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HRM vs. Business Psychology


Human Resource (HR) managers and industrial-organizational or business psychologists both deal with team members in the workplace. In some cases like hiring recommendations and involvement in pre-employment testing, the roles of these professionals may overlap. While in other cases, their responsibilities may differ. Both the fields require certain educational qualification, personal skills as well as shared work environments. However, the level of degree, career prospects, salary expectations, etc. differ.

Let us get started with the basics first!

What is Human Resource Management (HRM) and What Does an HR Manager Do?

An HR manager is an important member of the management team. This team typically plans, directs, and coordinates the various management functions of an organization. These professionals provide their organization with oversight for the functions like short-listing, recruiting, interviewing, and hiring new staff and handling staff-related issues such as disciplinary procedures, disputes, employee terminations, and so on.

They act as an expert on organization-related legal issues like sexual harassment, equal employment opportunities, and the relationship between employees and senior executives. These professionals also handle timekeeping, payroll, and other employee benefits and compensations, and related tasks.

What is Business Psychology and What Does a Business Psychologists Do?

A business psychologist applies various psychology principles to the workplace. Since this area of study is all about the human psyche and mental processes, a professional business psychologist uses different skills to examine workplace productivity, employee screening, morale, and organizational development.

These professionals may work with a firm by conducting pre-employment testing, executive coaching, team-building activities, or conducting culture and climate surveys. They may also provide HR managers of their organization with scientific research for the decision-making process or strategy development.

HRM and Business Psychology: Similarities

The main focus of a business psychologist is to help the organization improve its performance by helping them shortlist, recruit, hire, and retain the right professionals, improve the skills of the existing employees and improve teamwork and morale. On the other hand, the HR managers are also concerned with the recruitment, hiring, and retention processes.

Both areas require strong communication and interpersonal skills. For them, their ability to function as a member of the management team will play an important role.

HRM and Business Psychology: Differences

One of the most dramatic differences between these two occupations is – salaries. According to the US Bureau of Labor Statistics, in 2017, the median salary of business psychologists was $102,530, while HR managers were getting $123,510 per annum on an average.

A bachelor’s degree is generally the minimal qualification for HR managers, while business psychologists must hold a master’s degree. HR managers are an important part of the management team of an organization. Some HR managers also specialize in payroll, recruitment, labor relations, and so on. On the other hand, business psychologists may act as a consultant or work as an employee.

These two career choices also have slightly different prospects as well. According to the reports of the US Bureau of Labor Statistics, the projected job growth in HRM is around 9% and 8% for business psychologists between 2016 and 2026.

Making Your Final Choice

These two career choices have so many similarities that the final selection is just a matter of individual preferences and goals. Anyone who chooses to work independently may prefer the business psychologist consulting job, while an individual willing to work in a team within organizational settings may become an HR manager. A business psychologist is more likely to be involved or conduct research related to the workplace and employees. Since you need a master’s degree to become a business psychologist, its educational process will take more time than the HRM.

Both of these options will give you a great opportunity to help people at the workplace and make a significant difference in how organizations run. But it can be quite difficult to choose one option between them. If you are also confused and do not know where to start from and which path is right for you, get in touch with AEC on +91-8448446609 or 011-43334444 or share your queries at to get assistance for your career. You can also directly come to our office by booking your FREE counseling session.

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