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What is Industrial-organizational Psychology?

An industrial-organizational psychologists standing at the front of the room presenting to other psychologists.

Understanding the Numbers
When reviewing job growth and salary information, it’s important to remember that actual numbers can vary due to many different factors — like years of experience in the role, industry of employment, geographic location, worker skill and economic conditions. Cited projections do not guarantee actual salary or job growth.

Industrial-organizational psychology, sometimes abbreviated as I-O or I/O psychology, is the study and application of psychological concepts and practices to an organization and its workforce. In practical terms, that means industrial-organizational psychologists help companies maximize their efficiency by improving hiring and promotion strategies, training and development, employee motivation programs and much more.

“I would say it is using scientific study to look at employee-employer relationships as they relate to productivity, morale, engagement, job satisfaction and attitudes,” said Dr. Thomas MacCarty, associate dean of psychology programs at Southern New Hampshire University (SNHU). MacCarty holds a PhD in I/O Psychology, and he has more than a decade of professional experience in higher education.

Essentially, industrial-organizational psychologists can help businesses recruit and hire the right people, help create training and development programs to improve employee performance and develop incentives and organizational structures, so employees are happier and more productive on the job and maintain work-life balance.

What are Major Topics of Industrial-organizational Psychology?

The Society for Industrial and Organizational Psychology (SIOP) identifies key focuses for industrial-organizational psychologists (IOPs). Some of these areas include:

  • Assessment - Develop tests to measure employee job knowledge and skills, aptitude, personality and other factors that influence performance.
  • Career Development - Recruit candidates that best fit positions in an organization and create training and career-planning programs that nurture employee development.
  • Leadership and Management - Study the qualities of effective leadership at an organizational, team and individual level as they relate to motivation, decision-making, interpersonal communication and more.
  • Organization Theory and Development - Understand the structure, design and culture of an organization as well as change management and how to identify and intervene in organizational issues.
  • Performance Management - Design job performance measurement systems to evaluate and improve employee performance.

Dr. Thomas MacCarty and the text Dr. Thomas MacCartyIn the real world, someone trained in industrial-organizational psychology can have an impact on nearly every part of an organization.

“There really is no part of the workplace that is not focused on,” MacCarty said. “If there is any issue that may be hampering an organization from moving forward, an IOP can help alleviate the issue, or at least mitigate it.”

To have an impact on so many parts of a company or organization, IOPs use psychological principles in their everyday work, MacCarty said. To develop training programs, an IOP uses their understanding of cognition and learning, interpersonal relationships and the impact of employees’ prior learning. 

MacCarty offered an example of a company whose revenues dipped and had to eliminate annual raises, causing a productivity decline and financial hardships for some employees. An IOP can assess that climate and develop other incentives to employees, such as flex-time programs, recognition awards or 4-day work week schedules.

“An IOP can look at the situation and come up with some concrete ideas, ways to improve employee motivation and overcome the disappointment felt by employees because they did not get raises," MacCarty said.

What is an Example of Industrial-organizational Psychology? 

Examples of industrial-organizational psychology vary by role, according to MacCarty. "The one constant would be working with people in varying capacities," he said. "... IOP graduates have strong communication skills to interact with employees, resolve conflicts, and facilitate positive workplace relationships."

The American Psychological Association (APA) reported that the principles of industrial-organization psychology can impact not only businesses, but also trips to space. The APA described some of the challenges that NASA is anticipating for a planned trip to Mars and how I-O psychology can help. 

Specifically, research from I-O psychologists can promote efforts of team cohesion in what would be the longest manned space trip ever. Team cohesion is very important for space missions because errors that result from team conflicts can be detrimental and even fatal, the APA reported. 

Given that the astronauts will spend a long time together in a confined space, it's important for them to be properly trained on managing conflict and communication. The APA reported that it saw a nearly 20% increase in a team's performance as a result of specified team trainings for astronauts.  

What Kind of Job Can I Get with an I-O Psychology Degree?

You might not have worked at a company that employed an IOP, but it’s possible you’ve had co-workers trained in industrial-organizational psychology and simply have another job title. Industrial-organizational psychology doesn’t exactly roll off the tongue, but companies still rely on the expertise of IOPs. IOPs work in many sectors, according to SIOP, including:

  • Academia
  • Consulting
  • Government 
  • Industry 

The U.S. Bureau of Labor Statistics (BLS) reported in 2022 that industrial-organizational psychologists earned a median income of about $139,280, and through 2032 the field is expected to grow by 6%.*

Some of the skills knowledge you can gain from studying industrial-organizational psychology, according to MacCarty, include:

  • Data analysis and interpretation
  • Ethical standards in the workplace
  • Organizational change interventions and problem-solving skills
  • Psychological theories and principles
  • Workplace behavior, motivations and cultural influences

This knowledge can be applied across a variety of roles and in various industries.

One position you might pursue with the help of an IOP education, for instance, is human resources assistant. People in this role, according to MacCarty, help with:

  • Exit interviews
  • Recruitment
  • Employee relations
  • Training development
  • They also must monitor changes to labor laws and government regulations that could impact an organization. 

Find Your Program

How to Become an Industrial-organizational Psychologist

The first step to becoming an industrial-organizational psychologist is to earn a bachelor’s degree in psychology with an industrial-organizational psychology concentration — sometimes known as a business psychology degree.

With the help of this type of degree concentration, MacCarty said you can consider job titles such as:

  • Human resources coordinator
  • I-O psychologist assistant
  • Retention specialist
  • Training and development coordinator
  • Workplace behavior analyst

You might also consider pairing your degree with a minor or electives in a field or industry that interests you, such as accounting or healthcare administration.

If your goal is to hold the title of industrial-organizational psychologist, a master's degree is typically required, BLS reported.

"The minimum requirement to be called an I/O psychologist is a master's degree in industrial-organizational psychology or a closely related field is often required," MacCarty said. Some states also require licensing or certification, he said.

Jackie Lancaster with the text Jackie Lancaster

Jackie Lancaster '21G held a bachelor's in industrial-organizational psychology but knew she would need a master's degree if she wanted to unlock new opportunities in her field. And it paid off.

"My program was worth every minute I spent working to obtain my degree," said Lancaster. "It has opened new avenues that I was not able to explore before."

Gaining a master's degree in industrial-organizational psychology gave Lancaster the tools she needed to feel more confident in her work.

"I learned more than I ever thought I could and I feel as if I received a great education that pertained to what I wanted and needed," she said. "I feel as if I can speak the language of my profession proficiently, and I have gained a tremendous amount of self-esteem over the process."

Discover more about SNHU’s industrial-organizational psychology program: Find out what courses you'll take, skills you’ll learn and how to request information about the program.

*Cited job growth projections may not reflect local and/or short-term economic or job conditions and do not guarantee actual job growth. Actual salaries and/or earning potential may be the result of a combination of factors including, but not limited to: years of experience, industry of employment, geographic location, and worker skill.


Joe Cote is a staff writer at Southern New Hampshire University. Follow him on Twitter @JoeCo2323

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