Psychological Safety Is A Fundamental Management Concept

Psychological safety gives senior leaders new, actionable insights into staff productivity that significantly improve their organization’s financial performance.

1. Summary

A fundamental management concept helps leaders achieve their organization’s strategic goals. Its insights are used to quantify and prioritize risks and opportunities. It leads to better utilization of key resources. It recommends actions that move an organization forward. In short, it supports strategic decision-making.

The concept of psychological safety evolved from a century of research into the human dynamics of workplace performance. It identifies the core biological driver of human behaviour. It understands that we operate in a social context: we yearn to belong; we fear social rejection; our actions reflect this.

Psychological safety is a key driver of employee behaviour. When measured appropriately, it correlates with an organization’s KPIs. This measurement integrates seamlessly with traditional management tools such as internal benchmarking where it helps managers identify and prioritize risks and opportunities.

Psychological safety provides new and deep insights into workplace performance. It is a fundamental management concept that helps to align staff and leaders in shared pursuit of the organization’s purpose and potential.

2. Psychological Safety Introduced

In the 20th century, management learned how to unlock much of the potential productivity of their employees by paying attention to training, equipment, procedures, remuneration and working conditions. Even so, productivity varied from day to day, from worker to worker, from team to team. These variances highlighted a significant productivity gap that management was unable to consistently close.

Good managers sensed that the gap was related to human dynamics. They believed that traditional tools – training and equipment and the like – dealt only with factors outside an employee. They felt that other factors inside the employee must also play a role.

Researchers developed a variety of approaches and tools to understand these inside factors. They looked at individual traits like behaviour, personality and cognition. They considered motivational factors such as engagement, culture, resilience and leadership. None provided a complete picture or delivered consistently effective results.

In 1999, the concept of psychological safety was rediscovered.

Psychological safety is a biologically-rooted survival sense that people feel when they’re in a group. It assesses what happens between people.

Psychological safety encourages or inhibits how comfortable a person feels to speak up and participate in a group. This feeling significantly impacts workplace productivity. Google released the results of an extensive study in 2016 in which they found that “psychological safety, more than anything else, was critical to making a team work.”(1)

Our client work builds on Google’s findings. Conductor is a software platform used by senior leaders to measure psychological safety in their organization and correlate it with their performance metrics. This practical application of psychological safety lets them directly address the productivity gap with actionable steps.

3. Psychological Safety Is Deeply Rooted

Psychological safety evolved as a survival mechanism half a million years ago. Homo sapiens was vulnerable to other animals that were larger, stronger and faster. Evolution observed that people in groups survived and people without a group didn’t.

Because survival depended on belonging to a group, the subconscious brain learned to continuously scan the social landscape. It evaluated five dimensions—status, certainty, autonomy, relatedness, and fairness(2)—to get a feel for the quality of the social connection.

A positive evaluation brought a greater sense of belonging; the brain relaxed and felt more comfortable communicating and collaborating with others. A negative evaluation signaled the risk of social exclusion and prompted fear. The brain triggered a fight/flight/freeze response exactly as if it were facing imminent physical danger. Communication and collaboration became impaired as the brain focused on individual survival.

4. Psychological Safety Is Alive and Well Today

Few of us face the environmental threats of half a million years ago. But our brains continue to ceaselessly scan the social horizon for threats. They continue to drive our emotions and, through them, our behaviour. For example, we actively avoid embarrassment and shame. Jealousy and unfairness frustrate or enrage us. We seek out situations where we can feel pride and loyalty.

We bring our brains to the workplace where we are placed in groups and asked to communicate, collaborate and create. Those of us who feel psychologically safe enthusiastically share the best of ourselves. Those of us who don’t feel safe hold back, fall silent, and share the least of ourselves. The productivity gap lives here, between safe and unsafe.

5. Psychological Safety Is NOT Employee Engagement

Employee engagement is the result of a century of work exploring the productivity gap. It examines the enthusiasm that employees have for their work. Practitioners believe that this enthusiasm can be stimulated and directed toward organizational goals.

Employee engagement is a satisfying idea that struggles. It is freighted with a variety of concepts but lacks consensus and standards. Academic theory conflicts with accepted management practice. Despite some studies that celebrate the link between engagement and financial performance, using engagement to achieve performance improvements in individual organizations is unreliable. 

The work on engagement, however, paved the way for psychological safety. While engagement measures employee enthusiasm, psychological safety measures the factors underlying this enthusiasm. Psychological safety, a lead indicator, predicts engagement, a lag indicator. Psychological safety is where employee engagement begins.

6. Psychological Safety Is Shared By Team Members

Psychological safety is experienced by an individual in a group. But it also spreads to other individuals in the group through emotional contagion.

Imagine a meeting. One of your colleagues offers a suggestion that receives a sarcastic reply. Your colleague feels embarrassed and is unlikely to offer further suggestions. You and the others in the room feel this embarrassment too, and you also become less likely to contribute voluntarily.

Imagine, though, that your colleague’s suggestion was met with encouragement. The emotional state—the psychological safety—of the room would be warmer, and you would be more likely to make suggestions of your own.

