Workplace Psychology

Introduction to Industrial and Organizational Psychology

Industrial and organizational psychology is the scientific study of employees, workplaces, and organizations.

Learning Objectives

Define the goals of industrial and organizational psychology

Key Takeaways

Key Points

  • The industrial aspect of I–O psychology focuses on improving, evaluating, and predicting job performance, while the organizational aspect focuses on how organizations impact and interact with individuals.
  • Walter Dill Scott’s interest in applying psychological theories to business problems led to his development of personnel-selection methods, including tests to measure certain desirable characteristics and rating scales to rate applicants on necessary skills and attributes.
  • I–O psychologists look at a wide range of workplace-related issues, including hiring practices, defining and measuring job performance, preparing people to be successful in their jobs, promoting job safety, increasing job satisfaction, and structuring the organization to allow high achievement.

Key Terms

  • efficient: Making good, thorough, or careful use of resources; not consuming extra; making good use of time or energy.
  • attribute: A characteristic or quality of a thing.

Industrial and organizational (I–O) psychology is a relatively young field. The industrial aspect focuses on improving, evaluating, and predicting job performance, while the organizational aspect focuses on how organizations impact and interact with individuals. Collectively, industrial and organizational psychology is the scientific study of employees, workplaces, and organizations. I–O psychologists are employed by academic institutions, consulting firms, human-resources departments in companies, and governmental institutions. Various universities across the United States are beginning to strengthen their I–O psychology programs due to increased job demand in the field.

History 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 emergence of I–O psychology: Hugo Munsterberg and James McKeen Cattell. Cattell was one of the first researchers to identify the importance of recognizing individual differences when trying to predict and understand human behavior. In 1910, Munsterberg and Walter Dill Scott helped industrial psychology gain recognition as a legitimate part of the social sciences through their research. Scott, who was also a contemporary of Cattell, was elected president of the American Psychological Association (APA) in 1919, and was arguably the most prominent I–O psychologist of his time.

One of Scott’s interests was applying psychological theories to analyzing business problems. Some of his personnel-selection methods included tests to measure certain desirable characteristics using rating scales to rank applicants on necessary skills and attributes (appearance, demeanor, neatness, judgment, and accuracy). In another research pursuit, Scott tried to make the marketplace and workplace more efficient through the rationalization of consumer and worker activities, especially by appealing to the self-interest of shoppers and laborers.

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James McKeen Cattell: Cattell was one of the first to recognize the importance of taking individual differences into account when trying to predict and better understand employee behavior.

Industrial psychology began to gain prominence when Elton Mayo arrived in the United States in 1924. Unlike Scott, Mayo was fascinated by the emotions and pathologies of workers rather than their efficiency. His observations of workers were studied to see if employees would be likely to resist management attempts to increase productivity, or if they were likely to create labor unions. These studies are known as the Hawthorne studies, and their results ushered in a radically new field  known as the human-relations movement. This movement centered around the more complicated theories of motivation, the emotional world of the worker, job satisfaction, and interviews with workers.

Organizational psychology was not officially added to the psychological canon until the 1970s, but since then the field has flourished. In 1973, “organizational” was added to the name to emphasize the fact that when an individual joins an organization (e.g., the employer), he or she will be exposed to a common goal and a common set of operating procedures.

Goals of I–O Psychology

Industrial-organizational psychologists look at questions surrounding workplace issues. They might recommend hiring procedures for prospective employees, define and measure successful job performance, or prepare people to be more successful in their jobs. Others might promote job safety, try to increase job satisfaction at a company, or restructure an orgazation to allow optimal achievement. Overall, I–O psychologists contribute to an organization’s success by improving the performance, satisfaction, safety, health, 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. I–O psychologists also help organizations make effective transitions among periods of change and development.

The Psychology of Recruiting and Selecting Employees

I–O psychologists design recruitment processes and personnel-selection systems so that employers can find the best candidate for the job.

