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Industrial and Organizational Psychology

Business owners have long tried to figure out how to make employees more productive and motivated to do a good job.  Industrial-organizational psychologists, or I/O psychologists, study human behavior in the workplace.

They study organizations to see how the organizational structure affects individual employee behavior, how to improve employee job satisfaction and in turn make the workplace more productive and profitable.

What Industrial-Organizational Psychologists Do

Industrial-organizational psychology focuses on the physical and mental well being of employees within an organization and how the workplace affects attitude, productivity, motivation and overall job satisfaction.

Organizations need talented, productive employees, and Industrial-organizational psychologists focus on organizations, their structure, work flow, policies and procedures and work environment so organizations can recruit and retain the best employees and become an employer of choice.

Industrial-organizational psychology has two main functions.  The first is concerned with matching the right employee with the right job through assessments, writing job descriptions and measuring job performance.   The other function addresses the organization itself and how it affects employees’ well-being.

It examines the organizational structure, management styles, social environment, company culture, expectations and how these affect the individual, group and social behaviors within an organization.  It studies the affects of organizational change, such as mergers and acquisitions or layoffs and plant closings.  The goal is to improve individual employee performance and employee’s physical and emotional health.

Industrial-organizational psychology operates in several areas:

Training and Development.  Industrial-organizational psychologists assess employee skills and training needs and develop training plans and programs to improve productivity and performance.

Recruiting and Assessment.  Industrial-organizational psychologists develop job descriptions, screen and test applicants and make hiring recommendations.  They also develop assessments to measure individual performance.

Safety and Risk Assessment.   Industrial-organizational psychologists study the physical plant, work spaces and other environmental issues to reduce the risk of illness, injury or stress.

Work Life.  Industrial-organizational psychologists focus on the social environment and how it incorporates the needs of employees overall health and well-being, job satisfaction, personal and professional goals.

Management and Leadership.  Industrial-organizational psychologists study an organization’s management structure, culture, goals, values and beliefs as expressed in mission and vision statements as it applies to employee job satisfaction, physical and emotional health in the workplace.

Education Requirements for Industrial-Organizational Psychologists

In order to become an industrial-organizational psychologist, you need to complete a bachelor’s degree in psychology, human resources, business or management.  You can earn a master’s degree in industrial organizational psychology, human resources, organizational behavior or organizational management.   A Ph.D. is not required but will distinguish you as an expert in the field.


In order to be a licensed industrial-organizational psychologist, you will need to work under a licensed psychologist for at least two years before taking the required state licensing exam.  Requirements vary by state.  Top companies prefer to work with experts, and the time and expense to get a Ph.D. and state license will open the door to more career opportunities.

Work Environment

Industrial-organizational psychologists work in industrial and corporate environments for large and small companies in both the private and public sector.  Many are in private practice as consultants or are hired by a company as an employee.

They work with the senior management team, human resources and with employees in job assessment, testing and studying the organization and workflow. They also spend time writing reports, collecting and analyzing data, interviewing, flow-charting work processes and making presentations to senior management.

Earning Potential for Industrial-organizational Psychologists

The Bureau of Labor Statistics reports the median annual salary of industrial-organizational psychologists was $124,000.  The lowest 10 percent earned less than $55,000 and the upper 10 percent earned over $145,000 per year.

Management, Technical and Scientific Consulting Services was the highest paying industry in this occupation with a median annual salary of $163,000.

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