Research in Organizational Psychology

The perspectives and insights in this book also can be traced to the psychological sciences. In particular, psychology that has focused on the study of people in organizations—initially known as industrial psychology and called variously since that time personnel psychology, industrial-organizational psychology, organizational psychology, and work psychology—has been an essential influence. (For convenience we use the term organizational psychology and ignore any subtle differences implied by nomenclature.) Organizational psychology has always influenced and been influenced by related disciplines that also focus on the workplace, such as organizational behavior, labor relations, and human resources. However, it has not often been married with thinking originating in economics. That, we believe, is a strength of this book.

The emphasis on facts, a cornerstone of the new science of human capital management, is a familiar characteristic of organizational psychology. Various methods of inquiry are used to establish facts in the discipline. One method is the quasi-experimental assessment of the impact on productivity of a change in a workforce practice. Another is the sophisticated use of statistical methods of analysis to discern cause-and-effect relationships. These are prized activities for establishing facts. They shape the analysis of the business impact of human capital practices and the analysis of internal labor market dynamics.

Facts learned through the use of these methods are impermanent, as has been noted by Ghiselli (1974).^[9] They change over circumstances and time, over people and places. Thus, facts that are demonstrably true for one time or one workforce may not be true for another.

A good deal of the impermanence of facts in organizations has to do with differences in context. The notion of generalizability—the transportability of facts from one setting to another—has been and remains a core concern of organizational psychology. For example, facts about the accuracy with which future performance in a job can be predicted from a test or interview done at the time of hiring usually are considered to be certain (or reasonably so) when they are rooted in a scientific assessment of accuracy in one work context. Begin changing the context, for example, such as by applying the test or interview to a different population or a different job, and serious uncertainty arises as to accuracy. On a more general level, as we have seen in this book, human capital practices that affect performance positively in one setting, such as incentive pay plans and employee development through internal mobility, may have no effects or negative effects in another. That facts are impermanent is not a catch-22. Our way out consists of the judicious application of measurement-based scientific approaches to testing the transportability of facts across contexts.

Although sensitivity to contexts has always been part of organizational psychology, the field has paid very little attention to all the dimensions of context, as Raymond A. Katzell (1994) notes in his overview of metatrends in the field.^[10] For example, the field has long addressed individual behavior in the context of varying work groups and supervisory styles. However, it largely has ignored broad contextual influences such as differences in labor markets. Fortunately, economics has much to offer about labor markets and other broad contextual influences.

Systems thinking also has made its way into the core of organizational psychology. Early on relatively little explicit attention was given to principles of systems thinking, but like most of the social and behavioral sciences, the field began to embrace systems concepts in the 1960s. Concepts such as interacting parts, feedback, interchange with the environment, and equifinality have become part of the intellectual vocabulary of the field, according to Katzell. An especially important expression of systems thinking is the “sociotechnical” perspective that asserts the importance of optimally fitting human capital practices to the demands of technology and work processes vis- -vis the environment. Thus, organizational psychology informs a second fundamental principle of this book: the importance of systems thinking.

Supplementing an insistence on systems thinking and the importance of facts, the third principle of this book is an emphasis on value. In organizational psychology that emphasis is evident in a perpetual interest in application. Indeed, the field defines itself as living at the intersection of science and practice. Discovering and interpreting facts is a critical part of any science. Doing that to deliver real value is a hallmark of organizational psychology.

Much of that value has been directed toward enhancing the individual consequences of working, that is, identifying practices that contribute to happiness, health, reduced stress, and a decrease in injuries. Such positive outcomes for the individual can have value for employers too. The field also has for a long time focused on drivers of individual performance at work. Higher levels of individual performance can benefit both the employer and the employee. More recently the field has focused on organizational-level outcomes such as profitability and customer retention.

This developing emphasis on organizational-level outcomes, and not coincidentally the adoption of systems thinking, is forcing those in the field to address relationships across different levels of analysis. As has been noted, individual behavior represents one level of analysis, and that of whole organizations represents another. In between are work groups, department, branches or facilities, divisions, and so on. Working across levels of analysis—such as by linking the volatility of the external environment to the power of equity as a reward for motivating individual behavior or identifying the attributes of a department that influence individual choices to stay with or leave the employer—opens organizational psychology to new theories and new methods of establishing facts. Working across levels also is an important practical matter, as Katzell points out. Identifying the levels at which the causes of workforce and business outcomes originate helps an organization design the right interventions.

^[9]Edwin E. Ghiselli , “Some Perspectives for Industrial Psychology,” American Psychologist, 1974, vol. 29, 80–87.

^[10]Raymond A. Katzell, “Contemporary Meta-Trends in Industrial and Organizational Psychology,” in H. C. Triandis, M. D. Dunnette, and L. M. Hough (eds.), Handbook of Industrial and Organizational Psychology, 2d ed., Vol. 4 (Palo Alto, CA: Consulting Psychologists Press, 1994), 1–89.