Learning Objectives

Discuss the importance of personnel selection and recruitment as seen from the perspective of industrial and organizational psychology

Key Takeaways

Key Points

  • Personnel recruitment is the process of identifying qualified candidates and getting them to apply for jobs with 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: interviews, personality inventories, psychomotor and physical ability tests, and work samples.
  • I–O psychologists must evaluate the validity of measures in order to determine the extent to which selection tools predict job performance. In order to do this, they look at content validity, construct validity, and/or criterion validity.

Key Terms

  • validity: A quality of a measurement indicating the degree to which the measurement reflects the underlying construct—that is, whether it measures what it purports to measure.

A major function of I–O psychologists is to design recruitment processes and personnel-selection systems. Personnel recruitment is the systematic process of hiring and promoting personnel. It includes developing job announcements, placing ads, defining key qualifications for applicants, and screening out unqualified applicants. Personnel-selection systems employ evidence-based practices to determine the most qualified candidates for a job. Common selection tools include ability tests, knowledge tests, personality tests, structured interviews, the systematic collection of biographical data, and work samples.

Recruitment

Recruitment is defined as the search for potential applicants for actual or anticipated vacancies. It is the first step in the hiring process. No matter how a company recruits, the goal of a recruitment strategy is to produce viable applicants who fit in with the company’s needs and values. Therefore, it is beneficial to attract not just a large quantity of applicants, but a group of individuals with the necessary skills for the position.

Selection

The next step in the hiring process is selecting new employees from the pool of qualified candidates. After obtaining a large, qualified applicant base through recruitment, managers need to identify the applicants with the highest potential for success in the organization. Selective hiring is critical because it reduces future staff turnovers, reduces costs, and increases morale and productivity. To find the best fit, managers create a list of relevant criteria composed of critical skills, behaviors, and attitudes for each position. It is important that managers select candidates based on how they fit with the culture of the organization, as well as their technical skills and competencies.

Types of Selection Measures

Industrial and organizational (I–O) psychologists use a variety of measures to select applicants who are the best fit for a position. The main goal of these tests is to predict job performance, and each test has its own relative strengths and weaknesses in this regard. When making a hiring decision, it is critical to understand the applicant’s personality style, values, motivations, and attitudes. Technical competency can be acquired by new employees, but personality is not easy to change.

Interviews

Interviews are one of the most common ways that individuals are selected. The best interviews follow a structured framework in which each applicant is asked the same questions and is scored with a standardized rating scale. In this way, structured interviews provide more reliable results than unstructured interviews.

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Job interview: Interviews are one of the most common methods of selection. Structured interviews provide more reliable and consistent scoring results than unstructured interviews.

Personality Testing

Another tool used for selection is personality testing. Personality tests can provide an accurate analysis of an applicant’s attitudes and interpersonal skills. These tests can reveal a variety of things about an applicant, such as how well the applicant gets along with others, self-discipline, attention to detail, organization, flexibility, and disposition.

Ability Tests

Psychomotor-ability tests are used to measure fine motor skills and hand-eye coordination. These skills are important in jobs, like carpentry, that require a lot of hand-eye coordination. Unlike psychomotor ability tests, physical ability tests measure gross motor skills, such as lifting and running. These skills are important in jobs such as construction, where strength is needed.

Work Sample

Another selection technique is to have the applicant complete a hiring assignment. The applicant is asked to complete a task that simulates the actual job. The goal is to assess how well the applicant can learn and perform the tasks.

Validity and Reliability

I–O psychologists must evaluate the validity of these measures in order to determine the extent to which selection tools can predict job performance. Measures have different types of validity that capture different qualities. There are three major types of validity: content validity, construct validity, and criterion validity.

Content Validity

Content validity refers to how comprehensively the measure assesses the underlying construct that it claims to assess. As an example, let’s look at a job interview for a position as a banker. This measure would have low content validity if it assessed whether the candidate was comfortable talking to many different people but not whether they were comfortable with math, because the candidate would not have been thoroughly evaluated on every facet of being a banker. The measure didn’t cover the full breadth of what the job requires.

