“Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships.”
Every sincere connection we make is based on trust, and our work lives are no exception. The secret behind long-lasting and successful organizations is the high engagement level of people and healthy relationships at work. This might sound like stating the obvious; however, researches show that a significant number of organizations seem to be not paying enough attention to their employees’ emotions and well-being at work.
From the compliance point of view, most of the time, this lack of attention results in one important issue: misconduct. According to the research titled "The Trust Gap: Expectation vs Reality in Workplace Misconduct and Speak Up Culture" , 59% of UK office workers and 62% of US office workers surveyed described their business as either not ethical, transparent or authentic, or showing a lack of accountability or compassion.
The trust gap highlights organizations are capable of dealing with issues of workplace misconduct; however, there’s a complete lack of faith among the workforce that they will. On average, only 37% of workplace misconduct incidents are reported by those who have personally experienced or witnessed an incident. 
Ethics & Compliance Initiative (“ECI”) 2021 Global Business Ethics Survey ("GBES") regarding whistleblower retaliation states that the rate of retaliation against employees for reporting wrongdoing in the US was 79% in 2020 and notes if left unaddressed, high rates of retaliation, can erode ethical culture and undermine efforts to encourage employees to speak up and raise concerns.
These findings address a lack of psychological safety for employees, which is a huge obstacle to building an ethical culture where everyone feels safe and eager to do the right thing at work.
What is Psychological Safety?
Psychological safety is defined as “a belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns or mistakes and that the team is safe for interpersonal risk-taking” by Amy Edmondson, author of The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth.
We thrive in an atmosphere where we are respected, included, and safe. These traits allow us to innovate and bring something new, something better, to the table. If an organization lacks an environment where we can speak up with ideas or concerns or if the environment makes us believe we will be punished or humiliated by doing these, then most likely, fear can shut us down. In this scenario, organizations are in big trouble since there is no one brave enough to say something when things go wrong within the team. Therefore, companies like Google and Microsoft acknowledged its importance, and psychological safety is accepted as one of the key drivers for team performance.
According to Dr. Timothy Clark, author of “The 4 Stages of Psychological Safety: Defining the Path to Inclusion and Innovation”, in order for employees to experience a high level of psychological safety, there are four stages:
- Stage 1- Inclusion Safety: Connection and belonging are basic human needs. When employees know that they are accepted in the team as who they are, they interact with other members without fear of rejection, embarrassment, or punishment, boosting confidence, resilience, and independence. Being welcomed with your unique talents, ideas, and qualities creates a sense of belonging, which opens the gate for stage 2.
- Stage 2- Learner Safety: Learner Safety satisfies the basic human need to learn and grow. The learning process is both intellectual and emotional. This stage allows employees to feel safe while raising their hands, speaking up, asking questions, giving and receiving feedback, and making mistakes. If employees fear that they will be perceived as “dumb” or “troublemakers” for asking a question or raising concern regarding how things are going at work, it can block the way to having the courage to speak up in case of misconduct.
- Stage 3 – Contributor Safety: When we feel safe to contribute as a full member of the team, using our skills to participate in the value-creation process, we tend to do our part with enthusiasm because we know that we are making a difference. When our contribution matters to our team, we have a natural desire to apply what we’ve learned to make a meaningful contribution. Therefore, if contributor safety is present, ethics and compliance is no longer something you force your employees to follow, it becomes something they do voluntarily.
- Stage 4 – Challenger Safety: This is the most powerful stage of psychological safety, which allows new ideas to surface and supports us in questioning and challenging the ideas of senior members of the team. It creates an opportunity to change things to become better as a team and not have a blind fate in the status quo.
If employees are welcomed to move through these stages, it is expected that they will be experiencing a high level of psychological safety at work which is an important element of establishing an ethical culture. Especially challenger safety may also help raise awareness of one of the most common cognitive biases at work, “status quo bias”. If questioning and challenging the current for the better can be accepted as part of the company culture, the cognitive tendency of people to keep things as they are may be reduced, and new rules, policies, or rituals can be accepted with ease in a way that supports the compliance program.
Speak-up Culture and Psychological Safety
When organizational environments are characterized by trust and a climate of respect, it enables members to feel free to speak up effectively. Indeed, this crucially affects compliance programs since fear of retaliation is taking center stage while considering the root causes regarding why employees tend to hesitate to say something when they are involved in or observe any wrongdoing.
This is not only a cultural issue for companies but also a legal challenge since regulators are trying to prevent fear of retaliation by enacting whistleblowing laws around the world and obliging companies to create a safe environment for speaking up. If companies fail to do so, they may face enormous amounts of administrative fines and lose reputation which may affect turnover negatively in the end. Therefore, companies should clearly understand the relationship between speak-up culture and psychological safety in order to avoid such risks.
