Driving Employee Happiness with Organizational Psychology

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Driving Employee Happiness with Industrial Organizational Psychology

As businesses are always looking for ways to improve profit margins and the efficiency of the company, industrial organizational psychology (I/O psychology) continues to grow in importance.

By applying the latest research and by analyzing different challenges in the workplace, I/O psychology can improve employee happiness, which in turn can lead to improved productivity.

Below are the five ways industrial organizational psychology can improve employee happiness and how it can help all types of businesses. Driving Employee Happiness; organizational psychology

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What Is Industrial Organizational Psychology?

Industrial organizational psychology (or I/O psychology) is the process of understanding human behavior and applying those lessons to the workplace. This specialty inside psychology focuses on deriving principles of individual, group, and organizational behavior and applying them to the solve problems at work.

I/O psychologists who execute, interpret, and apply the findings of research, can help address issues of:

  • Recruitment
  • Selection and placement
  • Training and development
  • Performance measurement
  • Workplace motivation
  • Quality of work life
  • Organizational development
  • Consumer behavior

I/O Psychology in the Workplace

While businesses are focused on the bottom line of profits and expenses, they are always searching for ways to increase productivity and efficiency.

5 ways that I/O psychology can help businesses are:

  1. Lowering costs
  2. Decreasing waste
  3. Increasing Efficiency
  4. Improving productivity
  5. Team building

How Does Employee Happiness Impact Productivity?

Recent studies have shown that there’s a link between employee happiness and their productivity at work. In fact, one study by the Harvard Business Review, which included an analysis of hundreds of studies, revealed ‘happy’ employees showed an average of:

  • 31% higher productivity
  • 37% higher sales
  • 3x the creativity

Another study, done by the University of Warwick found that happiness led to a 12% spike in employee productivity, while unhappy workers proved 10% less productive.

As opposed to once-held popular beliefs, happiness goes so much deeper than simple compensation and benefits packages. That’s because, according to Shawn Anchor, author of The Happiness Advantage, the brain works much better when a person is feeling positive.

Did You Know?

In 2022, the United States Bureau of Labor Statistics (BLS) reported that the median annual salary for Industrial Organizational Psychologists was $144,610.

What are 5 Ways I/O Psychology Can Improve the Happiness of Your Employees?

Below are the 5 ways I/O psychology can improve the happiness of employees.

  • Positive work environment
  • Reward and respect instead of punishment
  • Hiring better employees
  • Resolving conflicts
  • Use scientific research

As the studies mentioned above show, employee happiness can help companies improve their efficiency, which increases their bottom lines.

In fact, the 2013 State of the American Workplace Report estimated that extensive disinterest and discontent in professional life not only impacted a company’s performance, but also cost the U.S. $450 billion to $550 billion per year.

What is a positive work environment?

A positive work environment helps improve employee happiness which improves empolyee productivity. Some of the ways to make a positive work environment include:

  • Team outings
  • Organizational celebrations
  • Availability of board games and other stress busters
  • Access to social networking

All of these can lead to increased morale, which encourages employees to remain motivated and take initiative. Studies show that this leads to higher levels of job satisfaction, which can improve an organization’s overall effectiveness.

This makes it important to keep tabs on employee morale and encourage them to take initiatives to improve job satisfaction.

Why use reward and respect instead of punishment?

There’s no doubt that punishment can be used as a great motivator. But over the long-term, treating employees with respect and rewarding good performance creates a more positive work environment.

And, as mentioned above, employees are more likely to take initiative improving productivity in a positive environment. On the other hand, using punishment as a means of motivation creates a more negative environment.

While not the only reason, negative environments are one of the reasons that employees feel stressed, underpaid, unheard, and as though they have insufficient opportunities for advancement.

How does I/O psychology help hire better employees?

By using data-driven methods of the success of hiring, I/O psychology can provide a wealth of knowledge, including the answer to questions such as:

  • What skills and knowledge are most important to the position?
  • What type of personality will mesh best with your organization’s culture?
  • What behaviors would be most destructive?

Improving the entire process of hiring, from recruiting all the way through onboarding, means tracking both qualitative and quantitative research to see what works at your company and what doesn’t.

Too Much Employee Happiness?

Current research shows that stress busters and entertainment only enhance organizational effectiveness up to a point. After that point is reached, employees are likely to become complacent and stop taking initiative.

How does I/O psychology help resolve conflicts?

Inevitably, conflicts arise in the workplace. But that doesn’t mean that they have to drive your teams and employees apart. Instead, with the right tools and research, you can actually use these as ways to bring your team together.

While focusing on the issues of the conflict an I/O psychologist will also take into consideration the psychological concerns, such as respect, dignity, empowerment, and effectiveness, unlike a mediator.

This view of the entire situation, including all of the emotions behind the arguments, helps I/O psychologists resolve conflicts without one or more of your employees feeling betrayed.

Use scientific research

This research can help any department and could include any of the other ways industrial organizational psychology can improve the happiness of your employees.

However, often this is best used by human resources, who can collect and apply research and data to help in developing strategies and making key decisions, such as:

  • Workplace health
  • Compensation and benefits
  • Employee behavior
  • Employee issues
  • Performance evaluations

Trained to perform, interpret, and apply research, I/O psychologists can help your company make more informed decisions in every department in order to improve efficiency.

What Is SIOP?

SIOP, or the Society for Industrial and Organizational Psychology, is the premier membership organization for those practicing and teaching I/O psychology.

While it is an independent organization, SIOP also represents Division 14 of the American Psychological Association (APA) and is also an organizational affiliate of the Association for Psychological Science (APS).

As I/O psychology continues to be a dynamic and growing field that encompasses a variety of workplace issues and efficiency, SIOP provides a wealth of information and resources to members.

Interested in Industrial Organizational Psychology?

If these sound like ways that you’d like to help other organizations, then maybe an industrial organizational psychology graduate degree is for you.

Check out any of the sponsored listings on this page for more information. Or, click on the button below to get matched to the perfect program for you! You can also continue reading to learn more about the role of psychology in the workplace.

Top States for Employment for Industrial-Organizational Psychologists
StateEmploymentAnnual Mean Wage
New Jersey40$98,060

Bureau of Labor Statistics

Top Salary Metro Areas in the United States: Industrial-Organizational Psychologists
Metro AreaAnnual Mean SalaryEmployment
Washington-Arlington-Alexandria, DC-VA-MD-WV$121,650200
Boston-Cambridge-Nashua, MA-NH$72,88070
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD$72,7300

Bureau of Labor Statistics

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