetta Hough
  • Two volume Handbook of Industrial, Work and Organizational psychology, edited by Neil Anderson, Deniz S. Ones, Handan K. Sinangil, and Chockalingam Viswesvaran


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