Industrial psychology is a relatively new branch of psychology that was created for corporations and organizations that needed more structure. Industrial psychology is able to provide this structure by evaluating employee behavior for the good of the company. It is often referred to as organizational psychology because of its emphasis on analyzing individuals who work for various organizations.

Essentially, industrial psychologists study the behavior of employees in a work setting. Although industrial psychology didn't begin until the 1920's, the discipline has evolved rapidly and revolutionized the workplace within the last century. Because the workplace is a social system, the application of industrial psychology is useful in understanding its complexity.

For years, psychologists have studied how human beings have interacted with their environments and each other, but industrial psychology begins to evaluate the interaction between people and their jobs. Industrial psychologists can be used to improve job satisfaction as well as company productivity and is becoming vital to the success of many organizations.

There are certain things that industrial psychologists focus on when evaluating the relationship a person has with their work. They analyze the way a person works, their skills, duties, obligations, and general satisfaction with their job on a day-to-day basis. This information is extremely helpful to human resources departments and company overseers who must create training programs, feedback and rewards systems, and make hiring decisions as well as engage in recruitment practices. Most companies use industrial psychologists to train their own staff so that the organizations can run smoothly and at peak capacity.

One of the most interesting aspects of industrial psychology is how employee behavior affects others individuals on the job and organization in general. Industrial psychology can be used to reduce counterproductive behavior, enhance team effectiveness, and boost morale. It is also vital in conflict resolution. Many individuals find the brunt of their work dissatisfaction rooted in their relationships with managers and colleagues. Fortunately, industrial psychology provides solutions for this.

Although industrial psychology is a mixture of anthropology, counseling, sociology and industrial management, there are key components used in this type of psychology. Some of the key components include the evaluation of employee's personalities, perceptions, as well the biological side of their behavior. By documenting these key points, industrial psychologists have the ability to help organizations improve their functionality and set up a system that promotes growth for the company and employees.

Industrial psychology also helps CEOs and executives adjust their way of thinking and their management style, which can impact the stress levels of the employees that they manage. By using psychology, many companies are able to retain their employees because they understand how to keep them happy. Organizations with a low retention rate and employee dissatisfaction benefit from the work and assessment of industrial psychologists.