Psychology has enormous application potentials in industry and organizational sectors. In modern times, most people earn their livings by working in industries and business organisations. The output in the business sector largely depends upon the efficiency and motivation of the employees. If the human resources in the organizational sectors are not properly cultivated, the productivity will decrease in spite of modern technology, and sophisticated equipments.
This branch applies the principles of psychology in the workplace to improve employee and organizational effectiveness. Hence, it is one of the very popular branches of psychology. The industrial psychologists study the employer-employee relationship, the causes and prevention of accidents, the morale of the employees, problems of absenteeism and labor strikes, the effectiveness of financial and non-financial incentives, and the factors influencing the work efficiency of the employees.
Organizational psychologists apply psychological principles in selection of employees, training and counseling employees, improving their work motivation, managing conflicts, and improving the total organizational culture. The human aspects and its mobilization for improving organizational effectiveness constitute the major aim of the organizational psychologists.