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Organizational Psychology

Learn about Organizational Psychology and careers in this area

organizational psychology

Successful companies and organizations have a lot in common with winning sports teams. Individual talent definitely provides a competitive edge, but most experts say that teamwork, effective leadership, and motivated employees is what moves organizations far ahead of their competition.

Experts in the field of Industrial-Organizational Psychology (I/O ) agree that savvy organizations realize the link between happy, productive employees and profitability. The I/O field researches behaviors and applies psychological science to solving key business problems surrounding those behaviors. The field has a dual focus, split between functions falling on the Industrial-side of the equation and those falling on the Organizational-side.

While industrial psychology focuses on finding and retaining highly qualified individuals, organizational psychology distinguishes itself by studying the interpersonal, group, inter-group, and inter-organizational contexts in which human behavior occurs. Researchers investigate how groups of individuals interact and influence organizations, and how organizational behavior can be modified through interventions or remedies.

Low employee morale cuts across many problems that organizations confront. According to an August 2009 Wall Street Journal Article, Burgerville, a regional fast-food chain, found employees' dissatisfaction through a 2005 employee survey. Health-care costs ranked as the number one concern, so the company took the unusual move of agreeing to pay 90% of health-care premiums.

This "remedy" raised Burgerville's health-care costs to $4.1 million from $2.1 million, but executives report that the plan more than paid for itself. Employee turnover in 2006 dropped to 54% from 128% in 2005, a major shift for a fast-food chain that typically pays $1,700 to replace and train a restaurant worker.

Industrial Organizational Psychology

Burgerville's remedy also increased productivity, which translated into an 11% increase in sales after implementation of the plan. Employees started working harder to qualify for 20 hours, which the company awards based on employee performance, and which qualifies employees for health-care benefits.

Burgerville's approach to solving low employee morale and the resulting affect on the company's bottom line is a great case study for the field of Organizational Psychology. Nearly every component of Burgerville's solution, from conducting an employee survey, to coming up with a remedy that reduced turnover and increased productivity and revenue, to developing an awards-based performance system was influenced by the field of Organizational Psychology.

Organizational leadership is another topic with a large emphasis in organizational psychology.

Taylor Sparks, a graduate student at the University of Georgia, wants to use her applied psychology degree in I/O to work in leadership development. She wants to eventually work with companies on leadership development, specifically recognizing and developing high potential women employees into executive positions. Her master's thesis will investigate how traditional masculine and feminine personality traits influence others' perceptions of an individual's ability to perform well as a leader, or the extent to which these traits impede or help the individual's potential for promotion.

For those interested in the "O-side" specialties of working in talent management, leadership and executive coaching, Psychologist Eric Gerber recommends learning as much about business as possible. Gerber, a consultant with the management psychology consulting firm RHR International, said that he never actually took a college course in accounting or finance, but he still learned to read balance sheets and other financial statements (read Eric Gerber’s career profile).

Gerber today consults almost exclusively with executives of the “C-suite,” which refers to positions such as the chief executive officer, chief financial officer and chief operating officer, of Fortune 500 companies. His position focuses on working with executives and other leaders, but these professionals, he said, operate and live within the business world. "If you can't talk in terms relevant to a business person, you would quickly become irrelevant."

The large diversity of topics within the field of Organizational Psychology, and changing business environments will keep the organizational psychologist career a dynamic and important career option. In the end, businesses can't survive without content and motivated employees.

If you want to work with people within organizations, and you are interested in helping businesses succeed, you should consider a master’s degree or PhD in I/O psychology.

Individuals with a bachelor's degrees will often find career options in the human resource field. Those with a master's degree in industrial and organizational psychology will experience more autonomy and the ability to incorporate their expertise in the field of organizational psychology, while those with PhD degrees often assume positions with the greatest responsibility, but also the most appealing compensation packages.

Also, learn more about the psychology career licensing processes and what the requirements for licensure are: Psychology Career Licensure.

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