A recently published research called "Fostering Ethical Conduct Through Psychological Safety" by Antoine Ferrère, Chris Rider, Baiba Renerte, and Amy Edmondson analyzed the perceptions of those who report misconduct against those of “silent bystanders.” The study revealed that employees who felt the most psychologically safe were most likely to have reported the misconduct they observed. This remained the same after including a range of other psychological factors that could influence speak-up culture, such as perceived levels of organizational justice, fairness, and trust.
Another important finding is that a lower level of psychological safety may be a consequence of the employee having witnessed unethical behavior. In short, the more unethical behavior an employee observed, the more likely they were to feel psychologically unsafe. Witnessing more unethical behavior may diminish the psychological safety experienced by an employee.
In correlation with this insight, it can be said that if the reason behind the reoccurring unethical behaviors within a company is the lack of necessary measures or the company’s control mechanisms, which invites even more misconduct, as we mentioned in our previous article about broken windows theory (see the article here), this may trigger employees to lose trust and feeling of psychological safety to keep doing the right thing.
This might be an important lesson for companies to enforce their policies and procedures as they should and not turn a blind eye to employee concerns since the number of observed unethical behaviors and the level of psychological safety affect each other directly, like they are two sides of the same coin.
How to Create and Measure Psychological Safety at Work?
In order to build psychological safety within organizations, there are some key elements to consider:
Understand where your organization stands in terms of psychological safety. The best way to measure the current state of employee experience regarding psychological safety is to conduct surveys. Without having insights, trying to create a psychologically safe workplace would be like whistling in the wind. You can ask employees to anonymously rate, on a scale from 0 to 10, their agreement on the statements indicating their perception of the team, sense of belonging, and speaking up in a way that will reflect their emotions on your survey’s focus area. This will help the company to understand which teams need help to boost psychological safety. Also, by periodically repeating these surveys, you can see how your employees’ emotions change over time in regard to psychological safety.
Tone from the Top
According to McKinsey’s study called "Psychological Safety and the Critical Role of Leadership Development," creating psychological safety begins with companies’ C-level leaders developing and embodying the leadership behaviors they want to see across the organization. Open-dialogue skills and the development of social relationships within teams are important skill sets for senior leaders to create an inclusive work atmosphere. Therefore, it is important for leaders to be supportive and consultative to provide a sense of safety for employees. In order to do that, companies can design leadership programs for their leaders to provide necessary training and understanding of psychological safety. Communication across the organization is also an important issue. Make sure everyone working within the organization knows and trusts that psychological safety is important for you.
When you think about "culture," it is something intangible yet has an enormous effect on the organization’s well-being. To craft an ethical organizational culture where people are feeling safe to speak up, raise their concerns, are eager to contribute to the company’s purpose, make decisions in line with company values and policies, and comply with laws, fostering psychological safety is one of the essential components.
Research called "Ritual Design: Crafting Team Rituals for Meaningful Organizational Change" by F. Kürşat Özenç and Margeret Hagan suggests that a successful organizational culture can be shaped intentionally by ritual design. Rituals are repeated enactments of a particular set of behaviors, scripts, and interactions. Rituals in the workplace can strengthen the organization’s desired behaviors, by creating a sense of belonging and making changes permanent.Therefore, we add that designing rituals for companies where people can feel included, and important and that they are making a difference by speaking up can have a great impact on employees’ perception of psychological safety.
How to create a work atmosphere that is safe, inclusive, and ethical has always been a serious question. Since compliance programs are shaped around human behaviors, we should seek the answer among the human interactions and emotions that these interactions create. Trust is one of the most powerful emotions for humankind to create safe and healthy relationships. Therefore, companies should find different ways to nourish this feeling if they wish to have an ethical culture where everyone feels safe to speak up, raise concerns, and is willing to do the right thing in line with laws and company policies. This can be achieved with a high level of psychological safety. In a psychologically safe workplace, the team is safe for interpersonal risk-taking and sharing ideas or concerns, and no one is humiliated by doing so. To foster psychological safety, there are some key elements to consider. When periodically applied, these elements can help to increase employees’ level of feeling psychologically safe. As a result, compliance programs can be more effective in protecting companies from legal, financial, or reputational risks and making sure every stage of the program is enforced properly.
 The Trust Gap: Expectation vs Reality in Workplace Misconduct and Speak Up Culture, pg 12
 See ibid., 12
 Bell, C.: Ritual: Perspectives and Dimensions. Oxford University Press, New York (2009)
 Grant, H.: New Research: Rituals Make Us Value Things More. In: Harvard Business Review. 12 (2013)
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