Importance of Industrial Psychology in Human Resource Management

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Do you believe psychology is only about students, academics, and psychiatrists? The truth is psychology has become a vast area, and people can apply it in many ways in their day-to-day lives. Psychology is an intriguing subject as it helps people understand other people’s thought processes, behaviors, and patterns. People who have an insight into psychology are better decision-makers, can read other people’s minds, and understand their emotions. They can think critically, are keenly observant, and analyze all aspects before concluding anything. Modern business realizes the importance of psychology and applies it to make informed decisions and enhance functioning. Aside from other departments of an organization, it holds extreme significance in human resource management.

Human Resource

Human resource is an integral component of organizations. Contrary to popular belief, HRM, Human Resource Management, is not only about recruiting people, but it is one of their essential tasks. Over the years, HRM has evolved significantly, and today, it handles more responsibilities. HRM looks after payroll processes, arranges outings for companies’ employees, tracks employees’ performances, oversees all departments’ alignment, and supervises several other operations. The recruitment, training, and development of policies to retain employees is another significant aspect of HRM. HRM can benefit from an insight into psychology as it helps them understand people’s behaviors and make better organizational decisions. Since HRM’s primary focus is dealing with people, understanding psychology assists HRM to fulfill its responsibility efficiently.

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In the modern world, psychology has taken the shape of a full-fledged field and encompasses several subfields. Individuals who want to join this field can opt for a bachelors in psychology degree and equip themselves with an amalgamation of essential skills. Industrial psychology is a branch of psychology, and as the name implies, it applies psychological theories to organizations.

Industrial Psychology

Industrial psychology results in increased workplace productivity, enabling employees to use their skills and work more efficiently. Industrial psychology applies to various tasks in an organization. It helps in analyzing people’s abilities for recruiting them for their jobs. Moreover, it also deals with how organizations affect individuals’ behaviors and can take advantage of their capabilities. It helps in addressing organizational concerns and work to prevent potential issues. Industrial psychology applies to six main subject areas: ergonomics, employee selection, performance management, work-life, training and development, and organizational development. Industrial psychology is becoming one of the prevalent disciplines of psychology. Many organizations now realize its significance and employ its’ degree holders to enhance their companies’ efficiency.

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Below we are listing some points that will shed light on the matter of industrial psychology in human resources management:

  1. Employees’ Retention

Many organizations suffer from employees leaving their jobs as inducting new people takes time and requires effort. Industrial psychology helps HRM devise strategies that help in retaining employees. HRM gives some autonomy to staff members, empowers them, and makes them feel an essential part of originations. HRM’s job is not limited to discipline and train employees as they are also in charge of developing policies for the betterment of organizations. Industrial psychology helps HRM come up with win-win situations that offer benefits to employees and profit to organizations.

  1. Hiring of Staff

HRM deals with the applications, conduct interviews, and recruits new hires. Taking new people on board is a crucial component of operating an organization, as new people have to look after significant tasks of companies. Recruitment is not only about leafing through resumes and conducting a question answers session with candidates as it entails much more. Candidates may tick all the required boxes, but they may not meet the criteria of personality tests. Applying industrial psychological principles assist HRM in analyzing people’s behaviors, and they assess if candidates will be appropriate for the position.

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  1. Problem Solving

When people work together in an environment, differences of opinion arise, and disputes occur. Sometimes it all happens due to miscommunication, and at others, personality clashes lead to many issues. HRM professionals do not only pinpoint the problems; they look deep into them to determine the cause. Industrial psychology makes them keenly observant, and they give attention to detail. HRM people with industrial psychology hardly miss out on anything and can gauge the situation in one glance. HRM professionals can study behaviors and minds, enabling them to determine the cause of problems and help them eliminate them. They review organizations’ policies and keep their past experiences and companies’ performance to solve problems. 

  1. Embracement of Change

Organizational practices do not stay stagnant as HRM continues to evaluate the results and measure companies’ efficiency. With time they often introduce new functions and strive to be innovative to enhance workforce productivity. Furthermore, technological developments keep bringing new things to the fore and compel HRM to bring about new policies. Studying industrial psychology helps HRM keeps an open mind and embraces change readily. Not only do they adopt new practices quickly, but they are also often the trendsetters and set an example for other employees to adapt to new techniques.

  1. Leadership Qualities

Industrial psychology equips people with leadership skills, such as analytical thinking, active listening, decision making, and many others. HRM often has to make instant decisions on behalf of other employees. Leadership skills help them evaluate the situations and decide without investing much time. Besides, HRM professionals use their skills to predict future patterns, devise strategies, and make decisions accordingly. Leadership skills enable them to persuade people, keep them together to strive for the common goal. Since HRM is the link between higher authorities and the workforce, they often have to convey messages here and there. Effective communication enables them to send precise messages back and forth. 

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Experts define psychology as the study of mind and behavior. Industrial psychology and human resource management have many elements that are alike. Human resources deal with people, and in the modern business world, HRM’s role has become more of an administrative role than the strategic one. Industrial psychology applies psychological principles in an organizational setting and helps people understand work conditions better. HRM examines people’s behavior and minds and utilizes their skills for the betterment of their firms.

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