Industrial and organizational psychology

Job analysis encompasses a number of different methods including, but not limited to, interviews, questionnaires, task analysis, and observation.[29][30][31] It primarily involves the systematic collection of information about a job. A task-oriented job analysis involves an examination of the duties, tasks, and/or competencies required by the job being assessed. By contrast, a worker-oriented job analysis involves an examination of the knowledge, skills, abilities, and other characteristics (KSAOs) required to successfully perform the work. Information obtained from job analyses are used for many purposes, including the creation of job-relevant selection procedures, performance appraisals and the criteria they require, and the development of training programs.

I-O psychologists typically work with human resource specialists to design (a) recruitment processes and (b) personnel selection systems. Personnel recruitment is the process of identifying qualified candidates in the workforce and getting them to apply for jobs within an organization. Personnel recruitment processes include developing job announcements, placing ads, defining key qualifications for applicants, and screening out unqualified applicants.

Personnel selection is the systematic process of hiring and promoting personnel. Personnel selection systems employ evidence-based practices to determine the most qualified candidates. Personnel selection involves both the newly hired and individuals who can be promoted from within the organization. Common selection tools include ability tests (e.g., cognitive, physical, or psycho-motor), knowledge tests, personality tests, structured interviews, the systematic collection of biographical data, and work samples. I-O psychologists must evaluate evidence regarding the extent to which selection tools predict job performance.

Personnel selection procedures are usually validated, i.e., shown to be job relevant to personnel selection, using one or more of the following types of validity: content validity, construct validity, and/or criterion-related validity. I-O psychologists must adhere to professional standards in personnel selection efforts. SIOP (e.g., Principles for validation and use of personnel selection procedures[32]) and APA together with the National Council on Measurement in Education (e.g., Standards for educational and psychological testing[33] are sources of those standards. The Equal Employment Opportunity Commission's Uniform guidelines[34] are also influential in guiding personnel selection decisions.

A meta-analysis of selection methods found that general mental ability was the best overall predictor of job performance and attainment in training.[35]

Performance appraisal or performance evaluation is the process in which an individual's or a group's work behaviors and outcomes are assessed against managers' and others' expectations for the job.[36] Performance appraisal is frequently used in promotion and compensation decisions, to help design and validate personnel selection procedures, and for performance management. Performance management is the process of providing performance feedback relative to expectations, and information relevant to improvement (e.g., coaching, mentoring). Performance management may also include documenting and tracking performance information for organizational evaluation purposes.

An I-O psychologist would typically use information from the job analysis to determine a job's performance dimensions, and then construct a rating scale to describe each level of performance for the job. Often, the I-O psychologist would be responsible for training organizational personnel how to use the performance appraisal instrument, including ways to minimize bias when using the rating scale, and how to provide effective performance feedback.

Individual assessment involves the measurement of individual differences. I-O psychologists perform individual assessments in order to evaluate differences among candidates for employment as well as differences among employees.[37] The constructs measured pertain to job performance. With candidates for employment, individual assessment is often part of the personnel selection process. These assessments can include written tests, aptitude tests, physical tests, psycho-motor tests, personality tests, integrity and reliability tests, work samples, simulations, and assessment centres.[37]

I-O psychologists are concerned with occupational health and well-being for well over a century. Developments early in the 20th century occurred in both the UK and the U.S. During World War I Charles Myers in the U.K. studied worker fatigue and other aspects of well-being, discussed in his 1920 I-O psychology textbook.[38] In the U.S. Arthur Kornhauser examined the impact on productivity of hiring mentally unstable workers.[39] Kornhauser also examined the link between industrial working conditions and mental health as well as the spillover into a worker's personal life of having an unsatisfying job.[40][41][42]