Construct Validity

Construct validity refers to whether the measure accurately assesses the underlying construct that it claims to assess. This can be evaluated by examining correlations with other measures that purport to assess the same construct. When we ask if a measure has good construct validity, we’re asking, “does this test the thing we are interested in testing?” An example of a measure with debatable construct validity is IQ testing. It is intended to measure intelligence, but there is disagreement about whether it measures intelligence, as it claims, or merely one type of skill.

Criterion Validity

Criterion validity examines how well the construct correlates with one’s behavior in the real world across multiple situations and manifestations. For instance, does the measure adequately capture the construct (e.g., work ethic) as it presents in real life (e.g., getting assignments done on time, coming in to work on time, not leaving early, etc.)?

Reliability

The reliability of a measure refers to whether the measure gets repeatable results. Will the recruitment and selection processes that a company uses work every time they need to hire someone, or just once? If their processes get good results every time, those measures can be said to be reliable.

The Psychology of Employee Satisfaction

Understanding what motivates an organization’s employees is central to the study of I–O psychology.

Learning Objectives

Discuss methods for increasing employee job satisfaction in the context of various psychological theories of workplace motivation

Key Takeaways

Key Points

  • Motivation involves providing someone with an incentive to do something. It can be either intrinsic (consisting of internal factors within a person, such as the desire to succeed) or extrinsic (consisting of external factors, such as monetary rewards).
  • Motivation involves three psychological processes: arousal (which initiates action), direction (the path taken to accomplish goals), and intensity (the vigor and amount of energy employees put into reaching the goal).
  • Job satisfaction reflects employees’ overall assessment of their job through emotions, behaviors, and attitudes about their work experience.

Key Terms

  • telecommute: To work from home, sometimes for part of a working day or week, using a computer connected to one’s employer’s network or the Internet.
  • autonomy: Self-government; freedom to act or function independently.
  • equity: Ownership, especially in terms of net monetary value of some business.

Understanding what motivates an organization ‘s employees is central to the study of I–O psychology. Work motivation is a set of energetic forces that originate both within and outside of individuals, to initiate work-related behavior, and to determine its form, direction, intensity, and duration. Motivation involves providing someone with an incentive to do something; proper incentives should outweigh the cost of the actions required to achieve them.

Motivation can be intrinsic (consisting of internal factors within a person, such as the desire to succeed) or extrinsic (consisting of external factors, such as monetary incentives). Motivation also involves three psychological processes: arousal (which initiated action), direction (the path taken to accomplish goals), and intensity (the vigor and amount of energy employees put into reaching the goal).

Job satisfaction reflects employees’ overall assessment of their job through emotions, behaviors, and attitudes about their work experience. Satisfaction with one’s job has theoretical and practical utility linked to important job outcomes, such as attitudinal variables, absenteeism, employee turnover, and job performance.

Theories of Workplace Motivation

There are many theories about what motivates employees to work. Some are drawn from the larger field of psychology while others are specific to I–O psychology. Below are several theories.

Expectancy Theory

The expectancy theory of motivation proposes that people believe there is a relationship between effort, performance, and outcome. The outcome in expectancy theory is often a reward given for the desired behavior. Under this theory, individuals place a value on the reward and then put forth the effort they believe is worthy of such a reward. An example of expectancy theory in the workplace would be a manager offering a car as a bonus (the reward) to the salesperson who makes the year’s greatest number of sales (the effort).

Goal-Setting Theory

Goal-setting theory suggests that employees will be more motivated if they have specific goals to meet. A manager applying this to the workplace might assign a specific numerical goal to her workers, such as a target number of sales. There are some drawbacks to applying this theory. It can be detrimental to performance on certain types of tasks, and having too many goals can become distracting and counterproductive.

Social Exchange and Equity Theory

Social-exchange and equity theory examines the impact of exchange on motivation. There are three types of exchange relationships that people perceive they have with organizations: (1) a committed relationship held together by moral obligation, (2) a relationship based on demands and contributions, and (3) a relationship based on inequity, in which a person thinks that they are receiving less than they are giving. A manager who uses social-exchange theory might try to emphasize that the company is more of a family than a workplace in order to achieve the first type of relationship.

