The psychologist is an expert in prisoner psychology and behaviour. He is an essential administrator as he reveals the needs of all your prisoners and staff members, given that staff needs has been enabled.
This is a necessity as this information can potentially help to prevent violent outbreaks, riots or in the case of staff members: a strike. These consequences are all a possibility if needs are not being met.
Like all administrative staff, the psychologist needs an office. You can also hire more than one psychologist, so long as each one has their own office.
Reform Program(s) Edit
A psychologist is able to teach two different Reform Programs: Behavioral Therapy and Alcoholics Group Therapy. As aforementioned, you can hire multiple psychologists in order to schedule extra sessions of these programs.
Behavioral therapy serves to quell some of your prison's most violent inhabitants. Alcoholics Group therapy sessions serves to treat prisoners with alcohol addictions. It will never completely remove the addiction, but will definitely satiate it.