More recently, I-O researchers have found that staying vigorous during working hours is associated with better work-related behaviour and subjective well-being as well as more effective functioning in the family domain.[43] Trait vigor and recovery experiences after work were related to vigor at work.[43] Job satisfaction has also been found to be associated with life satisfaction, happiness, well-being and positive affect, and the absence of negative affect.[41] Other research indicates that among older workers activities such as volunteering and participating in social clubs was related to a decrease in depressive symptoms over the next two years.[44] Research on job changing indicates that mobility between, but not within, organizations is associated with burnout.[42] In the late 1980s and early 1990s, a new discipline, occupational health psychology, emerged from i/o psychology and both health psychology, and occupational medicine.[45][46]

I-O psychologists are concerned with the related topics of workplace bullying, aggression, and violence.[47] For example, I-O research found that exposure to workplace violence elicited ruminative thinking. Ruminative thinking is associated with poor well-being.[48] I-O research has found that interpersonal aggressive behaviour is associated with worse team performance.[49]

Compensation includes wages or salary, bonuses, pension/retirement contributions, and employee benefits that can be converted to cash or replace living expenses. I-O psychologists may be asked to conduct a job evaluation for the purpose of determining compensation levels and ranges. I-O psychologists may also serve as expert witnesses in pay discrimination cases, when disparities in pay for similar work are alleged by employees.

Training involves the systematic teaching of skills, concepts, or attitudes that results in improved performance in another environment.[50] Because many people hired for a job are not already versed in all the tasks the job requires, training may be needed to help the individual perform the job effectively. Evidence indicates that training is often effective, and that it succeeds in terms of higher net sales and gross profitability per employee.[51]

Similar to performance management (see above), an I-O psychologist would employ a job analysis in concert with the application of the principles of instructional design to create an effective training program. A training program is likely to include a summative evaluation at its conclusion in order to ensure that trainees have met the training objectives and can perform the target work tasks at an acceptable level. Training programs often include formative evaluations to assess the effect of the training as the training proceeds. Formative evaluations can be used to locate problems in training procedures and help I-O psychologists make corrective adjustments while training is ongoing.

The foundation for training programs is learning. Learning outcomes can be organized into three broad categories: cognitive, skill-based, and affective outcomes.[52] Cognitive training is aimed at instilling declarative knowledge or the knowledge of rules, facts, and principles (e.g., police officer training covers laws and court procedures). Skill-based training aims to impart procedural knowledge (e.g., skills needed to use a special tool) or technical skills (e.g., understanding the workings of software program). Affective training concerns teaching individuals to develop specific attitudes or beliefs that predispose trainees to behave a certain way (e.g., show commitment to the organization, appreciate diversity).[53]

A needs assessment, an analysis of corporate and individual goals, is often undertaken prior to the development of a training program.[54]^(p164) In addition, a careful needs analysis is required in order to develop a systematic understanding of where training is needed, what should be taught, and who will be trained.[50] A training needs analysis typically involves a three-step process that includes organizational analysis, task analysis and person analysis.[55]

An organizational analysis is an examination of organizational goals and resources as well as the organizational environment. The results of an organizational analysis help to determine where training should be directed. The analysis identifies the training needs of different departments or subunits. It systematically assesses manager, peer, and technological support for transfer of training. An organizational analysis also takes into account the climate of the organization and its subunits. For example, if a climate for safety is emphasized throughout the organization or in subunits of the organization (e.g., production), then training needs will likely reflect an emphasis on safety.[56] A task analysis uses the results of a job analysis to determine what is needed for successful job performance, contributing to training content. With organizations increasingly trying to identify "core competencies" that are required for all jobs, task analysis can also include an assessment of competencies.[57] A person analysis identifies which individuals within an organization should receive training and what kind of instruction they need. Employee needs can be assessed using a variety of methods that identify weaknesses that training can address.