Psychological safety implicitly acknowledges interpersonal connectedness. It understands that the human experience is inextricably linked to social settings, for better or worse. This differs from other approaches to workplace performance that focus only on the individual.

7. Psychological Safety Is Measurable

Two surveys measure psychological safety. The first is a seven-statement survey developed by Dr. Amy Edmondson, a Harvard researcher. The second is a 25-statement survey called the PS25? designed in 2017 by Linda Ray and Karren Jensen at NeuroCapability.

Of the two, the PS25? is more comprehensive. In addition, the PS25? measures how an employee’s sense of psychological safety is influenced by their immediate supervisor.

The Conductor platform sends out the PS25? survey to participants who take an average of three minutes and forty seconds to complete it. Responses are scored between 0 and 100.

Conductor lets managers view psychological safety (the PS25? results) from a variety of perspectives. Results can be grouped by any combination of organization structure, functional area or demographic such as region, team, title or gender.

The PS25? is sensitive to small changes in psychological safety. It can be administered again after only three or four months to check progress.

8. Psychological Safety Varies Across An Organization

Organizations depend on standardization for efficiency and uniformity. This includes how people are selected, hired, trained and managed. But people are complex and the interplay between them multiplies this complexity. This is reflected in their psychological safety and is captured by the PS25?.

A national organization administered the PS25? across their sales division and received 750 responses. This Conductor chart(3) shows the participants’ psychological safety across the division:

The grey region shows the distribution of everyone’s overall psychological safety score (OA). Scores over 80 are good to excellent. These people are better able to communicate and collaborate. They feel well supported by the organization and each other. They are more resilient and more productive.

Scores between 60 and 80 indicate that real or perceived obstacles are impacting communication and collaboration. People feel less certain. They may lack clarity. They may have lower trust in each other, their supervisor, and the organization.

Scores below 60 are low and highlight areas of concern for the organization and its staff. People here feel unsupported and under threat. They are more resistant to change. Absenteeism and turnover is higher. Productivity and engagement are low.

The purple region shows the leadership influence score (LI), that is, how the immediate supervisor contributes to the individuals’ sense of psychological safety.

Prior to this survey management had expected consistency. They were surprised to see how much psychological safety varied across their organisation. They were heartened that so many staff felt psychologically safe but concerned by the number who felt unsafe.

9. Psychological Safety Varies From Team To Team

Because psychological safety varies from person to person in an organization, it is natural to expect it to vary from team to team. The chart below is from the same division. It shows each sales team as a vertical slice and each question’s response as a colour-coded square:

Each team has a distinct psychological safety personality with different strengths and weaknesses. This, despite consistent hiring, training and management practices across the organization.

10. Psychological Safety Is Influenced By Leadership

A team’s direct supervisor significantly impacts the psychological safety experienced by a team. Each of us knows this from our school days. The same group of kids could respond very differently from one hour to the next solely because of a change in teachers.

The purple line that overlays the grid above shows the Leadership Influence score for each team. Statistical analysis confirms the visual impression that Leadership Influence strongly correlates with team psychological safety.

11. Psychological Safety Correlates With Key Performance Indicators

People are responsible for organizational productivity. After all, if there are no people, there is no productivity.

It is straightforward to link items like training, equipment and working conditions with their effect on productivity. They are easy to see and measure.

It has been much more difficult to connect productivity with people’s inner workings which are less visible and less tangible.

One of the best known attempts at this is described in Gallup’s 2016 paper, “The Relationship Between Engagement at Work and Organizational Outcomes”. This meta-analysis of 339 studies across 230 organizations and 1.8 million people said that employee engagement correlates with nine business outcomes:

1. customer loyalty,
2. productivity,
3. profitability,
4. employee turnover,
5. employee safety incidents,
6. absenteeism,
7. shrinkage,
8. patient safety incidents, and
9. quality.

This paper points the way, but the approach it describes is daunting and impractical. Few organizations have the scale or expertise to undertake this process.

Psychological safety makes the process easier and more accessible.

Psychological safety as measured by the PS25? can correlate with key performance indicators (KPIs) within a single organization. For example, this Conductor chart(3) shows how each PS25? statement correlates with “sales conversion %” for the sales division introduced above:

In this organization, eight statements significantly correlate with sales conversion rate. This doesn’t mean that psychological safety causes higher conversion rates. It simply observes that teams with higher psychological safety were statistically more likely to have higher conversion rates.

Other organizations have seen strong correlations with absenteeism and customer return visits. In one organization, psychological safety measured by the PS25? predicted customer satisfaction.

12. Psychological Safety Provides Fresh Insights

KPIs are often used by themselves in uni-dimensional comparisons. For example, sales teams are ranked from “best” to “worst” based solely on their sales conversion rates. Comparisons like this provide little insight into potential solutions and no insight into the people involved.

Adding an appropriate second dimension deepens understanding, spurs new questions and invites further discussion into potential solutions.

The following Conductor chart(3) compares absenteeism rates in 15 teams with one aspect of psychological safety, “Work is allocated fairly in my team.”

