The Historical Development of Industrial and Organizational Psychology
Industrial and organizational psychology had its origins in the early 20th century. James Cattell (1860–1944), Hugo Münsterberg (1863–1916), Walter Dill Scott (1869–1955) had been students of Wilhelm Wundt, the father of experimental psychology.
Before the First World War they focused consulting, selecting and training employees, and advertising—things that would later fall under the umbrella of industrial psychology (it was only later in the century that the field of organizational psychology developed as an experimental science) (Katzell & Austin, 1992). In addition to their academic positions, these researchers also worked directly for businesses as consultants.
Early pioneers and their contributions
James McKeen Cattell helped establish psychology as a practical, measurable science and contributed to the early use of testing and assessment. He also helped professionalize applied psychology through publishing and consulting work.
In 1913, Hugo Münsterberg published Psychology and Industrial Efficiency, which addressed employee selection, training, and advertising—topics that remain central to I-O psychology today.
Walter Dill Scott was among the first psychologists to apply psychological principles to advertising, management, and personnel selection. In 1903, Scott published two books: The Theory of Advertising and Psychology of Advertising. They are the first books to describe the use of psychology in the business world. By 1911 he published two more books, Influencing Men in Business and Increasing Human Efficiency in Business. In 1916 a newly formed division in the Carnegie Institute of Technology hired Scott to conduct applied research on employee selection (Katzell & Austin, 1992).
World War I and the growth of personnel testing
When the United States entered World War I in April 1917, psychologists’ work expanded dramatically. Robert Yerkes, then president of the American Psychological Association (APA), helped organize efforts under the Surgeon General’s Office to screen and classify recruits.
This work produced the Army Alpha test (verbal) and Army Beta test (nonverbal), which were used at an unprecedented scale—nearly two million men were tested. However, these tests are also widely recognized as culturally biased, reflecting education and familiarity with dominant U.S. culture rather than purely “innate” ability.
At the same time, Scott and Walter Bingham (1880–1952) worked under the Adjutant General’s Office to develop officer selection methods, including early job descriptions, performance ratings, and occupational skill assessments.
After the war, personnel selection research continued to grow. For example, Millicent Pond, who received a PhD from Yale University, worked at several businesses and was director of employment test research at Scoville Manufacturing Company. She researched the selection of factory workers, comparing the results of pre-employment tests with various indicators of job performance. These studies were published in a series of research articles in the Journal of Personnel Research in the late 1920s (Vinchur & Koppes, 2014).
The Hawthorne Effect
From 1929 to 1932, Elton Mayo and colleagues conducted a series of studies at Western Electric’s Hawthorne Works near Chicago. These projects pushed the field beyond selection and placement and toward questions about:
- motivation
- supervision and leadership
- group norms
- workplace relationships
The work began as an investigation of physical conditions (like lighting), but researchers became increasingly interested in how social and psychological factors influenced productivity.
Analysis of the findings by later researchers led to the term the Hawthorne effect.
the Hawthorne effect
The Hawthorne effect describes the increase in performance of individuals who are aware they are being observed by researchers or supervisors.
What the original researchers found was that any change in a variable, such as lighting levels, led to an improvement in productivity; this was true even when the change was negative, such as a return to poor lighting. The effect faded when the attention faded (Roethlisberg & Dickson, 1939).
The Hawthorne-effect concept endures today as an important experimental consideration in many fields and a factor that has to be controlled for in an experiment. In other words, an experimental treatment of some kind may produce an effect simply because it involves greater attention of the researchers on the participants (McCarney et al., 2007).
Early Organizational Psychology
In the 1930s, researchers increasingly studied employees’ experiences and attitudes at work. Kurt Lewin helped shape this shift by studying how leadership styles and group dynamics influence behavior.
One classic example is Lewin and colleagues’ research on leadership styles—often described as autocratic, democratic, and laissez-faire—and how these styles influenced aggression, group climate, and satisfaction (Lewin, Lippitt, & White, 1939). Lewin also coined the term group dynamics, helping establish a foundation for later research on teamwork, norms, cooperation, and communication.