Work motivation reflects the energy an individual applies "to initiate work-related behavior, and to determine its form, direction, intensity, and duration"[58] Understanding what motivates an organization's employees is central to I-O psychology. Motivation is generally thought of as a theoretical construct that fuels behavior. An incentive is an anticipated reward that is thought to incline a person to behave a certain way.[59] Motivation varies among individuals. Studying its influence on behavior, it must be examined together with ability and environmental influences. Because of motivation's role in influencing workplace behavior and performance, many organizations structure the work environment to encourage productive behaviors and discourage unproductive behaviors.[60][61]

Motivation involves three psychological processes: arousal, direction, and intensity. Arousal is what initiates action. It is often fueled by a person's need or desire for something that is missing from his or her life, either totally or partially. Direction refers to the path employees take in accomplishing the goals they set for themselves. Intensity is the amount of energy employees put into goal-directed work performance. The level of intensity often reflects the importance and difficulty of the goal. These psychological processes involve four factors. First, motivation serves to direct attention, focusing on particular issues, people, tasks, etc. Second, it serves to stimulate effort. Third, motivation influences persistence. Finally, motivation influences the choice and application of task-related strategies.[61]

I-O psychologists have since the 1960s been at the forefront of research and the practice of occupational stress and design of individual and organizational interventions to manage and reduce the stress levels and increase productivity, performance, health and wellbeing.[62][63][64] Occupational stress can have implications for organizational performance because of the emotions job stress evokes. For example, a job stressor such as conflict with a supervisor can precipitate anger that in turn motivates counterproductive workplace behaviors.[65] I-O research has examined the association between work stressors and aggression, theft, substance abuse,[66] and depressive symptoms.[67] A number of models have been developed to explain the job stress process, including the person-environment (P-E) fit model[68] and the demand-control model.[69]

I-O research has also examined occupational stress in specific occupations, including police,[70] general practitioners,[71] and dentists.[72] Another concern has been the relation of occupational stress to family life.[73][74] Other I-O researchers have examined gender differences in leadership style and job stress and strain in the context of male- and female-dominated industries,[75] and unemployment-related distress.[76][77][78] I-O psychology is also concerned with the relation of occupational stress to career advancement.[79]

Accidents and safety in the workplace are significant areas of interest to I-O psychology and I-O psychologists.[80] Examples of psychosocial injury hazards of interest to I-O psychology include fatigue, workplace violence, workplace bullying, and working night shifts.[81] I-O researchers conduct "stress audits" that can help organizations remain compliant with various occupational safety regulations.[82] Psychosocial hazards can affect musculoskeletal disorders.[80][83] A psychosocial factor related to accident risk is safety climate, which refers to employees' perceptions of the extent to which their work organization prioritizes safety.[84] By contrast, psychosocial safety climate refers to management's "policies, practices, and procedures" aimed at protecting workers' psychological health.[85] Research on safety leadership is also relevant to I-O psychology. Research suggests that safety-oriented transformational leadership is associated with a positive safety climate and safe worker practices.[86]

While there is no universal definition for organizational culture, a collective understanding shares the following assumptions:[87]^:2

... that they are related to history and tradition, have some depth, are difficult to grasp and account for, and must be interpreted; that they are collective and shared by members of groups and primarily ideational in character, having to do with values, understandings, beliefs, knowledge, and other intangibles; and that they are holistic and subjective rather than strictly rational and analytical.

Organizational culture has been shown to affect important organizational outcomes such as performance, attraction, recruitment, retention, employee satisfaction, and employee well-being. There are three levels of organizational culture: artifacts, shared values, and basic beliefs and assumptions. Artifacts comprise the physical components of the organization that relay cultural meaning. Shared values are individuals' preferences regarding certain aspects of the organization's culture (e.g., loyalty, customer service). Basic beliefs and assumptions include individuals' impressions about the trustworthiness and supportiveness of an organization, and are often deeply ingrained within the organization's culture.

In addition to an overall culture, organizations also have subcultures.[88] Subcultures can be departmental (e.g. different work units) or defined by geographical distinction.[88] While there is no single "type" of organizational culture, some researchers have developed models to describe different organizational cultures.

