Why psychological safety is essential for high performance

Employees are more engaged, motivated, and loyal when they know their contributions are valued and their wellbeing is genuinely cared for, writes Cherie Mylordis.

Feeling valued and cared for not only boosts productivity but also reduces burnout and absenteeism. Teams become better equipped to handle the stresses of modern work life because they know their organisation genuinely cares about their contributions and wellbeing.

The cost of ignoring psychological safety is high. Organisations that fail to foster this culture may face higher turnover or the dreaded “quiet quitting”. Employees are less likely to stay with organisations where they do not feel empowered to contribute.

In my research, an executive in the manufacturing sector noted: “Lack of empowerment and experimentation, being stuck in the past or not moving at the right pace. That won’t fulfil my purpose and what I enjoy doing.”

Fostering inclusive leadership

Psychological safety is also essential for inclusive leadership because diverse perspectives are valuable only when people feel safe to share them openly. Research shows that diverse teams outperform more homogeneous ones, but only if every member feels secure enough to contribute without fear of judgement.

In my study, there was a strong emphasis on promoting diversity and equity in leadership roles and creating an inclusive environment for workers of all backgrounds. One executive shared: “I like to surround myself with people from diverse backgrounds to encourage diversity of thought.”

Driving organisational agility

In a fast-paced business environment, agility is essential. Teams need to quickly adapt to changing circumstances, and psychological safety enables transparency and quick decision making to make this possible. When employees feel safe, they are more likely to share early warnings, question assumptions, and offer critical feedback – which are vital for navigating uncertainty and change.

In the absence of psychological safety, fear of retribution can stifle crucial conversations. As one leader in my study pointed out: “I worry about how to safely explore innovation without my job being on the line.”

This is where a culture of psychological safety makes all the difference, turning setbacks into learning opportunities and encouraging a growth mindset.

Creating a high-performing team

Building a psychologically safe environment takes intentional, consistent effort. Here are some practical ways to start:

• Lead by example: Be open about your own experiences of failure and learning, and encourage others to do the same.
• Look for gaps: Seek honest feedback to uncover any unintentional behaviours that might be stifling views or causing offence.
• Active listening: When employees speak up, listen with full attention and without judgement. Give them the space to share concerns and ideas fully.
• Encourage open dialogue: Establish regular opportunities for feedback and idea sharing without fear of reprisal. This could be a ritual at the end of meetings or during team check-ins.
• Acknowledge contributions: Publicly appreciate employees who share new ideas or voice concerns, reinforcing that such contributions are both valued and essential to the team’s success.
• Address conflict constructively: When conflicts arise, focus on resolution and learning over defensiveness or blame.

These steps create the conditions for psychological safety to flourish, enabling teams to perform at their best while continuously improving.

Thriving v surviving

Organisations that combine a clear purpose with a culture of psychological safety don’t just survive – they thrive. Purpose gives employees a strong sense of direction, while psychological safety ensures they feel empowered to contribute to that vision fully. This combination is the foundation of a future-fit, high-performing workplace.

In a climate where agility, innovation and inclusivity are vital for success, organisations that fail to foster psychological safety risk being left behind. But those that build it into their culture, alongside a clear purpose, will unlock the full potential of their teams, driving performance to new heights.

The question isn’t whether your organisation needs psychological safety. The question is: are you ready to unlock the full potential of your teams by combining purpose with psychological safety?

Wouldn’t you like your people to bring their best contribution to work each day?

Cherie Mylordis is a work futurist, a leadership, transformation and innovation coach, and founder of nextgenify.