How Psychologist’s Stimulate The Economy

Created by careersinpsychology

"Ultimately, what we do impacts the bottom line."   Dr. Kizzy Dominguez

Psych EconomyWithout doubt, the most popular stereotype of the traditional psychologist is a man or woman positioned in a chair, notepad in hand; a client resting comfortably on a therapy couch or divan. And while the image may accurately characterize well-known psychology practices; today's psychologists are just as likely to be found in extended settings such as; coaching executives amidst a robust round-table session; developing dynamic group strategies on an Elmo or consulting with team leaders about effective verbal cueing techniques.

How It Works

While psychologists still help clients on an individual basis with issues regarding relationships with co-workers and family systems; another approach increasing in popularity is the application of psychological principles to the workplace. Known as Industrial Organizational Psychology (I/O); specialists in this unique field have expertise in improving job-related relationships and working conditions for employees and their employers.

While the goal of the psychologist is to utilize their research and knowledge to help people, the business, corporation or government; the resulting dividends include: cost-effective and increased production; an energized work environment; happier and healthier employees and better offerings of goods and services. Each of these benefits ultimately translate into higher profit margins. These increased profits, quite naturally, stimulate the economy in a multitude of ways.

Speaking the Language

As with any specialty within a discipline;  I/O psychology wields its own idiosyncratic applications, goals and industry vocabulary. Recognized terminologies include:

  • The leveraging of a diverse and inclusive workforce
  • Leadership accountability
  • Transparent communications
  • Enlistment of external support from outside associates and groups
  • "Gold standard" work environments
  • Behavioral safety
  • Safety Leadership
  • Strategic business drivers
  • Organizational effectiveness
  • Whole-of-organization approach
  • Assessing achievement relative to opportunity
  • Diversity dividend
  • Driver of organizational effectiveness and profitability
  • Talent management

As might be expected, professional websites of large corporations, businesses and government increasingly evidence the popularity of a psychological approach in their organizations which is reflected in their mission statements and goals. The Northrop Grumman website is one example of how corporations, which are dedicated to economic development and growth, have reinvented and reframed their approach to increased profitability over the century.  Accessing the company's "Diversity & Inclusion" tab  produces their statement regarding "Diversity and Inclusion Vision, Mission and Strategic Objectives." A quick glance at the page successfully demonstrates the pervasiveness of the abovementioned concepts and vocabulary; as well as the frequency of their utilization (link provided).

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What Does It Mean?

At the risk of over-simplification; the industry-specific language above could be synopsized in the following vernacular:

  • We strive to hire and promote women and minorities, equal to all others.
  • We believe every culture, gender and race brings value to the corporate table.
  • Profits are generated and increased when our leadership and workforce are multifarious.
  • We endeavor to provide a physically safe environment for all workers and seek to eradicate risk of inadvertent injury.
  • We need to be clear and mindful with all personnel in verbal and written announcements, statements, correspondence and the like.
  • Our executives are expected to take responsibility for their actions and any collateral repercussions.
  • We want the work environment to be healthy and happy.
  • We want our employees to be healthy and happy.
  • Individuals are unique in their gifts and proclivities. Efficiency, productivity and profit are maximized when people are placed in jobs for which they are
  • It pays to be fair.
  • Risk is reduced when every employee is empowered and working as a "team" with all others.
  • Human beings, not machines, create profit.

What Does This Look Like in Everyday Life?

The most important aspect of theory is what happens when it's applied to reality. Questions like, "How do psychologists make workplaces happier and safer?" "How do they work in a corporate environment?" "What type of person is successful in this career?" "Why does the work of these particular psychologists ultimately stimulate the economy?" If for no other reason, it is important for students to query relevant questions such as these to properly survey the sub-specialty in relationship to the full spectrum of employment choices in the field of psychology.

RELATED STORY - How Fortune 500 Companies Use Psychology

Ecpert in the Field: Dr. Thomas Boyce

5For over two decades, Dr. Thomas Boyce has elevated industry standards with  his extensive expertise and remarkable ability to inspire those with whom he consults, trains, educates and advises; as well as those he motivates at conferences across the nation. He earned his Doctorate in Psychology at Virginia Tech (APA accredited) and is the President and Senior Consultant at the Center for Behavioral Safety, LLC. Dr. Boyce has also been a Professor of Psychology at the University of Nevada, Reno; and has authored the book, "The Psychology of Leadership: AWAKEN Your Work Culture’s Full Potential in 2 Science-Based Steps!"