Group behavior involves the interactions among individuals in a collective. The individuals' opinions, attitudes, and adaptations affect group behavior and group behavior. In turn, affects those opinions, etc.[89] The interactions are thought to fulfill some need satisfaction in an individual who is part of the collective.[60] A specific area of I-O research in group behavior is the team dynamics and team effectiveness.

Organizations often organize teams because teams can accomplish a much greater amount of work in a short period of time than an individual can accomplish.[60] I-O research has examined the harm workplace aggression does to team performance.[90]

Team composition, or the configuration of team member knowledge, skills, abilities, and other characteristics, fundamentally influences teamwork.[91] Team composition can be considered in the selection and management of teams to increase the likelihood of team success.[92] To achieve high-quality results, teams built with members having higher skill levels are more likely to be effective than teams built around members having lesser skills; teams that include a members with a diversity of skills are also likely to show improved team performance.[93][94] Team members should also be compatible in terms of personality traits, values, and work styles.[94][95] There is substantial evidence that personality traits and values can shape the nature of teamwork, and influence team performance.[96][97]

A fundamental question in team task design is whether or not a task is even appropriate for a team. Those tasks that require predominantly independent work are best left to individuals, and team tasks should include those tasks that consist primarily of interdependent work.[60] When a given task is appropriate for a team, task design can play a key role in team effectiveness.[98]

Job characteristic theory identifies core job dimensions that affect motivation, satisfaction, performance, etc. These dimensions include skill variety, task identity, task significance, autonomy and feedback.[99] The dimensions map well to the team environment. Individual contributors who perform team tasks that are challenging, interesting, and engaging are more likely to be motivated to exert greater effort and perform better than team members who are working on tasks that lack those characteristics.[60]

Organizational support systems affect the team effectiveness[100] and provide resources for teams operating in the multi-team environment. During the chartering of new teams, organizational enabling resources are first identified. Examples of enabling resources include facilities, equipment, information, training, and leadership.[60] Team-specific resources (e.g., budgetary resources, human resources) are typically made available. Team-specific human resources represent the individual contributors who are selected to be team members. Intra-team processes (e.g., task design, task assignment) involve these team-specific resources.

Teams also function in dynamic multi-team environments. Teams often must respond to shifting organizational contingencies.[101] Contingencies affecting teams include constraints arising from conditions in which organizational resources are not exclusively earmarked for certain teams. When resources are scarce, they must be shared by multiple teams.

Organizational reward systems drive the strengthening and enhancing of individual team member efforts; such efforts contribute towards reaching team goals.[102] In other words, rewards that are given to individual team members should be contingent upon the performance of the entire team.[100]

Several design elements are needed to enable organizational reward systems to operate successfully. First, for a collective assessment to be appropriate for individual team members, the group's tasks must be highly interdependent. If this is not the case, individual assessment is more appropriate than team assessment.[103] Second, individual-level reward systems and team-level reward systems must be compatible.[104] For example, it would be unfair to reward the entire team for a job well done if only one team member did most of the work. That team member would most likely view teams and teamwork negatively, and would not want to work on a team in the future. Third, an organizational culture must be created such that it supports and rewards employees who believe in the value of teamwork and who maintain a positive attitude towards team-based rewards.[105]

Goals potentially motivate team members when goals contain three elements: difficulty, acceptance, and specificity.[106] Under difficult goal conditions, teams with more committed members tend to outperform teams with less committed members.[107] When team members commit to team goals, team effectiveness is a function of how supportive members are with each other.[108] The goals of individual team members and team goals interact. Team and individual goals must be coordinated. Individual goals must be consistent with team goals in order for a team to be effective.[109]

