Psychologists who work for businesses are known as industrial-organizational psychologists. They are frequently found in personnel departments and are involved in employee selection and training. Interviews play an important role in the evaluation of job applicants and in the assessment of current employees for possible promotion. Industrial-organizational psychologists have helped to educate managers about the nature and limitations of interviews. Intelligence tests frequently are used in the assessment and selection process. Tests that measure specific skills and abilities are also frequently used. Performance tests, which measure actual manual performance, are used to predict behavior on the job.

Techniques that are used to assess the performance of current employees include job performance ratings and checklists. Assessment centers are frequently used to evaluate applicants for management positions. Research has indicated that intellectual ability tests are the most valid method of evaluating applicants for complex jobs, but performance tests are more valid when the job is less complex. Psychologists have studied systematic gender biases in employee selection; such prejudice tends to exclude women from the most powerful occupational roles. Ethnic biases have likewise excluded members of minority groups from positions of power.

Psychologists have helped improve employee satisfaction, happiness, and productivity by improving supervisory style, managerial organization, and physical conditions. Techniques such as participative management and management by objectives have been promoted by industrial-organizational psychologists, as well as methods to reduce social loafing. Human factors engineering is a branch of industrial-organizational psychology whose goal is the design of more user-friendly machines and controls. Health psychologists have also worked with businesses to improve the health-related aspects of the work environment. Other psychologists have worked to improve the efficiency of training techniques, including the use of computer simulation.

In recent years, environmental psychologists have become involved in the effort to create environments where people can live and work more happily, healthfully, and productively. For example, environmental psychologists have helped design workspaces, and have helped evaluate alternative designs of college dormitories.

Environmental psychologists are working to change human behavior in order to solve environmental problems. Three areas of particular concern involve overpopulation, resource depletion, and pollution. Behavioral, cognitive, and humanistic approaches have been applied by environmental psychologists to increase pro-environmental awareness and behavior.

In recent years, psychologists have also begun to apply their methods to the practice of law in the courtroom. They have found that the characteristics of defendants and plaintiffs affect the likelihood of conviction and the harshness of the sentence. They have also found that certain types of jury members are more likely to vote for conviction and to recommend harsher sentences than other types. Psychological factors are involved in the effectiveness of courtroom evidence. Eyewitness testimony is the most convincing evidence, but eyewitnesses can and do make mistakes. Research has also determined that the order in which testimony is presented can make a difference in the outcome of a trial.

Psychologists serve the field of education in three ways: as professors who help train teachers, as consultants on testing programs, and as school psychologists employed by school systems. Mastery learning is an approach based on Benjamin Bloom's belief that children should progress from one learning task to the next only when they have fully mastered the previous one. Project Follow Through is a federally funded experiment to test new ways of educating economically disadvantaged children. An approach to testing called criterion-referenced testing is designed to determine if a child can meet the minimum criteria for a specific educational objective. Public Law 94-142, the mainstreaming law, established that every child has a right to public education, regardless of his or her disability. Its successor is called the Individuals with Disabilities Education Act.