I/O psychology is a 20th-century invention, but has roots in the late 1800s and early 1900s. The first psychologists to work in this area were experimental psychologists who were interested in applying psychological principles to solve organizational problems. In the US, early work focused on improving job performance and efficiency, while in the UK, the focus was more on employee fatigue and health.

Hugo Münsterberg and Walter Dill Scott are considered the main founders of I/O psychology. Hugo Münsterberg came from Germany, interested in the selection of employees and the use of the new psychological tests.

Hugo Münsterberg
See page for author, Public domain, via Wikimedia Commons

Walter Dill Scott 
Los Angeles Times, CC BY 4.0, via Wikimedia Commons

A major influence on the I/O field was the work of Frederick Winslow Taylor, an engineer, who studied employee productivity. He developed an approach called "Scientific Management" to handle production workers in factories.

This includes four key principles (Taylor, 1911):

  1. Each job should be carefully analyzed so that the optimal way of doing tasks can be specified.
  2. Employees should be selected according to characteristics that are related to job performance. Managers should study what existing employees do. Find out what personal characteristics are important.
  3. Employees should be carefully trained to do their job tasks.
  4. Employees should be rewarded for their productivity to encourage high levels of performance.

Frank and Lillian Gilbreth, a husband-and-wife team, also made a big contribution. Frank was an engineer, and Lillian was a psychologist. They studied efficient ways of performing tasks. Their best-known contribution was the time and motion study. Gilbreth's work served as a foundation of the field of human factors, which focuses on the study of design technology for people. Lillian also invented the food-pedal trash can and refrigerator door shelves, among other things.

Robert Yerkes 
http://www.psychegames.com/robert-yerkes.htm, 
CC BY-SA 4.0, via Wikimedia Commons

World War I helped I/O psychology grow quickly. In the UK, the Health of Munitions Committee (HMC) was formed in 1915 to improve worker health and safety during the war. At the same time, in the US, when the country joined the war in 1917, a group of psychologists led by Robert Yerkes offered services to the army. The Army Alpha and Army Beta group test for mental ability was developed to place new soldiers in best best-suited jobs. This was the first large-scale application of psychological testing to place individuals in jobs, and it provides a foundation for testing in educational settings (SAT) and employment settings.

Between the two world wars, the field of I/O psychology expanded. In the UK, Charles Myers co-founded the National Institute of Industrial Psychology (NIIP) in 1921. This organization improves the efficiency and working conditions of British employees. As well as in the U.S., at the same time in 1921, Penn State University awarded the first American PhD in what was then called industrial psychology to Bruce V. Moore.

At that time, psychologists started forming consulting firms. Such as Psychological Corporation, founded in 1921 by James McKeen Cattell, which today is called Harcourt Assessment.

One of the most important events at that time was the Hawthorne studies, which continued for more than 10 years at the Western Electric Company in the U.S. The best-known of the Hawthorne studies was the investigation of lighting-level effects. The objective of this study was to determine the lighting level that would produce optimal performance on a factory task. So, they conducted an experiment, and found that throughout the experiment, productivity increased, and had little to do with the lighting level.

Many explanations were suggested, and the popular one is called the Hawthorne effect, the idea that is, the knowledge of being in an experiment caused an increase in performance. It seems clear that social factors can be more important than physical factors in people's job performance.

World War II also influenced the development of I/O psychology. As a result of the war, the APA formed Division 14 of Industrial and Business Psychology in 1945. In 1970, Division 14 of the APA changed its name and became the Society for Industrial and Organizational Psychology (SIOP). 

Society for Industrial and Organizational Psychology (SIOP)
Mbrickn, CC BY 4.0, via Wikimedia Commons

Readings:
Spector, P. E. (2006). Industrial and organizational psychology: Research and practice (4th ed.). John Wiley & Sons, Inc..