Job satisfaction is often thought to reflect the extent to which a worker likes his or her job, or individual aspects or facets of jobs.[110] It is one of the most heavily researched topics in I-O psychology. Job satisfaction has theoretical and practical utility for the field. It has been linked to important job outcomes including attitudinal variables (e.g., job involvement, organizational commitment), absenteeism, turnover intentions, actual turnover, job performance, and tension. A meta-analyses found job satisfaction to be related to life satisfaction, happiness, positive affect, and the absence of negative affect.[111]

Productive behavior is defined as employee behavior that contributes positively to the goals and objectives of an organization.[60] When an employee begins a new job, there is a transition period during which he or she may not contribute significantly. To assist with this transition an employee typically requires job-related training. In financial terms, productive behavior represents the point at which an organization begins to achieve some return on the investment it has made in a new employee.[60] IO psychologists are ordinarily more focused on productive behavior than job or task performance, including in-role and extra-role performance. In-role performance tells managers how well an employee performs the required aspects of the job; extra-role performance includes behaviors not necessarily required by job but nonetheless contribute to organizational effectiveness. By taking both in-role and extra-role performance into account, an I-O psychologist is able to assess employees' effectiveness (how well they do what they were hired to do), efficiency (outputs to relative inputs), and productivity (how much they help the organization reach its goals). Three forms of productive behavior that IO psychologists often evaluate include job performance, organizational citizenship behavior (see below), and innovation.[60]

Job performance represents behaviors employees engage in while at work which contribute to organizational goals.[112] These behaviors are formally evaluated by an organization as part of an employee's responsibilities.[112] In order to understand and ultimately predict job performance, it is important to be precise when defining the term. Job performance is about behaviors that are within the control of the employee and not about results (effectiveness), the costs involved in achieving results (productivity), the results that can be achieved in a period of time (efficiency), or the value an organization places on a given level of performance, effectiveness, productivity or efficiency (utility).[60]

To model job performance, researchers have attempted to define a set of dimensions that are common to all jobs. Using a common set of dimensions provides a consistent basis for assessing performance and enables the comparison of performance across jobs. Performance is commonly broken into two major categories: in-role (technical aspects of a job) and extra-role (non-technical abilities such as communication skills and being a good team member). While this distinction in behavior has been challenged[113] it is commonly made by both employees and management.[114] A model of performance by Campbell breaks performance into in-role and extra-role categories.[112][115] Campbell labeled job-specific task proficiency and non-job-specific task proficiency as in-role dimensions, while written and oral communication, demonstrating effort, maintaining personal discipline, facilitating peer and team performance, supervision and leadership and management and administration are labeled as extra-role dimensions.[60] Murphy's model of job performance also broke job performance into in-role and extra-role categories.[116] However, task-orientated behaviors composed the in-role category and the extra-role category included interpersonally-oriented behaviors, down-time behaviors and destructive and hazardous behaviors.[60] However, it has been challenged as to whether the measurement of job performance is usually done through pencil/paper tests, job skills tests, on-site hands-on tests, off-site hands-on tests, high-fidelity simulations, symbolic simulations, task ratings and global ratings.[117] These various tools are often used to evaluate performance on specific tasks and overall job performance.[60] Van Dyne and LePine developed a measurement model in which overall job performance was evaluated using Campbell's in-role and extra-role categories.[114] Here, in-role performance was reflected through how well "employees met their performance expectations and performed well at the tasks that made up the employees' job."[118] Dimensions regarding how well the employee assists others with their work for the benefit of the group, if the employee voices new ideas for projects or changes to procedure and whether the employee attends functions that help the group composed the extra-role category.

To assess job performance, reliable and valid measures must be established. While there are many sources of error with performance ratings, error can be reduced through rater training[119] and through the use of behaviorally-anchored rating scales. Such scales can be used to clearly define the behaviors that constitute poor, average, and superior performance.[112] Additional factors that complicate the measurement of job performance include the instability of job performance over time due to forces such as changing performance criteria, the structure of the job itself[116] and the restriction of variation in individual performance by organizational forces. These factors include errors in job measurement techniques, acceptance and the justification of poor performance and lack of importance of individual performance.

