Applications of Industrial and
Organizational Psychology:
Benefits for Acme Aluminum
Trial Case Study
The Skeptical CEO
Behavioral Factors
APPL 641
Submitted by
Linda Mullins
September 17,1998
 Applications of Industrial and Organizational Psychology: Benefits for Acme Aluminum

Note: double space for submission and include page numbers


  Like many organizations in today’s economic climate, Acme Aluminum has experienced tremendous growth over the past five years.  Rapidly changing environments in today’s organizations will benefit from the application of Industrial/Organizational (I/O) principals more than ever before.  To begin, this paper briefly describes I/O psychology and its development as an important field of scientific research, with applications useful in improving organizational performance.  This provides a framework for further discussion relating the methods and applications of I/O knowledge and its potential impact on Acme Aluminum, Corp.
    I/O psychology is a behavioral science that focuses on behaviors related to the work environment.  As with any science its goal is to build a body of knowledge through systematic investigations, gathering empirical facts, and by a distinctive set of constructs employed in interpreting the data.  It is an interdisciplinary field, gathering and using knowledge form a number of other disciplines such as sociology, political science, communications, and business (Beehr, 1996).  As a behavioral science it studies human behavior (and that of lower animals) in their physical and social environment by experimental and observational methods.  Behavior involves the interaction between people (individual differences) and the environment (situational differences) (Lewin, from lecture).

 History of I/O Psychology

     Throughout its history I/O psychology has maintained a commitment to scientific research and its applications.  I/O psychology has its roots in experimental psychology, that part of the discipline that seeks to understand general principles of behavior.  These principles are useful in predicting how modifications of work conditions affect work behavior.

     Landy and Trumbo (1976) talk about three independent movements that have developed in I/O psychology.  The first of these, the testing movement (personnel psychology), focuses on individual differences.  This area uses and develops research tools such as test batteries and measurements of performance.  The second, human relations movement was sparked by the Hawthorne studies, credited by Beehr (1996) as leading to the development of organizational psychology.  The Hawthorne study’s novel research approach shifted the focus from bureaucratic and scientific management, with the perspective at the organization level, to employee’s reactions and effects of social influences.  This movement used the work of Maslow and Rogers to develop theories relating to topics such as motivation and job satisfaction.  The third movement, experimental/industrial engineering (human factors engineering), combines methods of industrial engineering and experimental psychology with a focus on the human/machine interface.  This area is thought of as a separate field, but it is important to note that the three movements share “the common goal of understanding the relationship between people and work” (Landy & Trumbo, 1976).

     The development of the human relations movement reflects one of the underlying values of organizational psychology, that “the person is as important as the organization” (Beehr, 1996).  This stresses that the organization and the individual are equally important.  What is good for the individual is advantageous for the organization, creating a mutually beneficial situation.  Organizational psychology applies behavioral science knowledge for the improvement of both the individual and the organization.

     The field of I/O psychology is generally divided into three levels for investigation and application.  The individual level is concerned with how individuals may be different from one another, such as personality traits, abilities, and work related attitudes.  The second level, the group level, focuses on the behavior of groups within an organization.  Group measures may include factors such as communication patterns, group cohesiveness, and group decision making.  At the organizational level the focus is on diffused, higher level factors that impact the behaviors of individuals in the organization.  It deals with broader issues that effect the organization at a macro level, such as organizational structure or technology available to members within the organization.  Organizational investigations can range from interactions between two or more groups within an organization to comparisons across organizations (Beehr, 1996).


     For reasons unclear to management, two of the ACME plants in the Northeast are experiencing problems with labor unions and morale.  There is the possibility that the two are related.  For instance, problems with working conditions could contribute to low morale.  Morale is defined as the prevailing temperament of the individuals forming a group.  It is concerned with issues such as confidence in the group and the individuals’ role within the group.  Morale problems are often related to higher rates of absenteeism and turnover, resulting in increased production and training costs (Locke, 1976).

     As an intern with ABTADT, Inc., I conducted a morale survey in an attempt to determine why the company had problems with a high turnover rate.  Due to the loss of experienced employees, there were high costs in production and overhead, and associated training costs for new, less experienced replacements.  The survey results indicated employees were getting “burned out” due to extended work hours.  This led to the implementation of revised work schedules and a training program for stress management.  Employee turnover was reduced by 65% in the first year, with an associated cost savings of 20%.  At the end of the first year the survey was repeated with a 72% increase in morale.  It should be noted here that these changes may have been, in part, due to other factors.  The research design does not allow a causal relationship to be inferred.

     It is recommended that a similar approach be used at ACME.  In the first phase the ‘in-person’ technique will be used to administer morale surveys to a randomly selected group of employees.  Although survey data collection using the in-person technique is more costly than mail or phone surveys, there is the advantage of increased response rates (sometimes reaching 90%) (SPSS, 1991).  This morale survey is non-intrusive, requiring less than fifteen minutes of the employees time.  Debriefing interviews will be used to gain further insight into employee morale issues.  In an effort to gain honest reactions, respondents are assured of confidentiality.  In addition to measuring overall employee morale, this survey breaks the responses into meaningful sub-components.  Knowledge of the sub-components related to employee morale allow diagnostic procedures to focus on specific problems.  Phase two will use the findings of the first phase to make tailored recommendations for improving employee morale.


     The application of (I/O) principals, derived from systematic research, can help today’s organizations keep pace in a rapidly changing world.  Research techniques can be used to investigate Acme declines in morale, and possibly make suggestions for improvement.


     An overview of survey design using SPSS (Training Manual).  (1991).  Chicago:  SPSS.

     Beehr, T. A. (1996).  Basic organizational psychology.  Needham Heights, Massachusetts:  Allyn & Bacon.

     Landy, F. J., & Trumbo, D. A. (1976).  Psychology of work behavior.  Homewood, Illinois:  The Dorsey Press.

     Locke, E. A. (1976).  The nature and causes of job satisfaction.  In M.D. Dunnette (Ed.), The handbook of industrial and organizational psychology.  Chicago:  Rand McNally.

     Mitchell, T. (1998).  Lecture