Industrial psychology is a relatively recent subfield of psychology. In fact it did not become fully productive until about the late 1920's. The industrial side of industrial psychology has its historical origins in research on individual differences, assessment, and the prediction of performance. This branch of the field crystallized during World War I, in response to the need to rapidly assign new troops to duty stations. After the War the growing industrial base in the U.S. added impetus to industrial psychology. Walter Dill Scott, who was elected President of the American Psychological Association (APA) in 1919, was arguably the most prominent I-O psychologist of his time, although James McKeen Cattell (elected APA President in 1895) and Hugo Münsterberg (1898) were influential in the early development of the field. Organizational psychology gained prominence after World War II, influenced by the Hawthorne studies and the work of researchers such as Kurt Lewin and Muzafer Sherif.
Before the late 1920's many people had started to improve the workplace. Differential psychology, which became popular during World War I, was the start of improving the workplace. It focused in on how people are different but was not very successful in helping with ones job. The second idea was experimental psychology. This branch attempted to treat everyone as the same and tried to define laws in how people are similar. It too failed. The third idea was scientific management. This was the idea that there is only "one best way" to perform a job. It was based on the fact that money is a motivator and left out the idea of job satisfaction. The last factor that helped industrial psychology become prominent was the human relations movement. This particular movement wanted to keep people happy through motivation along with job satisfaction. It also led to the Hawthorne Studies, which was the true start of industrial psychology.
The Hawthorne