Bryan & Harter (1897) published a first paper describing the study and application of psychology to work activities (Morse code telegraphic) coined the term “industrial psychology” by mistake. During the First and Second World War when various industrial organizations and plants faced a number of problems related to production, efficiency and individual employees, the help of industrial psychologist are in great demand. At this stage, industrial psychology received a special status, although it began in America in 1901, and England soon after. 

Industrial psychology may have gotten its start on December, 20, 1901, that was the evening that Dr. Walter Dill Scott, a psychologist at Northwestern University gave an address discussing the potential application of psychological principles to the field of advertising. 

The first book, “The Psychology of Industrial Efficiency”, written by Hugo Munsterberg in 1913 was dealing with various problems faced by the industries and analysis of such problem from the psychological point of view. During the war years, the Fatigue Research Board was organized in Great Britain to discover the problems connected with working hours, condition of work, problems associated with fatigue and monotony/boredom, accident and safety measures and other work related matters.

In 1917, Journal of applied psychology made its appearance and at the same time it introduced as a subject of applied psychology. 

In 1925, social psychology of industry entered into the arena of industrial psychology therefore, interpersonal and intrapersonal relationships, theories of motivations, importance of communication and other associated areas were investigated.

The classical studies, started in 1927 by the famous Hawthorne group, contributed to the development of industrial psychology in a major way. Their finding ultimately changed the trends and approach of industrial psychology from economic to social, from the work-oriented attitude to a workers-oriented attitude.

During the Second World War, the applied psychology research unit of the Medical Research Council of Great Britain carried out several researches and investigations to solve many industrial and organizational problems. Without much question World War II was a major factor in growth of psychology in industry. Although the American Association of Applied Psychology was formed in 1937 as the official organization of industrial psychology (it later became Division 14 of the APA), it was the huge psychological contribution to the war efforts which proved to so many people that applied psychology has important and practical contributions to offer.

As in World War I, great emphasis was placed upon the development of tests for selecting and classifying recruits. Also developed were selection programs for officers, various training programs of specialized types and job analysis and performance evaluation techniques.

Human factor society, it was associated with the American group of applied psychology with interest in human engineering problem. Ergonomics society, it was British counterpart of human factor. Society occupational psychology and ergonomics are two journals. Considerable attention was focused on various human relations and social problems of industry during the later part of 1940’s and in the 1950’s.

Problems related to supervision, group dynamics, leadership, employees’ interaction with others, employees attitude, morale, job satisfaction, communication process and others. In the beginning of the 1960’s organizational psychology began to enter the area of industrial psychology and as such, special emphasis was given to the organizational inputs in the industrial situation.

The psychologist who has made valuable contributions to the development of industrial psychology was Walter Dill Scott. The industrial psychology division of American Psychological Association was established in 1945 and gave professional recognition to industrial psychology. Though industrial psychology was a neglected branch of applied psychology in India, after the Second World War and particularly after Independence, it got special recognition from Indian psychologists. With the establishment of various universities, center and institutes in India, research in industrial psychology has been accelerated after 1950’s.

In 1970’s, the division of industrial psychology was renamed as the division of industrial and organizational psychology. An eminent industrial and organizational psychologist of India Professor Durganand Sinha (1971) has made a valuable survey of the important topics of research in industrial psychology in India.