Historically, organisational psychology developed later than industrial psychology and had a distinct focus, although this distinction is largely artificial and many topics cut across both areas. Today, the fields of industrial and organisational psychology have combined into a relatively newer field of Industrial/Organisational Psychology (I/O Psychology). The ‘industrial’ side of I/O psychology has its historical origins in research on individual differences,
assessment, and the prediction of performance. The ‘organisational’ side covers group and inter-group issues. Figure 1 provides a comparison of the list of topics that are typically of interest to those in the industrial and organisational sides of the field. The topics listed on the industrial side are by and large associated with the management of human resources in organisations; while the topics associated with organisational side of the field are concerned with understanding and predicting behaviour within organisational settings.

While industrial psychology is concerned with use of psychological measurement to help organisations make the best use of their people; organisational psychology uses broad psychological theories to diagnose and correct organisational problems. Organisational psychology utilises scientifically-based psychological principles and research methods to study a variety of topics important to understanding human behaviour in many different types of organisations. Recent books on I/O psychology (for instance, Cooper and Locke, 2000) have covered topics such as leadership, leadership training and development, team effectiveness, job satisfaction, the employment interview, performance appraisal, intelligence/motivation/job performance, recruitment, goal setting, organisational justice, and organisational stress.

Motivation is the force that energizes an individual to reach a goal. The psychological study of motivation answers the question of why people do what they do. Taylor’s introduction of the piece rate and the bank wiring room study at Hawthorne are two examples of how complex worker motivation is. At the workplace, it is important for the manager to understand the needs and drives of subordinates and motivate them accordingly.

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