As before, no causation is implied. A high negative correlation (r = -.517) simply points out that teams that feel work is allocated fairly are more likely to have lower absenteeism, and vice versa.

13. Psychological Safety Highlights Financial Opportunities

We increase the usefulness of the above chart when we quantify the financial impact of potential improvements. This is done by internally benchmarking an organization’s KPI data. In this case, it helps us answer the question, “How much could we potentially save by reducing absenteeism?”

The Conductor chart(3) above is the same as the previous chart with one difference: it shows the potential improvement in dollars by varying the size of each team’s bubble.

Managers can now see a potential issue and quantify it in financial terms. The correlation with psychological safety offers a potential solution, for example, “How could we remedy the feeling that work is allocated unfairly?” The size and position of the bubbles help with prioritization.

Here’s a similar Conductor chart(3) for our friends in the sales division. Internal benchmarking highlighted potential revenue improvements of millions of dollars per month:

The chart compares ‘sales conversion %’ with the Leadership Influence score which significantly correlate. Teams with managers who supported psychological safety were more likely to have higher sales conversion rates, and vice versa. The head of the division called this “a target rich environment.”

14. Psychological Safety Is Actionable

While it requires some skill, improving psychological safety is straightforward. Psychological safety is clearly defined in the literature and so can be well understood. Improving it relies on common sense fundamentals that resonate with most people.

The charts above help managers prioritize issues and opportunities. In addition, the statements in the PS25? survey use clear and simple language. They naturally lead to existing solutions like training and coaching, or they provide a clear business case for additional skill development.

The following Conductor report snippet(3) is an example of how the PS25? and KPIs can be brought together to help one team discuss how to improve its sales conversion rates and customer satisfaction:

At first blush, it’s not obvious how these two statements directly affect either KPI. Managers are used to working with things like sales skills and product knowledge that have an obvious connection to sales performance and customer satisfaction. However, with some reflection, the link between manager recognition, employee confidence and a customer purchase will emerge. Psychological safety’s impact on a KPI may not be as obvious as, say, product knowledge, but it is just as important.

Using reports like this, the sales division focused on improving specific areas of psychological safety in its teams. Within 120 days their sales conversion rate rose by 14.08% resulting in millions of dollars of additional revenue.

15. Psychological Safety Requires That Teams Be Held Accountable

The traditional approach of holding people accountable to KPIs without considering psychological safety leads to a performance gap. But focusing only on psychological safety doesn’t optimize performance either. Both are needed. Employees must be held accountable in a psychologically safe way.

The chart below illustrates this. Each quadrant has distinct attributes. Quadrant II holds teams accountable with less concern for their people. Performance may be acceptable but teams may experience additional overhead from stress, absenteeism and turnover. In quadrant IV, people feel very psychologically safe but may be allowed to underperform. Quadrant I brings accountability together with psychological safety to create stable, high-performing teams.

16. Psychological Safety Is A Fundamental Management Concept

A fundamental management concept helps leaders achieve their organization’s strategic goals. Its insights are used to quantify and prioritize risks and opportunities. It leads to better utilization of key resources. It recommends actions that move an organisation forward. In short, it supports strategic decision-making.

The concept of psychological safety evolved from a century of research into the human dynamics of workplace performance. It identifies the core biological driver of human behaviour. It understands that we operate in a social context. We yearn to belong; we fear social rejection; our actions reflect this.

Psychological safety is a key driver of employee behaviour. As measured by the PS25?, it correlates with an organization’s KPIs. Conductor integrates psychological safety levels seamlessly with traditional management tools such as internal benchmarking where it helps managers identify and prioritize risks and opportunities.

Finally, psychological safety shows how to reduce the conflict between people and bottom-line performance. Labor is no longer a necessary expense to be minimized. Rather, it is a rich resource that, when appropriately managed, aligns staff and leaders in shared pursuit of the organization’s purpose and potential.

About Alex Glassey

Alex Glassey is co-founder and Chief Innovation Officer of Conductor Software. He helps senior management integrate their people and productivity strategies. He is based in Victoria, Canada. Alex can be reached at +1.250.589.3230, [email protected] and linkedin.com/in/alexglassey.

About Conductor

ConductorSoftware.com is a self-serve SaaS platform that brings psychological safety and bottom-line performance together. Managers use Conductor to measure psychological safety, perform internal benchmarking using their own KPIs, and link them so the best possible decisions can be made.

Endnotes and Further Reading

(1) What Google Learned From Its Quest To Build The Perfect Team, Duhigg, Charles, New York Times Magazine, Feb 28, 2016

(2) Managing With the Brain in Mind, Rock, David, strategy + business, Aug 27, 2009

(3) Charts and reports from ConductorSoftware.com

? Psychological Safety and Learning Behaviour In Work Teams, Edmondson, Amy, Administrative Science Quarterly, Vol. 44, No. 2, June 1999

? The Relationship Between Engagement at Work and Organizational Outcomes, Harker, James K. et. al., Gallup.com, April 2016

? The Importance of Psychological Safety, Edmondson, Amy, HR Magazine, December 4, 2018