
Psychological Safety as a Revenue Driver: Calculating the Risks to Your Bottom Line
Do you speak up at work? If you feel safe at work, youโd answer โyesโ to this question. Can you say the rest of the employees in your company would agree?
Psychological safety is built on each interaction leaders have with their direct reports. Unfortunately, low psychological safety is also a root cause of many HRs toughest challenges: turnover, absenteeism, and low performance because it is easy to get away with in the workplace.
Over 80% of workers rank psychological safety as one of the most important components of their jobs.
Our recent webinar with Kim Williams, โThe Cost of a Brilliant Jerk,โ details the accurate impact to the bottom line if your company currently has leaders that micromanage, exclude, and use their power as abuse (consciously or unconsciously).
What Does Psychological Harm Feel Like?
I have personal experience with a brilliant director. HR was sympathetic at first, but the director changed the narrative, and I ended up having to resign six months after my start-date.
After speaking to leadership about issues like shifting goal posts, withholding critical information from my colleagues, setting vague expectations, and mental health issues that were resurfacing from other team members, I was handed a performance improvement plan.
I told HR that mental health issues were arising on the team as a result of this leaderโs behavior and that my behavior outlined in my PIP showed the PTSD I was now experiencing. I had been a top performer, but by that point, I was agitated, anxious, and depressed with the environment we were working in.
Her response? She gave me the link for our EAP (employee assistance plan). I went on short-term disability for PTSD. I knew mental health issues were at the root of what was going on in that environment, there was nothing else I could do.
Five people resigned after my departure. How much did it cost when half the team exited? According to our recent webinar, it was an estimated loss of $177,500.
Estimate the costs with tools in this kit.
What is Psychological Safety?
One webinar participant on this topic asked us, โArenโt some of us just more sensitive than others?โ What really is psychological safety?
Harvard Business Review (HBR) describes psychological safety as an environment in which candor is expected and wonโt be penalized. Leaders are open to all viewpoints, especially when they differ from their own.
A safe environment is when your employees take interpersonal risks โ by expressing unpopular opinions, disagreeing constructively, and sharing mistakes, failures, and other potentially embarrassing information. They feel comfortable being vulnerable with their leader and their peers.
When people withhold their ideas, questions, and doubts, their teamโs mistakes and experience of failure increases. HR knows quality, innovation, and performance all enhance with employeesโ input, but psychological safety canโt be a policy. It has to come from each leaderโs ability to make their employees feel safe, at work.
HBR says safety is the condition of being protected from danger, harm, or injury. Wanting to be nice, people who avoid being honest, whether they realize it or not, contribute to producing subpar work. Without candid feedback and open sharing of informationโgood and badโcoordination, quality, and learning on a team or a project suffer.
Psychological safety is built by everyoneโat all levels of the company. Itโs a cultural shift to address some of the toughest and most valuable problems to solve in the workplace.
What Psychological Safety Isnโt:
- Being nice or never arguing.
- Your idea always being supported
- The company you work for never has layoffs
- You canโt address weaknesses or assign accountability
- A policy
Psychological safety is not the end goal, itโs an enabler of success. By showing interest in other peopleโs ideas and concerns, team members can reinforce their peersโ voices and help establish a productive learning climate.
Who is a Brilliant Jerk?
It can be difficult to identify these leaders because they are brilliant at making their case. What you can do is notice the red flags like the sequence of events and other voices.
If an employee shares a problem with senior leadership and then, almost immediately, you get a request from the supervisor to put them on a performance improvement plan โ thatโs a red flag.
If other employees have approached you with similar concerns, this is another red flag.
What makes this leader brilliant is that they are well-respected in the company, a high-performer with close relationships within the organization. They are skilled at playing by the rules, and using their authority. It will be easy to see their side.
Accountability is risky to this executive.
But at what cost to the organization and your companyโs reputation? Is it safer to keep this high esteemed executive from exposure or make your role in HR easier by solving your workplace dysfunction?
Here are some common signs you will want to listen for when an employee comes to you with information about a senior leader:
- Set vague or shifting expectations
- Withhold critical information or support
- Fail to communicate clearly
- Move the goalposts on performance metrics
Workplace Bullying Project details other signs to watch for:
- Isolation: Being cut off from your team or colleagues
- Micromanagement: Your work is excessively scrutinized
- Surveillance: Feeling like youโre being constantly watched throughout your work day
- Communication Restrictions: Being forbidden from speaking to colleagues or leaders despite needing to for your job
- Overreaction to Mistakes: Minor errors lead to unpredictable emotional or angry responses which leads to feeling like youโre walking on eggshells
- Resource Denial: Having essential resources removed while still being expected to maintain or improve your performance
- Unclear Expectations: Being given ambiguous and regular shifting of priorities, leading to confusion and uncertainty
- Boundary Guilt: Being made to feel guilty for asserting your personal boundaries and manipulated into ignoring your needs
- Undermining Achievements: Your accomplishments are overlooked, downplayed, or credited to others
Estimating the Costs of Psychological Safety
After recognizing these signs, the challenge will be what to do with this information. Youโre not leading these teams, so how can you solve this problem?
If you already know there is an issue, consider spreading public information in a company newsletter or post on an intranet site for employees to educate themselves on the signs to watch out for when experiencing psychological abuse.
This achieves two things: holds managers accountable, if this behavior is reported, and educates the employees while validating their experience which will enhance their feelings of safety and well-being.
Advocating for employees serves the company and has impacts to bottom-line results. Outlining the cost of a toxic executive will help create buy-in from your C-Suite team for psychological safety initiatives like more leadership training.
HR will need to watch out for office politics and groupthink. Groupthink is when people hide information to save face or to be agreeable (or both). Members donโt want to disrupt what they erroneously assume is a consensus.
But what happens when one member doesnโt speak up for fear of being the odd man out and their premonitions turn out to be right? Like getting hit with an EEOC (Equal Employment Opportunity Commission) claim?
Many managers can also be completely unaware of these behavior patterns, and, since covid, PTSD symptoms have inadvertently affected many. High intensity and high emotion can result in control issues manifesting as toxic behaviors like micromanagement. Education can help make teams and leaders become more aware before the problem manifests.
During orientation, you can provide the skills and tools for your leaders to be successful. One of these principles is showing them first that psychological safety is a revenue driver, and second what behaviors to be aware of so they can use it as an enabler to their success.
We may not all care about making employees feel warm and fuzzy. But we can agree on how these underlying dynamics influence the bottom-line and HR metrics. Psychological safety is worth pursing as one of the key enablers for success for any organization.
Download our recent toolkit.
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The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter.

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