The determinants of job performance consist of factors having to do with the individual worker as well as environmental factors in the workplace. According to Campbell's Model of The Determinants of Job Performance,[112][115] job performance is a result of the interaction between declarative knowledge (knowledge of facts or things), procedural knowledge (knowledge of what needs to be done and how to do it), and motivation (reflective of an employee's choices regarding whether to expend effort, the level of effort to expend, and whether to persist with the level of effort chosen).[60] The interplay between these factors show that an employee may, for example, have a low level of declarative knowledge, but may still have a high level of performance if the employee has high levels of procedural knowledge and motivation.

Regardless of the job, three determinants stand out as predictors of performance: (1) general mental ability (especially for jobs higher in complexity); (2) job experience (although there is a law of diminishing returns); and (3) the personality trait of conscientiousness (people who are dependable and achievement-oriented, who plan well).[60] These determinants appear to influence performance largely through the acquisition and usage of job knowledge and the motivation to do well. Further, an expanding area of research in job performance determinants includes emotional intelligence.[120][121]

Organizational citizenship behaviors (OCBs) are another form of workplace behavior that IO psychologists are involved with. OCBs tend to be beneficial to both the organization and other workers. Dennis Organ (1988) defines OCBs as "individual behavior that is discretionary, not directly or explicitly recognized by the formal reward system, and that in the aggregate promotes the effective functioning of the organization."[122] Behaviors that qualify as OCBs can fall into one of the following five categories: altruism, courtesy, sportsmanship, conscientiousness, and civic virtue.[122][123][124] OCBs have also been categorized in other ways too, for example, by their intended targets (individuals, supervisors, and the organization as a whole.[125] Other alternative ways of categorizing OCBs include "compulsory OCBs", which are engaged in owing to coercive persuasion or peer pressure rather than out of good will.[126] The extent to which OCBs are voluntary has been the subject of some debate.[126]

Other research suggests that some employees perform OCBs to influence how they are viewed within the organization. While these behaviors are not formally part of the job description, performing them can influence performance appraisals.[60] Researchers have advanced the view that employees engage in OCBs as a form of "impression management," a term coined by Erving Goffman.[127] Goffman defined impression management as "the way in which the individual ... presents himself and his activity to others, the ways in which he guides and controls the impression they form of him, and the kinds of things he may and may not do while sustaining his performance before them. Some researchers have hypothesized that OCBs are not performed out of good will, positive affect, etc., but instead as a way of being noticed by others, including supervisors.[128]

Four qualities are generally linked to creative and innovative behaviour by individuals:[60]

• Task-relevant skills (general mental ability and job specific knowledge). Task specific and subject specific knowledge is most often gained through higher education; however, it may also be gained by mentoring and experience in a given field.[60]
• Creativity-relevant skills (ability to concentrate on a problem for long periods of time, to abandon unproductive searches, and to temporarily put aside stubborn problems). The ability to put aside stubborn problems is referred to by Jex and Britt as productive forgetting.[60] Creativity-relevant skills also require the individual contributor to evaluate a problem from multiple vantage points. One must be able to take on the perspective of various users. For example, an Operation Manager analyzing a reporting issue and developing an innovative solution would consider the perspective of a sales person, assistant, finance, compensation, and compliance officer.
• Task motivation (internal desire to perform task and level of enjoyment).[60]

At the organizational level, a study by Damanpour identified four specific characteristics that may predict innovation:[129][60]

1. A population with high levels of technical knowledge
2. The organization's level of specialization
3. The level an organization communicates externally
4. Functional differentiation.

