Is it time to bring a psychologist into your organization? You may think of an office psychologist as someone you discuss your personal and professional struggles with while enjoying your session in a room filled with ambient background music and a comfortable leather couch. Well, there is a lot more to it than that.

What is organizational psychology?

Organizational psychology is an area of psychology that is primarily concerned with aligning the interests of the company with the needs of its employees. It aims to improve the quality of life and work conditions of employees to achieve greater performance and boost company efficiency.

What benefits can companies get from organizational psychology?  

Investing in organizational psychology offers numerous benefits. It is a new field of psychology that takes into account the interests of the company and its employees, suggesting a win-win scenario for both parties. An organizational psychologist can serve as an intermediary between upper management and the workforce, understanding and respecting the goals, perspectives, and motivations of both sides. 

The main task organizational psychologists are assigned to is proposing strategies to build an organizational culture that encourages a healthy environment, which generates a greater increase in productivity, engagement, thus profitability.

The assumption that caring about the commitment and job fulfillment of employees are the driving forces behind company success is, in fact, supported by many studies. According to recent research papers, high employee engagement has proven to reduce absenteeism and turnover, while increasing company sales and profitability.

Employee turnover is particularly costly for companies. According to data from the Society of Human Resources Management (SHRM), the cost of replacing a qualified employee is approximately 6 to 9 months worth of their annual salary, varying according to their position, wage, and tenure. For example, the cost of replacing an employee who earns $60,000 a year would be between $30,000 to $45,000! This amount accounts for the expenses incurred for recruiting, hiring, and training a replacement.

How does organizational psychology benefit employees?

Many executives we’ve spoken to have highlighted that the main challenge for them is understanding the needs, goals, and motivations of their employees. This struggle follows you along as you grow your business–and the more employees join your team and the more your staff grows, the greater the challenge! An organizational psychologist, on the other hand, will help you to handle this challenge effectively by providing outlets where the communication gap between managers and employees no longer exists, and each worker is valued and cared for regardless of the size of the company.

Organizational psychologists focus on understanding the preferences of each employee, address topical issues, and suggest preventive and curative measures and programs to be implemented by the higher management. In addition, they can work with executives to improve soft skills to better connect with their team members. The overall goal of the organizational psychologist is to empower each and every person in the company and to encourage them to have healthy personal and work lives, as well as strengthen relationships within the company.

In which areas of the company does organizational psychology intervene?

Among other tasks, organizational psychologists are also in charge of the recruitment process. Their main objective is to provide the company with the candidates that are the best fit for the company's needs–an increasingly topical challenge for every business, considering the cost of recruitment, training, and retention.

What’s more, an organizational psychologist often acts as a mediator in situations of conflict between employees, facilitating negotiation and settlement by providing direction and encouragement to both parties. They aim to find the middle ground between the disputing parties and reach a fair resolution of the conflict that not only protects the interests of the company, but also preserves the integrity of individuals. 

Finally, and perhaps most importantly, an organizational psychologist aims to motivate team members and encourage them to be result-oriented in order to facilitate employee development and personal growth.

How can the organizational psychologist motivate employees? 

There are several techniques that organizational psychologists apply to achieve the goal of creating a happy, successful business and workforce. Some of the common approaches are the following:

  • Group activities are designed to improve work relationships and to strengthen the connection between the organization and its human capital.‍
  • Training programs of all kinds (leadership, negotiation, etc.) and for all levels of the organization ensure that every individual within the company is constantly upgrading their skills and striving to reach their full potential.‍
  • Promotion programs provide stability and security for employees as they appreciate the recognition of their hard work and effort, allowing them to think long-term and be truly invested in contributing to the success of the company.

Organizational psychology plays a crucial role in many areas of the organization and has many functions that benefit both the company and the workers. Therefore, investing in effective organizational psychology within the company is investing in both your employees’ quality of life as well as the overall success of your business.

Does your organization have over 50 employees? Find out how psychologist-trained Erudit can diagnose burnout, engagement, and turnover risk in 24 hours. Better understand your workforce and whether you need to invest further in employee wellbeing.

You may also download this report comparing traditional detection of wellbeing indicators by psychologists and by artificial intelligence.

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