CIP was fortunate to have interviewed Dr. Boyce about his copious achievements and exceptional status in the field.

CIP: Dr. Boyce could you start out by giving us the ABC's of what IO Psychology is?

TB: Typically industrial psychologists (the I part of the IO), do a lot of tests and measurements; so they are creating questionnaires that can survey perceptions and attitudes of the employees on various aspects of the work environment. The organizational psychologists (the O folks) tend to work more with performance  improvement and so are concerned with 'What can we do to get employees to perform differently, to perform better to improve the output or outcome at our organization?' That is the area in which I practice.

CIP: From what I have read about you, you have a special approach to your practice..

TB: I come from a very specialized school of thought; it's out of the tradition of behavior analytic psychology which subscribes to the philosophy that the environment in which people are working impacts what they do. So the challenge that I have is to help leaders in organizations to recognize that the systems (and that can include rules, regulations, policies, how folks communicate; and how those rules, regulations and policies are used or not used) impacts what the employees are doing. So, if they want to change what the employees are doing or the output or outcome of that behavior; they often have to take a look at the system itself. It was the economist, W. Edwards Deming who was credited with changing the way the Japanese auto industry functioned. He said that the system is going to produce exactly what it should; and if you want to change the output of the system you have to change the system itself. That is what I have been helping leaders at organizations to do for the past 22 years.

CIP: Can you explain how the work culture affects employee behavior?  

TB: Let me explain this with a hypothetical. Let's say we have a formal bonus system; so people can get extra compensation for accomplishing certain things. Ninety percent of that bonus is focused on some measure of production. Like 'What are people getting done? How much of a product are they making? How much of a mineral are they mining?' Something of that nature. Only a small portion of that bonus, the 10%, is focused on safety; injury prevention, doing things that will keep the employees from getting hurt at work. What we can predict is that when you take a look at the behaviors folks are engaging in, that there will be 9 times more emphasis placed on getting the work done then there will be on some measure of  preventing injuries.

CIP: How does this apply to organizational leadership?

TB: The same thing can happen when leaders talk more about one aspect of the business than another. And it may not be intentional. The same thing can happen when we have more measures of one thing for the business than another. The employees are going to assign more importance to those things that are more visible and more prevalent and more frequently discussed. If we want to change how the employees balance their time or influence their decisions; than we have to change how we, as leaders, are ourselves looking at these things.

CIP: It would seem to be obvious, but I guess it's not, that businesses would realize "If we make our people happy, we will get better work from them." But they don't!

TB: It's so true; they don't. I'll give you another example: The reason rules, regulations and policies are typically set  up to 'threaten'  punishment for poor performance is because it's efficient. Folks only have to go out and look at things when they're not going well and then they try and find out who's culpable to reprimand to whatever extent their policies allow them to do that. Typically it will produce, at least on the surface, a change in behavior--as long as folks know what to do differently. The problem is, it's a short lived change in behavior that typically only happens when the person has the authority to do the punishing is nearby.

CIP: Would it be safe to say that for psychologists in this field it's about motivating and helping people to help themselves, which in turn helps the company?

TB: Absolutely. And it's about motivating the right way. It's about motivating the right way because there are folks who believe that you motivate people by threatening a negative outcome for poor performance. That does motivate people to a certain extent, but it comes at a cost. That cost is lower morale and behavior that produces the bare minimum to avoid the penalty.

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  • What it looks like to practice psychology is changing. In addition to research and clinical careers, increasing numbers of psychologists are creating fulfilling métiers within the field of IO psychology; psychology of the workplace.
  • The research, teachings and careers of psychologists like Dr. Thomas Boyd have profoundly affected the way in which leaders of organizations work.
  • Leaders are being given psychological tools by experts like Boyd, in order to inspire employees; ultimately resulting in quantitative changes in safety, efficiency and production. Increased production generates greater profit margins which ultimately stimulates economic growth.
  • Evidencing the integration of psychological concepts in the workplace are the language choices currently utilized by corporations and government agencies.
  • The goals and values of industrial and business entities (both public and private) have evolved to include: fairness; opportunity for women, minorities and those steeped in other cultures; a sense of executive responsibility; a drive to have healthy, happy employees and work environments and recognition of the individual and proper placement as an intrical part of financial success.

Translating language into reality involves understanding the complexities of the field and the specific needs of clientele.