Counterproductive work behavior (CWB) can be defined as employee behavior that goes against the goals of an organization. These behaviors can be intentional or unintentional and result from a wide range of underlying causes and motivations. Some CWBs have instrumental motivations (e.g., theft).[65] It has been proposed that a person-by-environment interaction can be utilized to explain a variety of counterproductive behaviors.[65] For instance, an employee who sabotages another employee's work may do so because of lax supervision (environment) and underlying psychopathology (person) that work in concert to result in the counterproductive behavior. There is evidence that an emotional response (e.g., anger) to job stress (e.g., unfair treatment) can motivate CWBs.[65]

The forms of counterproductive behavior with the most empirical examination are ineffective job performance, absenteeism, job turnover, and accidents. Less common but potentially more detrimental forms of counterproductive behavior have also been investigated including violence and sexual harassment.

In IO psychology, leadership can be defined as a process of influencing others to agree on a shared purpose, and to work towards shared objectives.[130] A distinction should be made between leadership and management. Managers process administrative tasks and organize work environments. Although leaders may be required to undertake managerial duties as well, leaders typically focus on inspiring followers and creating a shared organizational culture and values. Managers deal with complexity, while leaders deal with initiating and adapting to change. Managers undertake the tasks of planning, budgeting, organizing, staffing, controlling and problem solving. In contrast, leaders undertake the tasks of setting a direction or vision, aligning people to shared goals, communicating, and motivating.[131]

Approaches to studying leadership in IO psychology can be broadly classified into three categories: Leader-focused approaches, contingency-focused approaches, and follower-focused approaches.

Leader-focused approaches look to organizational leaders to determine the characteristics of effective leadership. According to the trait approach, more effective leaders possess certain traits that less effective leaders lack. More recently, this approach is being used to predict leader emergence. The following traits have been identified as those that predict leader emergence when there is no formal leader: high intelligence, high needs for dominance, high self-motivation, and socially perceptive.[132] Another leader-focused approached is the behavioral approach, which focuses on the behaviors that distinguish effective from ineffective leaders. There are two categories of leadership behaviors: consideration and initiating structure. Behaviors associated with the category of consideration include showing subordinates they are valued and that the leader cares about them. An example of a consideration behavior is showing compassion when problems arise in or out of the office. Behaviors associated with the category of initiating structure include facilitating the task performance of groups. One example of an initiating structure behavior is meeting one-on-one with subordinates to explain expectations and goals. The final leader-focused approach is power and influence. To be most effective, a leader should be able to influence others to behave in ways that are in line with the organization's mission and goals. How influential a leader can be depends on their social power – their potential to influence their subordinates. There are six bases of power: French and Raven's classic five bases of coercive, reward, legitimate, expert, and referent power, plus informational power. A leader can use several different tactics to influence others within an organization. These include: rational persuasion, inspirational appeal, consultation, ingratiation, exchange, personal appeal, coalition, legitimating, and pressure.[133]

Of the 3 approaches to leadership, contingency-focused approaches have been the most prevalent over the past 30 years. Contingency-focused theories base a leader's effectiveness on their ability to assess a situation and adapt their behavior accordingly.[133] These theories assume that an effective leader can accurately "read" a situation and skillfully employ a leadership style that meets the needs of the individuals involved and the task at hand. A brief introduction to the most prominent contingency-focused theories will follow.

The Fiedler contingency model holds that a leader's effectiveness depends on the interaction between their characteristics and the characteristics of the situation. Path–goal theory asserts that the role of the leader is to help his or her subordinates achieve their goals. To effectively do this, leaders must skillfully select from four different leadership styles to meet the situational factors. The situational factors are a product of the characteristics of subordinates and the characteristics of the environment. The leader–member exchange theory (LMX) focuses on how leader–subordinate relationships develop. Generally speaking, when a subordinate performs well or when there are positive exchanges between a leader and a subordinate, their relationship is strengthened, performance and job satisfaction are enhanced, and the subordinate will feel more commitment to the leader and the organization as a whole.[134] Vroom-Yetton-Jago model focuses on decision-making with respect to a feasibility set[133] which is composed of the situational attributes.

