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University of Sunderland

The rise of organisational psychology

Posted on: July 22, 2021
A woman's back facing a room full of people in a professional setting

Organisational psychology, sometimes called industrial-organisational psychology or business psychology, is the science of how people think and behave at work. It focuses on three aspects: the person or worker; the work that is being performed; and the context in which the work is being performed.

This area of psychology is currently experiencing a boom, especially in the wake of the coronavirus pandemic and how it affected the way many of us work, with more and more organisations making an active effort to improve the mental health and wellbeing of their staff by helping individuals to find the right work-life balance for them and helping them to find greater levels of job satisfaction.

The beginnings of organisational psychology

The origins of organisational psychology are far removed from how it is applied to the modern workplace, and was originally only called industrial psychology. 

In the early 20th century, several influential early psychologists studied issues that would now be categorised as industrial psychology. In 1903, Walter Dill Scott published two books called The Theory of Advertising and Psychology of Advertising – the first two books to describe the use of psychology in the business world. 

A few years later, in April 1917, psychologists were employed to participate in the military effort of the United States in World War I. Robert Yerkes organised a group under the Surgeon General’s Office which developed methods for screening and selecting enlisted men by developing the Army Alpha test to measure mental abilities and the Army Beta which was a non-verbal test, used for recruits not fluent in English or unable to read. These tests of intelligence were applied to approximately 1,750,000 recruits in just over a year and were kept secret until after the war ended. 

Industrial psychology was largely focused on improving production in manufacturing and other manual labour jobs (soldier performance on the battlefield being one of them). 

The Hawthorne Experiments

One famous study into industrial psychology on the manufacturing field was the Hawthorne Experiments which began in 1924 and were led by Elton Mayo. The Hawthorne plant of Western Electric in Chicago had 29,000 employees, and Mayo’s study set out to investigate the relationship between various incentives on their productivity. 

Initially, two groups were analysed to see what effect various incentives had on productivity. Improved levels of lighting, standard lighting, and below-standard levels of lighting were manipulated across the two groups, and it was found that in all instances, productivity increased, concluding that lighting levels made no difference to productivity. In light of this, further experimentation continued. When other incentives such as payment and rest pauses were introduced at various intervals, output levels varied though trended upward. The reason for this was unclear and still to be investigated. 

The Assistant Works Manager, George Pennock, was the first to notice the impact of supervisory style. The supervisor in the illumination experiment had been friendly and relaxed, had got to know the operators, and wasn’t too focused on company policies and procedures. Instead, discipline was established through enlightened leadership and understanding, a much different approach to the standard practice that had been encouraged before the experiment. When Mayo again visited in 1929 and 1930, he noted ‘a remarkable change of attitude in the group’, as they had turned into a social unit and had developed a sense of participation in the project.

Mayo finally concluded that in order for industry to benefit from the experiments at Hawthorne, supervisors needed to be trained in listening and interviewing techniques to understand the personal problems of workers. He stated that supervisors must be less aloof, more people-oriented, and skilled in handling personal and social situations. 

As the group had been indifferent to the financial incentive scheme, Mayo added after a period of reflection that job satisfaction rose when workers were given more freedom to determine the conditions of their working environment and when output depended more on cooperation and a feeling of worth.

The role of organisational psychology today

While the Hawthorne Experiments may have changed the tide away from businesses using organisational psychology to see ‘what employees can do for us’ towards ‘what can we do for employees’, this approach has been slow in its application across many industries, but is gradually rising.

It has, however, long been noted that productivity is inextricably linked to interpersonal factors and the social and physical environment of a workplace.

Today, organisational psychology is used in many industries to determine both productivity and how it is affected by human factors. There are groups researching the conditions of long-duration space exploration and how they affect individuals for NASA, and others determining how workers feel about the rise of artificial intelligence and the potential threat it poses to their jobs. 

On a more relatable note, many industries now adopt organisational psychology to assess hiring processes, effective communication within a business, teamwork and collaboration, and optimising the quality of work life for all staff. They do this by collaborating with the human resources team to enable an open and honest work environment, encouraging and training workers, and creating a good work-life balance for all staff.

Why is organisational psychology important?

Organisational psychology isn’t just important for maximising employee outputs and productivity. When a team of staff have job satisfaction, they are more likely to work harder and are less likely to leave and move to another company.

A happy workforce is one that stays within a business to progress their career whilst being invested in the overall performance of the company. In order for employees to become invested, the presence of organisational psychology within processes and ways of working is essential.

How to become an organisational psychologist

Companies who employ organisational psychologists often do so by hiring in-house if they’re a large enterprise, or by using external consultancy to assist them if they’re a smaller business.

Our distance learning MSc Psychology delves further into the topic of organisational psychology, allowing you to develop cutting-edge skills and a critical understanding of the application of this area of psychology to workplaces and employees. 

Continue to work full-time while you study this master’s degree part-time, and build your career while you learn. For further information on entry requirements, tuition fees, and start dates, visit our MSc Psychology page.

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