13.1 What Is Industrial and Organizational Psychology?

The Historical Development of Industrial and Organizational Psychology

Industrial and organizational psychology had its origins in the early 20th century. Several influential early psychologists studied issues that today would be categorized as industrial psychology: James Cattell (1860–1944), Hugo Münsterberg (1863–1916), Walter Dill Scott (1869–1955), Robert Yerkes (1876–1956), Walter Bingham (1880–1952), and Lillian Gilbreth (1878–1972). Cattell, Münsterberg, and Scott had been students of Wilhelm Wundt, the father of experimental psychology. Some of these researchers had been involved in work in the area of industrial psychology before World War I. Cattell’s contribution to industrial psychology is largely reflected in his founding of a psychological consulting company, which is still operating today, called the Psychological Corporation, and in the accomplishments of students at Columbia in the area of industrial psychology. In 1913, Münsterberg published Psychology and Industrial Efficiency, which covered topics such as employee selection, employee training, and effective advertising.

Scott was one of the first psychologists to apply psychology to advertising, management, and personnel selection. In 1903, Scott published two books: The Theory of Advertising and Psychology of Advertising. They are the first books to describe the use of psychology in the business world. By 1911 he published two more books, Influencing Men in Business and Increasing Human Efficiency in Business. In 1916 a newly formed division in the Carnegie Institute of Technology hired Scott to conduct applied research on employee selection (Katzell & Austin, 1992).

The focus of all this research was in what we now know as industrial psychology; it was only later in the century that the field of organizational psychology developed as an experimental science (Katzell & Austin, 1992). In addition to their academic positions, these researchers also worked directly for businesses as consultants.

When the United States entered World War I in April 1917, the work of psychologists working in this discipline expanded to include their contributions to military efforts. At that time Yerkes was the president of the 25-year-old American Psychological Association (APA). The APA is a professional association in the United States for clinical and research psychologists. Today the APA performs a number of functions including holding conferences, accrediting university degree programs, and publishing scientific journals. Yerkes organized a group under the Surgeon General’s Office (SGO) that developed methods for screening and selecting enlisted men. They developed the Army Alpha test to measure mental abilities. The Army Beta test was a non-verbal form of the test that was administered to illiterate and non-English-speaking draftees. Scott and Bingham organized a group under the Adjutant General’s Office (AGO) with the goal of developing selection methods for officers. They created a catalogue of occupational needs for the Army, essentially a job-description system and a system of performance ratings and occupational skill tests for officers (Katzell & Austin, 1992). After the war, work on personnel selection continued. For example, Millicent Pond researched the selection of factory workers, comparing the results of pre-employment tests with various indicators of job performance (Vinchur & Koppes, 2014).

From 1929 to 1932 Elton Mayo (1880–1949) and his colleagues began a series of studies at a plant near Chicago, Western Electric’s Hawthorne Works (Figure 13.4). This long-term project took industrial psychology beyond just employee selection and placement to a study of more complex problems of interpersonal relations, motivation, and organizational dynamics. These studies mark the origin of organizational psychology. They began as research into the effects of the physical work environment (e.g., level of lighting in a factory), but the researchers found that the psychological and social factors in the factory were of more interest than the physical factors. These studies also examined how human interaction factors, such as supervisorial style, increased or decreased productivity.

Figure 13.4 Hawthorne Works provided the setting for several early I-O studies.

Analysis of the findings by later researchers led to the term the Hawthorne effect, which describes the increase in performance of individuals who are aware they are being observed by researchers or supervisors (Figure 13.5). What the original researchers found was that any change in a variable, such as lighting levels, led to an improvement in productivity; this was true even when the change was negative, such as a return to poor lighting. The effect faded when the attention faded (Roethlisberg & Dickson, 1939). The Hawthorne-effect concept endures today as an important experimental consideration in many fields and a factor that has to be controlled for in an experiment. In other words, an experimental treatment of some kind may produce an effect simply because it involves greater attention of the researchers on the participants (McCarney et al., 2007).

Figure 13.5 Researchers discovered that employees performed better when researchers or supervisors observed and interacted with them, a dynamic termed the Hawthorne effect.

In the 1930s, researchers began to study employees’ feelings about their jobs. Kurt Lewin also conducted research on the effects of various leadership styles, team structure, and team dynamics (Katzell & Austin, 1992). Lewin is considered the founder of social psychology and much of his work and that of his students produced results that had important influences in organizational psychology. Lewin and his students’ research included an important early study that used children to study the effect of leadership style on aggression, group dynamics, and satisfaction (Lewin, Lippitt, & White, 1939). Lewin was also responsible for coining the term group dynamics, and he was involved in studies of group interactions, cooperation, competition, and communication that bear on organizational psychology.

Parallel to these studies in industrial and organizational psychology, the field of human factors psychology was also developing. Frederick Taylor was an engineer who saw that if one could redesign the workplace there would be an increase in both output for the company and wages for the workers. In 1911 he put forward his theory in a book titled The Principles of Scientific Management (Figure 13.6). His book examines management theories, personnel selection and training, as well as the work itself, using time and motion studies. Taylor argued that the principal goal of management should be to make the most money for the employer, along with the best outcome for the employee. He believed that the best outcome for the employee and management would be achieved through training and development so that each employee could provide the best work. He believed that by conducting time and motion studies for both the organization and the employee, the best interests of both were addressed. Time-motion studies were methods that aimed to improve work by dividing different types of operations into sections that could be measured. These analyses were used to standardize work and to check the efficiency of people and equipment.

