Psychologically Safe Environment Prompts Better Production

There’s a term being talked about more and more among business leaders, a cultural phenomenon known as “psychological safety,” a business climate experts are saying is becoming more and more important.

Cultivating such a work environment – where employees feel comfortable asking for help, sharing suggestions informally or challenging the status quo without fear of negative social consequences – makes organization more likely to innovate quickly, unlock the benefits of diversity, and adapt well to change.

Those are all capabilities that have only grown in importance since the Covid pandemic, said Holly Segur, a North Carolina-based strategist, coach and accountability partner COVID-19 crisis.

Segur, who earned a bachelor’s degree in business administration, management and operations from SUNY Empire State College, talked about the importance of psychological safety in a webinar, “Five things leadership needs to know about psychological safety in the workplace.”

The webinar was presented by the National Association for Business Resources in partnership with the Best and Brightest Programs, Corp! Magazine and MichBusiness.

According to Segur, psychological safety is not really a new term.

“Contrary to what a lot of folks in my generation believe, it was not coined by the Gen Zs who are coming into the workplace now,” Segur said. “It was coined by organizational development and corporate psychologists back in the 1990s. Technically, is psychological safety allows employees to be themselves and fully engage in the workplace without fear of negative consequences to self image, status or career.

“It’s an environment that allows employees to show up as themselves,” she added. “But it’s also, more importantly, the belief and the mindset that an employee won’t be punished or humiliated for speaking up on ideas, having questions or concerns, challenging the status quo or challenging changes in the workplace, that they can show up authentically as themselves and they’re not going to be punished, humiliated or feel any negative peer pressure associated with being themselves in the workplace.”

Psychological safety is easier to understand and engage in for leaders of organizations with fully engaged and physically present employees. In traditional workplaces, Segur said, everyone shows up to the office, and other employees can see them and talk with them and engage with them.

But in this new environment post-Covid, where so many are working flexibly or remotely, it changes the conversation significantly and makes it even more important that senior leaders … “truly understand” how to ensure employees are feeling psychologically safe.

A McKinsey Global Survey conducted during the pandemic confirms that only a handful of business leaders often demonstrate the positive behaviors that can instill this climate, termed psychological safety in their workforce.

But statistics demonstrate why having such a culture could be important. According to Segur:


  • Psychological safety is one of the three most important variables and attributes employees feel they need in the workplace, behind consistent pay raises and ahead of having flexibility in their schedule.

“This is of utmost important to employees of all generations (but) it’s especially important to Gen Zers,” Segur said. “They’re going to be challenging all of the norms of how we do business. They’re going to be wanting very different things.”

  • A Conference Board study in 2023 showed that, by 2025, Gen Zers are going to make up nearly a third of the workforce.

“This is a generation that absolutely demands psychological safety,” Segur said. “They can’t put on a fake face, they don’t want to hide, they want to be able to express themselves freely without having to be concerned their personal safety or career safety is at stake.”

  • A meQuillibrium study from 2022 shows that 60% of the people experiencing low resilience (“These are the people who don’t like change or who are steadfast and just want to come in and do their job day in and day out and … can’t take a lot of change or take a risk”) express burnout, and 34% of those are considering quitting their jobs. On the other hand, only 5% of high-resilience employees experience burnout, and only 3% of those are thinking about quitting.

Segur points out that a psychologically safe environment breeds employee well-being. Workers, she said, come in feeling engaged and comfortable because they know they’re being accepted for who they are.

They may be diverse in their thinking, they may be diverse in their experiences, they may be diverse in their history within your company. It could be someone who’s been there 20 or 30 years, and it could be someone who’s only been there 20 months.

“They’re feeling comfortable being able to engage with each other and be themselves,” Segur said. “When you have that you have an outstanding opportunity for healthy and engaged employees, which always leads to greater productivity and greater performance. When people are happy they perform better. We all know this.”

Statistics seem to bear that out. Segur gathered information collected over the last two years by Gallup and by Accenture. It shows, she said, that companies with a solid psychological safety component have:

  • 27% reduction in turnover in organizations where the employees classify themselves as psychologically safe.
  • 50% more productivity from those employees because they feel safe and engaged.
  • 76% increased engagement. “I show up, I’m here, I want to be part of this team because I feel valued and accepted here,” Segur said.

“These are hard-to-ignore percentages about why this particular topic is so important right now,” she added.

Segur pointed out there are several stages of psychological safety, including:

  • Inclusion safety — Does the workplace allow workers to be their authentic self.
  • Learner safety — Can employees grow?
  • Contributor safety — Can the employee create value?
  • Challenger safety — Can employees be candid about changes?

Segur said there are several steps leaders can take to ensure a psychologically safe environment for their workers. For instance:

  • Admit your fallability and normalize vulnerability.
  • Actively invite input. Ask people what they are thinking.
  • Respond positively. Adopt a learning mindset.
  • Invest in leadership training. Don’t assume leadership is intuitive.
  • Prioritize transparency. Explain the purpose behind change and let people openly respond.

The leadership component is especially important, according to Segur.

“When companies have a psychologically safe environment it’s because from the top down everyone who leads humans knows they have to promote this kind of work environment. We then up our game as leaders because we become more dynamic and engaged to our employees, and we build strong bonds in connection with them,” she said. “It really does help with performance and organizational culture. All of these factors improve when employees feel comfortable enough to be themselves.”