Skip to main content

Verified by Psychology Today


A Psychologically Healthy Workplace Leads to Better Outcomes

Organizations that promote psychological health work better.

An organization that values psychological health and well-being not only rates high in psychosocial safety but also profits by minimizing employee absence, illness, and wasted time, according to studies from Australia.

Why is Australia, so far from North America and Europe, taking a lead in paying attention to this issue? Perhaps it has something to do with its reputation for good cheer in a landscape that features the desolate Outback region, occasional crocodiles, and poisonous jellyfish, as well as scenes of superlative beauty.

The psychosocial safety climate recognizes the finite capacity for how much humans can produce in a day, explained an author of the study, Maureen Dowd, PhD, professor of work and organizational psychology at the University of South Australia. "Psychosocial safety climate looks at the balance of worker psychological health versus productivity, and the priority that management has for worker psychological health."

Healthy workplaces have managers who place a high priority on the well-being of their workers, including their emotional health. They design worker roles that are not overly demanding and that provide for autonomy and social support.

Dowd is an author of a 2016 report based on interviews with 4,200 employees from several industries and published by Safe Work Australia, a government agency that develops workplace safety laws, which found that employers who place productivity over employee well-being lose on average $6 billion a year—about $4.5 billion in U.S. dollars—due to employee absences, as well as lower levels of employee engagement.

A healthy work environment can buffer against over-stimulation of built-in stress responses, whether neural (emergency responses of the amygdala, hypothalamus, and sympathetic nervous system), hormonal (adrenal, pituitary), and psychological (anger, anxiety) of its employees.

The need for private spaces as opposed to totally open workplaces, time for adequate sleep, a culture that prevents harassment and bullying, and flexible leave that takes family health needs into account also contribute to employee well-being, according to other studies.

After studying medical teams, Amy Edmondson at Harvard Business School concluded that an atmosphere of trust is a better predictor of success than individual performance measures of team members. In safe work-environments, members can share failure and mistakes, setting the stage for correcting them. I would add that in such an environment the members can believe in the good faith and the competence of others in the group, and give them support when needed. To see the opposite, look at agencies demoralized by political pressure, the effects of corporate takeovers on jobs, or the high-tension law firm featured in the BBC series “Silk”.

Australia’s happiness levels are still in the world’s top 10 according to international polls, but below the Nordic countries and not immune to the decline in social capital--a term that includes social support and trust in others--found in the US. Attention to workplace well-being can help boost the health of a company and a country.


Novotney, Amy (2017). Trends report: Research zeroes in on the costs of unhealthy workplaces. Monitor on Psychology 48 (10)

Edmondson, Amy (2017). Psychological safety, trust, and learning in organizations: A group-level lens. Harvard Business School/ Research Gate. Downloaded from on 5/26/2018.

Bryson, Bill. In a Sunburned Country. New York: Broadway Books, 2000.

More from Robert A. Lavine Ph.D.
More from Psychology Today