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Psychological safety may just be the most important principle of work culture success.

But how does the concept of psychological safety fit into building a positive work culture? What is psychological safety, and how can you create it within your organisation?

Let’s start from the top.

What is psychological safety?
The current state of psychological safety in Australia
The importance of psychological safety at work
How to create psychological safety
1. Listen to employees
2. Make space for constructive criticism
3. Encourage work-life balance
4. Invest in employees’ growth
5. Allow ambiguity
6. Lead with honesty and vulnerability
What is psychological safety?

Psychological safety is a state of calm support and acceptance, encompassing both a personal feeling and an environmental condition.Psychological safety is a state of calm support and acceptance. It's both a state of mind (or feeling) and an environment, one that people can collaborate to create. For the purposes of discussing psychological safety at work, we are mainly concerned with how to create a communal sense of psychological safety among employees within an organisation.

The concept of psychological safety reminds us that there are many ways to create a safe (or unsafe) work environment, and only some of them involve labor conditions, hazards, and other typical safety concerns.

A psychologically safe environment is one in which employees feel included, supported, respected and heard. Their legal rights, as well as their individuality, preferences, and feelings are prioritised. All employees, even those without much power in the organisation, feel able to voice their concerns and opinions. Employees can propose new ideas while trusting that minor failures and bad ideas aren’t persecuted.

A psychologically unsafe environment can take many forms, but generally, it is a work environment in which employees feel ill at ease, taken advantage of, bullied, harassed or unfairly treated. There may be prejudice, intimidation, threats, physical violence or negligence. In these workplaces, employees are pressured to stay quiet about their concerns. Employers may use the threat of cutting hours or firing to silence employees.

Safe Work Australia identifies a range of psychosocial hazards (anything that could cause psychological harm and negatively impact someone’s mental health), which include:

  • Job demands
  • Low job control
  • Poor support
  • Lack of role clarity
  • Poor organisational change management
  • Inadequate reward and recognition
  • Poor organisational justice
  • Traumatic events or material
  • Remote or isolated work
  • Poor physical environment
  • Violence and aggression
  • Bullying
  • Harassment, including sexual and gender-based harassment
  • Conflict or poor workplace relationships and interactions

The current state of psychological safety in Australia

In our 2024 research survey, we asked a range of questions to gauge the current level of psychological safety amongst Australian workers.

We found that 52% of employees say that they’re not afraid to take risks and commit mistakes because their company doesn't have a blame culture, however this sinks to 45% for graduates, 26% for frontline workers and 21% for manual unskilled workers.

We also found that 61% say their company supports employees in voicing their views and opinions through proper feedback channels, while 53% of Gen Z employees (the lowest across the generations), 49% of deskless workers and 43% of frontline workers say the same.

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When it comes to workplace relationships, around one in two (53%) say they feel comfortable sharing their personal struggles and feelings with their manager, though slightly less (49%) feel comfortable sharing with their colleagues. Again, we see lower percentages for deskless and frontline workers.

A promising 69% agree that they feel safe to disclose their sexuality, religion or identity in the workplace without repercussions or being treated differently, while 19% neither agree or disagree and 12% don’t feel safe to do so. While 77% of executive and C-suite employees feel safe to disclose, only 55% of graduates say the same.

When it comes to inadequate recognition, two thirds agree that their wellbeing would improve if they received more recognition, with the following groups seeing higher percentages: Baby Boomers (65%); those in administration (65%), accounting (66%), transport (73%) and the executive level/C-suite (77%); and deskless workers (65%) and frontline workers (71%). It’s interesting to see the highest percentage for those in the C-suite, suggesting that many may feel that recognition only flows top down, rather than from the bottom up. 

We also asked whether employees feel safe going to HR whenever they have issues with their manager or colleagues and 43% say they do. Only 36% of Baby Boomers and 38% of Gen X agree, compared to 47% of Gen Z and 51% of Early Millennials. Lower percentages were also seen in supply chain/logistics (24%), education (33%), healthcare and aged care (35%), graduates (36%), deskless workers (38%) and frontline workers (23%). 

These findings suggest that certain industries and workforces may be more susceptible to psychosocial hazards, negatively impacting mental wellbeing and employee productivity.

Discover the key drivers of productivity, engagement and retention for  Australian employees. Read Report

The importance of psychological safety at work

Psychological safety at work carries both moral and legal importance for both employee and organizational success.There are many reasons to prioritise psychological safety at work. Even if you're sure your organisation is a safe environment for employees, it's worth considering whether that safety extends to everyone. Do employees of colour experience micro-aggressions that discourage them from sharing authentic feedback?

If psychological safety is only available to employees of a certain racial group, gender, or level of managerial power, it isn’t genuine psychological safety.

In general, people with power feel psychologically safe, because they are able to assert their needs, protect their own interests, and stand up for themselves. Our research above clearly shows this, demonstrating stark differences between results when comparing senior employees to junior workers and graduates.

Here are a few specific reasons psychological safety is important in the workplace:

It's the law. Many behaviours that create an unsafe environment (sexual harassment, racial discrimination, intimidation, physical violence, etc) are prohibited by law. Allowing an unsafe environment leaves your organisation vulnerable to legal liability.

It’s the right thing to do. How would you feel if you knew that employees within your organisation felt unsafe, taken advantage of or disrespected? How would you feel if you were asked to take their place, at the mercy of those in power and worried about keeping your job? No one deserves this kind of treatment at work.

Psychological safety prevents employee turnover. Employee turnover is expensive, but worse, it can cause chaos and dysfunction in the workplace. Dysfunctional workplaces tend to create a positive feedback loop; employees leave because the workplace is toxic, and their absence creates chaos, which causes still more employees to leave. You can safeguard against this compounding employee turnover by building a safe and supportive work environment.

