The birth of industrial psychology

Hugo Munsterberg created the field of industrial psychology with the publication of his text Psychology and Industrial Efficiency in 1913. He argued for the scientific study of human behavior to identify general patterns and to explain individual differences .Interestingly, Munsterberg saw a link between scientific management and industrial psychology. Both increased efficiency through scientific work analysis and through better alignment of individual skills and abilities with the demands of various jobs.

Munsterberg suggested the use of psychological tests to improve employee selection, the value of learning theory in the development of training methods, and study of human behavior in order to understand what techniques are most effective for motivating workers. Much of our current knowledge of selection techniques, employee training, work design, and motivation is built on Munsterberg’s work.


Following the stock market crash of 1929, the United States and much of the world’s economy entered the Great Depression. To help relieve the effects of the depression Labor force, President Franklin D Roosevelt supported the Wagner Act, which was passed in 1935. This act recognized unions as the authorized representatives of workers, who would be able to bargain collectively with employers in the interests of their members. The Wagner Act would prove to be the Magna Carta of labor. It legitimized the role of trade unions and encouraged rapid growth in union membership. In response to this legislation, managers in Industry became much more open to finding new ways to handle their employees. Having lost the battle to keep unions out of their factories, the management tried to improve the working conditions and seek better relations with its workforce. A set of studies done at Western Electric’s Hawthorne plant would be the prime stimulus for the human relations movement that swept American industry from the late 1930s through the 1950s.


The essence of the human relations movement was the belief that the key to higher productivity in organizations was increasing employee satisfaction .In addition to the Hawthorne studies, three people played important roles in conveying the message of human relations: Dale Carnegie, Abraham Maslow, and Douglas McGregor.

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