Need Theory

McClelland’s need theory proposes three main categories of learned human behavior called manifest needs. The three main needs are the need for achievement, power, and affiliation. The amount and type of need varies by individual. People with a high need for achievement are very concerned with doing their best work and setting goals to help them get there. If one does not have a high need for achievement, there is usually a lack in motivation. The need for power takes two forms: socialized power, which benefits a group, and personalized power, which benefits the self. People with a high need for affiliation expect a more personalized relationship with others at work. A manager who applies need theory will want to hire employees with a high need for achievement.

Two-Factor Theory

Herzberg’s two-factor theory describes two factors, motivation and hygiene, that lead to job satisfaction and productivity in the workplace. Motivation factors include achievement, responsibility, advancement, and growth. Hygiene factors include working conditions, status, technical supervision, policy, and administration. This theory also highlights the importance of rewards systems; simple recognition is often enough to motivate employees and increase job satisfaction.

Job-Characteristics Model

The job-characteristics model (JCM) maintains five important elements that motivate workers and performance: skill variety, task identity, task significance, autonomy, and job feedback. The individual elements are then thought to lead to positive outcomes through three psychological states: experienced meaningfulness, experienced responsibility, and the knowledge of results.

Psychological-Empowerment Theory

The psychological-empowerment theory posits that there is a distinction between empowering practices and cognitive motivational states. Empowering practices often occur through a competent manager who empowers employees by practices such as sharing information, creating autonomy, and creating self-managed teams.

Methods of Improving Job Satisfaction

Job satisfaction has a strong positive correlation with life satisfaction, and as such, improving job satisfaction should be considered a priority. (Interestingly, despite popular and media assumptions to the contrary, studies have shown a nebulous relationship between job satisfaction and employee productivity.) Some of the methods below can improve employee job satisfaction.

Flexible Scheduling

Some research has found that flexible working arrangements, such as flextime and telecommuting, can have positive effects on job satisfaction, but the effects are primarily seen when employees have some control over their schedules. Individuals who telecommute most of the work week are more satisfied with their jobs than are traditional employees who commute to a physical office location.

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Telecommuting: Flexible work arrangements, such as telecommuting, can have positive effects on employee satisfaction.

Professional Development

Career-development programs can provide excitement and satisfaction at various stages by identifying employees’ talents early on and providing opportunities for learning. These programs can lead to employee job satisfaction and flexibility. Mentoring benefits and strengthens the employer-employee relationship. For individuals who have a high need for affiliation (as reflected in need theory), mentoring can be a powerful motivator. Identifying talent of employees plays to their strengths and enhances feelings of competency.

Effective Management

Good managers should be able to identify the talents of their employees, make sure they have the resources they need to perform well, respect their opinions, and push them to advance. Managers should develop relationships and provide an environment that is conducive to development. Effective management skills include encouraging an open climate for dialogue with employees; providing employees with ongoing feedback regarding performance; helping employees understand the strategies of the organization; helping employees identify multiple and realistic options for their career growth and development within the organization; and helping employees compile meaningful, business-driven personal-development plans.

Employee Influence

There are benefits when an organization allows for employee influence. Allowing employees to have a voice in the organization creates intrinsic motivation for them to increase the quality of their performance because they care about the company as a whole. However, extrinsic reward systems also play a role in employee satisfaction, as suggested by expectancy theory. Reward systems include compensation, bonuses, raises, job security, benefits, and various other methods of reward for employees. Sometimes recognition alone is enough of a reward.

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Employee recognition: Recognition is often enough of a reward to improve employee satisfaction and increase motivation.

Creativity

On the cutting edge of research pertaining to motivation in the workplace is the integration of motivation and creativity. Essentially, according to research by Ambrose and Kulik, the same variables that predict intrinsic motivation are associated with creativity. Allowing employees to choose creative and challenging tasks has been shown to improve motivation.