Safe environments foster creativity and collaboration. Creativity and innovation require a great deal of energy and commitment to a project. Employees may find themselves unable or unwilling to spare this energy to go the extra mile at work if they feel their ideas are dismissed. A psychologically safe workplace encourages innovation by making it safe to propose new ideas, receive constructive criticism and take creative risks. Businesses that prioritise these fundamentals see the results in employees’ creativity and productivity!

How to create psychological safety at work

It's important to employee wellbeing for employees to feel heard at work. Ensure employees have opportunities to provide feedback and comments.1. Listen to employees

Employees want to feel heard at work. Knowing that your feedback and insights aren’t valued by your managers can drain your motivation for work and destroy your desire to go the extra mile. When companies allow these workplaces to continue, they miss out on salient employee insights, as well as the creativity employees display when they are supported and heard.

Be proactive in creating opportunities for employees to share ideas and feedback. Whether it’s implementing regular anonymous polling, maintaining an open-door policy with leadership, or actively soliciting feedback, you’ll see results in employee engagement and satisfaction. A psychologically safe workplace is one in which employees trust their employers to listen to them, even if the two don’t always agree.

2. Make space for constructive criticism

It can be difficult to recognise our own weaknesses and hold ourselves accountable for our work performance. In a supportive workplace, constructive criticism from colleagues and managers can fill this role, guiding our professional growth and encouraging us to become better, more well-rounded employees. Constructive criticism is a necessity for anyone who is committed to being the best they can be, and when properly applied, it can help to foster a workplace that values creativity, collaboration and excellence. So it’s a shame that many employers drop the ball on this task.

In order to bring out the best in employees, constructive criticism has to be just that: constructive.

That means feedback is shared with a kind tone, mutual respect and the best interests of the individual and the team in mind. In a hyper-competitive environment, employees may use invitations for criticism as a sort of open season for attacks against coworkers, who they see as competition. This type of criticism is unhelpful and counterproductive to creating a psychologically safe environment, which requires a sense of mutuality, respect and helpfulness to thrive. Rather than encouraging criticism for its own sake, empower employees to participate in shaping and improving each other’s ideas.

3. Encourage work-life balance

Work-life balance is critical for any employee. Ensure employees are able to establish and maintain vital boundaries for their time.Ironically, much of the work that goes into creating a healthy, safe work environment happens not at work, but at home after hours. How a person spends their free days affects their attitude, energy and motivation at work. And while you can’t decide how employees choose to unwind after work or spend their free time, you can encourage them to seek a healthy balance between work duties and their personal life. 

Allow working parents to shift their working hours earlier in order to pick their children up from school or daycare. Stress the importance of actually using sick days when you’re ill. Don’t penalise employees for taking time away from work emails in the evenings and on weekends.

Encouraging a healthy work-life balance shows that you respect employees as complex people, rather than only for their economic output. Respect is one of the key principles of a psychologically safe workplace.

4. Invest in employees’ growth

We previously mentioned that one of the top reasons employees decide to leave their jobs is feeling disrespected at work. But did you know that one of the other most common reasons employees leave is a lack of growth opportunities? Employees care deeply about opportunities for advancement and self-development within the workplace. Investing in employees’ growth is a great opportunity to build a respectful, safe work environment while also improving employee retention, boosting morale and growing employees’ professional abilities.

How does investing in employees relate to psychological safety at work? Investing in employees’ growth – whether in the form of competitive pay, educational opportunities or leadership training – shows that you value their individual contribution to the team. Employees can feel confident in the value of their perspective, which empowers them to speak up, share ideas and participate freely. With employees who are more self-assured, better educated and fully engaged, companies will see their teams thrive.

5. Allow ambiguity

Try as we might, we can't predict everything perfectly, and sometimes things go awry. Be honest and allow room for uncertainty in projects.Clear-cut assertions without ambiguity are convenient for decision-making within a traditional corporate hierarchy. “No, our project will not be over-budget.” “Yes, this candidate is the perfect fit for our team.” But as any professional knows, the truth is rarely so black-and-white. When a workplace expresses hostility toward ambiguity, employees feel they can’t speak up, for fear they might make a small mistake and be persecuted for it. Why volunteer your opinion during a meeting, when you know that if you’re wrong, your boss may yell at you or shame you in front of colleagues? 

It’s critical that employers committed to psychological safety in the workplace allow ambiguity, rather than forcing silence or false confidence from employees.

Employees should feel safe to say “I don’t know” without fearing repercussions.

Allowing room for the unknown lets employees express their genuine opinions, which in the end leads to a more accurate decision-making process.

6. Lead with honesty and vulnerability

Leaders set the tone in any workplace. Their behaviour sets the example for what will be tolerated, encouraged or condemned. It’s a lot of responsibility, but this also presents a unique opportunity to make a real difference in the workplace.

Lead your employees with honesty, respect and vulnerability to build a culture of psychological safety. Show them it’s okay to establish boundaries by creating your own work-life balance. Show you can tolerate ambiguity by not demanding a clear-cut answer and saying things like, “it’s okay if you aren’t 100% sure.” Make it clear that bullying and harassment won’t be tolerated, and that supportive, creative, helpful behaviour will be rewarded. You have the power to change your workplace for good!

Which of these techniques will you implement in your workplace to build a culture of respect and safety?


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Kaitlin Howes

Kaitlin Howes is an HR Business Partner at Reward Gateway. Kaitlin loves the dynamic nature of her job and that she gets to wear many hats, but is especially happy when creating a welcoming, fun and supportive experience for RGers. When she isn’t wearing her RG hat, you can find her repelling her sticky-fingered toddler from grabbing her laptop or chasing sunshine that provides the perfect setting for a picnic.

HR Business Partner

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