What Is Business Psychology? A Complete Explanation
Updated: February 16, 2023
Published: August 12, 2020
Business psychology is an exciting and diverse field. In this article, we’ll discuss what business psychology is, the many types of business psychology careers, and the tasks and roles of a business psychologist.
Business psychology is also a lucrative and well-paid job, so we’ll lay out the education and steps needed to become a business psychologist, plus the salary you can expect if business psychology is the right fit for you.
What Is Business Psychology?
Business psychology, also known as industrial-organizational psychology, combines the science of human psychology with practical business application in order to improve the work environment for employees, improve productivity in businesses, and organize groups of people in companies.
What Is A Business Psychologist?
A business psychologist examines employees and companies with the goal of improving productivity and the work environment. A business psychologist evaluates the company’s goals, work strategies, and employees in order to assess areas and tools for improvement.
They may also help assess prospective employees to ensure that they are right for the role and company, and may develop leadership and training programs in order to incorporate new employees and improve skills in the workplace.
Industrial-Organizational Psychology Vs. Business Psychology
Though the terms are sometimes used interchangeably, and are commonly merged roles, there is a difference between industrial-organizational psychology and business psychology.
Industrial-organizational psychology is the field that studies the workplace and small group theory and applies it to personal and individual workplace issues. It focuses on employees, company culture, productivity, morale, and team-building.
Business psychology, on the other hand, is broader than industrial-organizational psychology, and applies psychological practice and theory to the big-picture issues. This may include business strategies, stakeholder relationships, market performance, and business operations.
For the sake of this article, we will be using the term business psychology to cover both of these areas of the field.
Photo by Lukas from Pexels
Business Psychology In Practice
The practice of business psychology includes various areas of expertise, including:
1. Advice
Business psychologists offer an unbiased and psychological perspective on personal and interpersonal issues in the workplace.
2. Diagnosis
By using scientific research methods on human behavior and psychology, business psychologists help companies understand issues and challenges that arise in the workplace.
3. Design
Business psychologists design programs and solutions that are geared toward the company’s unique issues, as well as design training and assessment programs.
4. Delivery
Business psychologists may also help implement and facilitate solutions and programs in the workplace.
5. Evaluation
The business psychologist evaluates scientific research and demonstrates its evidence to the company in order to show the benefits of intervention in the company.
What Does A Business Psychologist Do?
Below is a list of some of the various roles and tasks that a business psychologist is responsible for in the workplace. Depending on what kind of business psychologist someone is, they may focus on a few specific tasks, or perform a large range.
- Researches scientific and psychological studies that are relevant to human psychology, behavior, and the workplace.
- Advises employers and CEOs based on this research.
- Devises plans for improving employee performance, efficiency, and motivation.
- Researches and implements methods of assessing employees, developing leadership, ensuring workplace safety, maintaining work-life balance, and diversity in the company.
- Improves methods of hiring, employee feedback, training, and management for the company managers.
- Develops training and leadership programs for the employees and management teams.
- Assists with employee selection.
- Designs solutions to ensure a positive work environment.
- Performs employee appraisals and evaluations.
- Provides employee counseling.
- Designs initiatives for employee health and well-being.
- Improves the business’s organizational and management structure.
Photo from Pexels
Where Does A Business Psychologist Work?
Business psychologists can work in a variety of places and roles. They may work in the private or public sector, and for small or large companies.
Privately, business psychologists may be in leadership positions, human resources, office management, unions, and training administration.
In the public sector, business psychologists may work for various departments, such as the Department of Veterans Affairs, Federal and State Prisons, Department of Defense, Department of Labor, and public school systems.
Career Options For A Business Psychology Degree
With a degree in business psychology, you have numerous job options. Below are some of the related jobs that are available to holders of a business psychology degree.
Business Psychologist Or I/O Psychologist
As a business psychologist or I/O psychologist, you will be able to work in federal or state agencies, marketing and sales, human resources, college professor, or in a private practice.
Related Jobs
Other jobs related to the business psychology field span a wide range of roles, including jobs as a business coach, consultant or facilitator, as well as roles such as human resources coordinator, organizational development or effectiveness consultant, organizational psychologist, or personnel psychologist.
Photo by Rebrand Cities from Pexels
How To Become A Business Psychologist
Step 1: Bachelor’s Degree
In order to study business psychology, you can earn any bachelor’s degree, but many choose related fields such as business or psychology.
If your end goal is to become a business psychologist, consider earning your bachelor’s degree online, so that you can earn a degree from anywhere in the world. University of the People is a completely online and tuition-free university that offers bachelor’s degrees in business administration. We take pride in ensuring that quality education is available and affordable for all prospective students.
Step 2: Master’s Degree Or PhD
In order to become a business psychologist, a master’s degree can be enough to land the role, but a PhD helps give an edge in the field.
In addition, PhD studies will include practice hours, which will help if your state requires licensing practice.
Graduate Option 1: Internship
Once you’ve earned your degrees, many graduates may choose to complete an internship program. Internships give graduates the opportunity to gain experience and mentorship under practiced psychologists. In addition, internships are a great way to get into the field and land a job once your internship is complete.
Graduate Option 2: Find A Job
Some interns may continue jobs with their company. Other graduates may choose to search for jobs directly after their education, and will look for entry-level jobs in their field.
How Much Does A Business Psychologist Make?
Business psychology is a successful and lucrative field. According to the Bureau of Labor Statistics (BLS), the median salary for a business psychologist ranges from $92,880 to $111,150.
In certain business-dense areas, business psychologists are even more valued. For example, salaries in California are as high as $145,410, and in Washington, D.C., as high as $170,420.
Additionally, the BLS predicts a job growth and demand of business psychologists by 8% between 2016 and 2026.
To Sum Up
Business psychology is a fascinating and dynamic career. The many facets of the field create opportunities for various kinds of roles and jobs. Whether you’re interested in practical psychological research, intricate problem solving, or business efficiency, business psychology might be just the right career for you.
Becoming a business psychologist requires a master’s degree and plenty of experience, but the work will be rewarding and exciting if you decide to take this career path.