Context and definitions

The study of psychology provides valuable knowledge and insights which help us understand people's behaviour in business organisations and settings. The contribution that psychology has made to the solution of many human problems encountered in business is significant. It has resulted in better human resource management, enhanced techniques of staff selection, assessment and training, increased morale and operational efficiency, reduced accident rates and improved working conditions. Regardless of these claims to success, it should be noted that psychology is not a cure-all for all human problems linked with business. For example, there are times when the use of personnel selection procedures is less than ideal. Similarly, a programme to boost employee morale at a firm may fall short of management's objectives for various reasons, even if the results are encouraging. In studying human behaviour, the psychologist is concerned with a repertoire of behaviour that is both observable and unobservable (Schultz and Schultz, 2020)

Definitions of business psychology vary from author to author, and different terms are often used interchangeably: occupational psychology, work psychology, industrial psychology, personnel psychology, organisational psychology, organisational behaviour, etc. Moreover, not only does the popularity of these different terms vary from country to country, but they have also changed throughout history.

• Organisational psychology is defined as an applied division of psychology concerned with studying human behaviour related to work, organisations and productivity (Cascio, 2001). Work and organisational psychologists are involved in research on employees and applying psychological principles to the workplace to help optimise an organisation's success (Schultz and Schultz, 2020).
• The fundamental distinguishing trait of an organisation, according to Katz and Kahn's classic work, The Social Psychology of Organizations (1978), is 'patterned' human behaviour. When behaviour is patterned, it indicates that it is given a structure. This structure is generally derived from official job descriptions and organisational regulations in companies. Most businesses have a set of values which they want their workers to follow (Jex and Britt, 2014).
• According to the Association of Business Psychology, “Business Psychology is the study and practice of improving working life. It combines an understanding of the science of human behaviour with experience of the world of work to attain effective and sustainable performance for both individuals and organisations” (2021).
• The scientific study of human behaviour in organisations and the workplace characterises the specialisation of organisational psychology. The specialisation is concerned with extracting individual, group and organisational behaviour principles and applying this knowledge to workplace challenges (American Psychological Association, 2021).

Business psychology is a field of applied psychology which is genuinely multidisciplinary. It combines ideas, concepts and principles from several branches of psychology. For example, research into psychometrics and individual differences has affected discussions of motivation, personality traits, personnel selection and decision-making inspired by the subject of fundamental psychology. The effect of social psychology may be seen in our knowledge of group processes, leadership and communication. Health psychology has influenced our knowledge of stress and its impact on workers, and cognitive psychology has left its imprint on subjects ranging from training to performance assessments (Truxillo et al., 2015).

In terms of international differences, in the UK the Health Care Professions Council's protected title is 'Chartered Occupational Psychologist'. However, many practitioners refer to themselves as business psychologists to reflect the discipline's focus on improving business performance. The application of business psychology to managers, business owners and employees alike is evident from its definition. According to Edwards (2009), business psychology is a fascinating blend of business and psychology. It allows managers to design interventions in organisations to help with performance, selection, diversity and several things that deal with organisational effectiveness.

Edwards (2009), a business psychologist working in the US, believes that businesses are looking for people with the skills to improve performance and effectiveness. He argues that the discipline draws heavily on the practitioner model, which posits that managers use business psychology models grounded in their experiences and apply them to their problems in the real world.

As you watch the video below, please take notes on the meaning of organisational psychology:

Pause and reflect

Based on the outcomes of this video and the material above, take a moment to think in general terms of ways that organisational psychology might be applied in your organisation (or an organisation that you are familiar with).