ASSIGNMENT NO # 3

Submitted To: Mam Safoora

Roll No: 21020920-211

Topic: Role of psychology in business administration

Submitted By: Talha sardar

Course Title: Psychology

Course Code: PSY-101

Program: BBA

Semester: 1ST

DEPARTMENT OF BUSINESS ADMINISTRATION

 ➢ Role of psychology in business administration

❖ Role of psychology in business administration:

Psychology is critical to the workplace. It helps managers at all levels of organizations
select, support, motivate and train employees. It also helps businesses design products,
build better workspaces and foster healthy behavior. Business psychology combines
advanced business practices with the study of human behavior to improve the
productivity, efficiency and culture of workplaces. Business success relies on positive
human interactions, strong relationships and understanding individual motivations.
Through their scientific research, psychologists are discovering new ways to increase
productivity, identify training and development needs, and implement policies proven to
attract and retain the best employees. By studying how people interact with technology
and equipment, psychologists can help make these tools more userfriendly and prevent
errors, whether we are using everyday products or life-critical technologies.

1. Psychology Can Aid During Recruitment:

One of the most difficult tasks for a business to undergo is recruiting new employees.
Doing so can be rewarding and exciting, but the risk of choosing someone less than
suitable for the job always hangs in the background. Individuals who are trained in the
art and science of business psychology have been taught to see people in a deeper way
than the average human being. They can spot character flaws with ease and are able to
catch any red flags that a recruited might overlook.
Aside from being able to spot negatives more easily, those trained in psychology can
help spot unique characteristics and learning styles in applicants that would otherwise
not be considered. Knowing more about people and how they function can help a
business hire someone who is truly suited for their company.

2. Likewise, Psychology Can Help In a Downsizing Situation:

Downsizing is a difficult thing that many businesses have to do, after months or years of
trying to avoid it. Feelings will be hurt, and having a skilled psychologist working at the
company in human resources can help ease the blow for workers who are let go. Having
someone there to counsel them and walk them through this difficult time in their lives
can make all the difference when it comes to not burning bridges with potential future
 employees. By letting go of people in a healthy way, the damage will be minimized on
both sides. Negative feedback from those laid off or fired will be lessened and the
chances of legal action being taken against the business are greatly lessened.

3. Psychology Will Help a Business Grow and Thrive:

Investing in a business can help strengthen the company in more ways than one. By
hiring some of the best talent, people who have investing years of their time to learn
and hone their craft or studies, a business is showing the public that they are willing to
do what it takes to make their business thrive. Investing in the future is a great way to
prove yourself as a business, and in turn, talent will show up on your doorstep. When
people know that a business is willing to spend the extra money, the best of the best are
drawn to that company. Plus, having these individuals, like trained psychology
graduates, in a business gives the company a strategic edge over others that haven’t
chosen to go down the same path.
In addition, a trained graduate in psychology in business will have an eye for the future.
A typical businessman or woman isn’t always on track when it comes to looking past the
here and now. A psychology graduate will help keep the culture of a workplace from
reaching levels of hostility and will work their hardest to make decisions that will benefit
not only the present span of time but the upcoming years as well.
4. Trained Psychologists Can Help Lessen Stress and Fear:

Businesses can be a place of stress, for everyone. The owners of a business, the managers
and lower-level employees all feel the strain when it comes to working in the business
world. It isn’t uncommon to feel afraid of losing a job or having one’s hours cuts, and a
trained psychologist in your human resources department can help to lessen these feelings
of fear and trepidation. Additionally, many people can become stressed and overworked
when hours are raised. This can be done to meet increasing demands, because not enough
employees are recruited or just before a large project deadline arrives. Psychology
graduates are trained to deal with this phenomenon that is often called a pain spot,
something that hits workers hard and creates a less than ideal work environment. By having
psychology in business on your side, these feelings of stress and fear can be lessened so
that workers remain stable and efficient. Psychology graduates can do many things for a
business, as you have been shown. From easing the fears of employees to keeping a
business prepared for the future, a graduate in psychology is a useful person to have on
hand. It doesn’t matter what type of business you run, hiring someone with a lot of
knowledge in this versatile field will benefit you in more ways than you ever could have
imagined, if you just give them a try. Dealing with the financial matters of an organization,
which is apparently solely related to numbers and quantities, also involves psychology. The
assessment of costs and thinking of ways to reduce them, thinking of supplementing labour
with machines, comparing different period’s costs and analyzing the market situations and
rise and fall in the stocks, understanding the behaviour of investors, competitors and other
stock holders, all involve psychology as a phenomenon.