In addition to the contingency-focused approaches mentioned, there has been a high degree of interest paid to three novel approaches that have recently emerged. The first is transformational leadership, which posits that there are certain leadership traits that inspire subordinates to perform beyond their capabilities. The second is transactional leadership, which is most concerned with keeping subordinates in-line with deadlines and organizational policy. This type of leader fills more of a managerial role and lacks qualities necessary to inspire subordinates and induce meaningful change. And the third is authentic leadership which is centered around empathy and a leader's values or character. If the leader understands their followers, they can inspire subordinates by cultivating a personal connection and leading them to share in the vision and goals of the team. Although there has been a limited amount of research conducted on these theories, they are sure to receive continued attention as the field of IO psychology matures.

Follower-focused approaches look at the processes by which leaders motivate followers, and lead teams to achieve shared goals. Understandably, the area of leadership motivation draws heavily from the abundant research literature in the domain of motivation in IO psychology. Because leaders are held responsible for their followers' ability to achieve the organization's goals, their ability to motivate their followers is a critical factor of leadership effectiveness. Similarly, the area of team leadership draws heavily from the research in teams and team effectiveness in IO psychology. Because organizational employees are frequently structured in the form of teams, leaders need to be aware of the potential benefits and pitfalls of working in teams, how teams develop, how to satisfy team members' needs, and ultimately how to bring about team effectiveness and performance.

An emerging area of IO research in the area of team leadership is in leading virtual teams, where people in the team are geographically-distributed across various distances and sometimes even countries. While technological advances have enabled the leadership process to take place in such virtual contexts, they present new challenges for leaders as well, such as the need to use technology to build relationships with followers, and influencing followers when faced with limited (or no) face-to-face interaction.

IO psychologists are also concerned with organizational change. This effort, called organizational development (OD). Tools used to advance organization development include the survey feedback technique. The technique involves the periodic assessment (with surveys) of employee attitudes and feelings. The results are conveyed to organizational stakeholders, who may want to take the organization in a particular direction. Another tool is the team building technique. Because many if not most tasks within the organization are completed by small groups and/or teams, team building is important to organizational success. In order to enhance a team's morale and problem-solving skills, IO psychologists help the groups to build their self-confidence, group cohesiveness, and working effectiveness.[135]

The IO psychology and organizational behavior have manifested some overlap.[136] The overlap has led to some confusion regarding how the two disciplines differ.[137] There is also much confusion about the differences between IO psychology and human resources,[138] or human resource management[139]

There are many different sets of competencies for different specializations within IO psychology and IO psychologists are versatile behavioral scientists. For example, an IO psychologist specializing in selection and recruiting should have expertise in finding the best talent for the organization and getting everyone on board while he or she might not need to know much about executive coaching. Some IO psychologists specialize in specific areas of consulting whereas others tend to generalize their areas of expertise. There are basic skills and knowledge an individual needs in order to be an effective IO psychologist, which include being an independent learner, interpersonal skills (e.g., listening skills), and general consultation skills (e.g., skills and knowledge in the problem area).[143]

According to the United States Department of Labor's Bureau of Labor Statistics, IO psychology is the fastest growing occupation in the United States, based on projections between 2012 and 2022.[144] In a 2006 salary survey,[145] the median salary for a PhD in IO psychology was $98,000; for a master's level IO psychologist was $72,000. The highest paid PhD IO psychologists in private industry worked in pharmaceuticals and averaged approximately $151,000 per year; the earnings median of self-employed consultants was $150,000; those employed in retail, energy, and manufacturing followed closely behind, averaging approximately $133,000. The lowest earners were found in state and local government positions, averaging approximately $77,000. In 2005, IO psychologists whose primary responsibility is teaching at private and public colleges and universities often earn additional income from consulting with government and industry.[146]