What is Business Psychology?

“Business Psychology is the study and practice of improving working life. It combines an understanding of the science of human behaviour with experience of the world of work to attain effective and sustainable performance for both individuals and organisations”

Applied Science

Business Psychology is an applied science that investigates how to make people and organisations more effective.  It uses social scientific research methods to study people, workplaces and organisations in order to better align their multiple and sometimes competing needs. Its goal is to create healthy and productive relationships between people and organisations for mutual benefit.

As an applied science, Business Psychology does dictate to organisations what constitutes effective organisational practice. It has a reciprocal relationship with business and draws insights from those with experience of what works at work. This enables psychological research to be applied pragmatically and in a way that is appropriate to the situation. It also allows a cross fertilisation of experience from business into psychology and of academic knowledge and rigour from psychology into business.

Research methods

Business Psychology employs wide range of social scientific research methods to investigate what constitutes best organisational practice. It uses a combination of qualitative and quantitative methods and considers both types of evidence equally legitimate. Common data collection methods include questionnaires, surveys, focus groups, interviews and case studies. Common analytical techniques include descriptive and inferential statistics, thematic and content analysis.


Practitioners of Business Psychology typically work in the following ways:

Advise - Practitioners give advice on a wide range of people issues at work – from careers to large scale organisational change.  They are also independent professionals who can be trusted to offer an unbiased, scientifically credible perspective.

Diagnose – Practitioners help organisations to better understand issues and challenges (e.g. high turnover and low engagement). They use social scientific research methods to investigate human behaviour at work.

Design – Practitioners design solutions to organisational challenges. For example, they might design a psychometric tool to help an organisation select better employees or an assessment exercise.

Deliver – Practitioners often implement solutions to organisational problems for clients. Their role is usually to facilitate a solution and not to take ownership of the problem for the client.

Evaluate ­– Practitioners measure the effectiveness of interventions. Demonstrating evidence of individual and organisational benefits is a core principle of Business Psychology.

Areas of Business Psychology

Business Psychology can be applied to almost any people issue at work. Nonetheless, there are several well established domains of Business Psychology. These include:

  • Selection and Assessment
  • Organisational development
  • Coaching
  • Leadership development
  • Learning and development
  • Talent management
  • Employee engagement
  • Safe and user-friendly work environments
  • Performance management and appraisal
  • Culture
  • Health and well-being at work
  • Psychometric testing