Personnel psychology is a subfield of industrial and organizational psychology. Personnel psychology is the area of industrial/organizational psychology that primarily deals with the recruitment, selection and evaluation of personnel, and with other job aspects such as morale, job satisfaction, and relationships between managers and workers in the workplace. It is the field of study that concentrates on the selection and evaluation of employees; this area of psychology deals with job analysis and defines and measures job performance, performance appraisal, employment testing, employment interviews, personnel selection and employee training, and human factors and ergonomics.
By the end of the nineteenth century, industrial, or personnel psychology, was developed as a way to understand work behavior. One influential figure in the beginning of this new area was Hugo Munsterberg, a German psychologist who was trained by Wilhelm Wundt and who also worked with William James. Munsterberg studied selection and fit in the workplace, and he proposed experimental methods as solutions to business problems in his text, Psychology and Industrial Efficiency (1913). He also served on the faculty at Harvard, and in his writings, talked about such topics as fit in a career, from both an employer's and employee's perspective. Walter Dill Scott, also trained by Wundt and a professor at Northwestern University, is credited with the foundation of I/O psychology, as he used such psychology in advertising and in founding the first personnel consulting firm.
The time around WW I brought about significant contributions to the field of industrial psychology. Robert Yerkes, along with Walter Van Dyke Bingham and Scott, headed the selection and placement of army personnel with their Army Alpha and Army Beta tests. These test helped to bring attention to testing as a form of selection and their uses in practical applications. This was the beginning of industrial psychology in the real world as opposed to the world of academia.