Personnel selection is a process used by recruiting personnel within the company to recruit and select the best candidates for the job. Training may need to be conducted depending on what skills the hired candidate has. Often companies will hire someone with the personality that fits in with others but who may be lacking in skills. Skills can be taught, but personality cannot be easily changed.

Figure 13.6 (a) Frederick Taylor (1911) strived to engineer workplaces to increase productivity, based on the ideas he set forth in (b) his book, The Principles of Scientific Management. (c) Taylor designed this steam hammer at the Midvale Steel Company. (credit c: modification of work by “Kheel Center, Cornell University”/Flickr)

One of the examples of Taylor’s theory in action involved workers handling heavy iron ingots. Taylor showed that the workers could be more productive by taking work rests. This method of rest increased worker productivity from 12.5 to 47.0 tons moved per day with less reported fatigue as well as increased wages for the workers who were paid by the ton. At the same time, the company’s cost was reduced from 9.2 cents to 3.9 cents per ton. Despite these increases in productivity, Taylor’s theory received a great deal of criticism at the time because it was believed that it would exploit workers and reduce the number of workers needed. Also controversial was the underlying concept that only a manager could determine the most efficient method of working, and that while at work, a worker was incapable of this. Taylor’s theory was underpinned by the notion that a worker was fundamentally lazy and the goal of Taylor’s scientific management approach was to maximize productivity without much concern for worker well-being. His approach was criticized by unions and those sympathetic to workers (Van De Water, 1997).

Gilbreth was another influential I-O psychologist who strove to find ways to increase productivity (Figure 13.7). Using time and motion studies, Gilbreth and her husband, Frank, worked to make workers more efficient by reducing the number of motions required to perform a task. She applied these methods not only to industry but also to the home, office, shops, and other areas. She investigated employee fatigue and time management stress and found many employees were motivated by money and job satisfaction. In 1914, Gilbreth wrote the book, The Psychology of Management: The Function of the Mind in Determining, Teaching, and Installing Methods of Least Waste, and she is known as the mother of modern management. Some of Gilbreth’s contributions are still in use today: you can thank her for the idea to put shelves inside refrigerator doors, and she also came up with the concept of using a foot pedal to operate the lid of trash can (Gilbreth, 1914, 1998; Koppes, 1997; Lancaster, 2004). Gilbreth was the first woman to join the American Society of Mechanical Engineers in 1926, and in 1966 she was awarded the Hoover Medal of the American Society of Civil Engineers.

Taylor and Gilbreth’s work improved productivity, but these innovations also improved the fit between technology and the human using it. The study of machine–human fit is known as ergonomics or human factors psychology.

Figure 13.7 (a) Lillian Gilbreth studied efficiency improvements that were applicable in the workplace, home, and other areas. She is credited with the idea of (b) putting shelves on the inside of refrigerator doors and (c) foot-pedal-operated garbage cans. (credit b: modification of work by “Goedeker’s”/Flickr; credit c: modification of work by Kerry Ceszyk)

From World War II to Today

World War II also drove the expansion of industrial psychology. Bingham was hired as the chief psychologist for the War Department (now the Department of Defense) and developed new systems for job selection, classification, training, and performance review, plus methods for team development, morale change, and attitude change (Katzell & Austin, 1992). Other countries, such as Canada and the United Kingdom, likewise saw growth in I-O psychology during World War II (McMillan, Stevens, & Kelloway, 2009). In the years after the war, both industrial psychology and organizational psychology became areas of significant research effort. Concerns about the fairness of employment tests arose, and the ethnic and gender biases in various tests were evaluated with mixed results. In addition, a great deal of research went into studying job satisfaction and employee motivation (Katzell & Austin, 1992).

The research and work of I-O psychologists in the areas of employee selection, placement, and performance appraisal became increasingly important in the 1960s. When Congress passed the 1964 Civil Rights Act, Title VII covered what is known as equal employment opportunity. This law protects employees against discrimination based on race, color, religion, sex, or national origin, as well as discrimination against an employee for associating with an individual in one of these categories.

Organizations had to adjust to the social, political, and legal climate of the Civil Rights movement, and these issues needed to be addressed by members of I/O in research and practice.

There are many reasons for organizations to be interested in I/O so that they can better understand the psychology of their workers, which in turn helps them understand how their organizations can become more productive and competitive. For example, most large organizations are now competing on a global level, and they need to understand how to motivate workers in order to achieve high productivity and efficiency. Most companies also have a diverse workforce and need to understand the psychological complexity of the people in these diverse backgrounds.

Today, I-O psychology is a diverse and deep field of research and practice, as you will learn about in the rest of this chapter. The Society for Industrial and Organizational Psychology (SIOP), a division of the APA, lists 8,000 members (SIOP, 2014) and the Bureau of Labor Statistics—U.S. Department of Labor (2013) has projected this profession will have the greatest growth of all job classifications in the 20 years following 2012. On average, a person with a master’s degree in industrial-organizational psychology will earn over $80,000 a year, while someone with a doctorate will earn over $110,000 a year (Khanna, Medsker, & Ginter, 2012).