Why Psychological Safety and Recognition Drive Organisational Performance

Across workplaces, employees are asking a deceptively simple question: 

Do I matter here?

This is not a feel-good slogan. It is a core psychological need that fundamentally shapes how people engage and perform within an organisation. Feeling that our contributions are valued and that our work genuinely adds value is what organisational psychologist Zach Mercurio defines as mattering.

Why does this matter to organisations? Because mattering sits at the intersection of psychological safety and measurable economic outcomes. When people feel they matter, wellbeing improves, but when they don’t, risk quietly accumulates.

Mattering as a Core Psychological Need

Psychology has long established that humans are wired to seek significance. Maslow’s hierarchy of needs positioned belonging and esteem as prerequisites for growth and self-actualisation. Contemporary research clarifies that mattering is the connective tissue between these needs.

Mattering integrates belonging (“I am accepted”) with esteem (“I am valued”) and extends into self-actualisation (“What I do has impact”). 

When mattering is absent, progression up the psychological hierarchy stalls, motivation will become fragile and effort becomes solely transactional.

The Foundation Beneath Mattering

Before people can feel that they matter, they must feel safe.

Psychological safety — the shared belief that it is safe to speak up, ask questions, make mistakes, and contribute ideas without fear of negative consequences — provides the conditions in which mattering can emerge (Edmondson, 1999).

Under Work Safe Australia’s Code of Practice, psychosocial hazards such as poor support, low role clarity, high job demands with low reward, and poor organisational justice are recognised drivers of psychological harm.

From a motivational perspective, this aligns with self-determination theory, which shows that wellbeing and sustained performance depend on three psychological needs: relatedness, competence, and autonomy (Deci & Ryan, 2000). Psychological safety enables all three, and mattering is how employees experience these needs being met at work. 

How Mattering Becomes Real

Recognition is not the same as praise, nor should it be positioned as a workplace perk. It is the primary behavioural mechanism through which mattering is communicated.

Effective recognition answers three implicit psychological questions:
- Was I noticed?
- How did my effort or contribution make an impact?
- How is my contribution valued here?

When recognition is timely, specific, and linked to impact, it strengthens the workers esteem and reinforces competence (van Woerkom & de Bruin, 2016). 

When recognition is inconsistent, performative, or absent, employees begin to question their value, even if they technically “belong” to the organisation.

This explains why recognition is so strongly associated with engagement and retention, because employees don’t just work harder when they feel valued — they work with greater meaning and resilience.

Why Mattering Impacts the Bottom Line

The financial cost of poor mental health at work is well established. In Australia, psychosocial hazards are a leading contributor to absenteeism, presenteeism, and prolonged workers’ compensation claims (Safe Work Australia, 2023).

What is less acknowledged is where these costs begin: long before a claim is lodged, when employees stop feeling valued. SuperFriend’s Indicators of a Thriving Workplace (2023) found that only 11% of respondents felt their workplace supported their mental health.

Comparatively, research from Gallup (2023) shows that organisations with stronger psychological safety and recognition consistently demonstrate:

- Higher engagement and productivity
- Lower absenteeism and presenteeism
- Reduced severity and duration of psychological injury claims
- Improved return-to-work outcomes

Mattering is the human mechanism behind these results. When employees know they matter, they invest emotionally, cognitively, and behaviourally in both their work and their workplace but when they don’t withdraw is inevitable, and economic consequences will almost always follow.

A Modern Workplace Hierarchy

In contemporary workplaces, the assumption that performance automatically drives recognition no longer holds. A new hierarchy is emerging:

1. Psychological Safety
“I can speak up here without fear of consequences.”
2. Mattering
“My contribution is valued, and the effort I put in genuinely matters.”
3. Engagement and Performance
“I choose to do my best work here.”

Organisations that bypass this middle step may see short-term output gains but those gains are rarely sustainable and are often followed by burnout and ultimately turnover.

Burnout is rarely caused by workload alone. Decades of research show it is driven by sustained high effort paired with low psychological return. This is where mattering becomes critical: it sits squarely in the reward domain — not financial compensation, but psychological return. 

The same mechanism explains why mattering is tightly linked to turnover. Employees rarely leave because work is hard; they leave when work is hard and thankless. 

Large-scale engagement research consistently shows that employees who do not feel recognised or valued are significantly more likely to seek other roles, with feeling “replaceable” emerging as a strong predictor of intent to leave — even among high performers (Gallup, 2023).

From a systems perspective, the absence of mattering removes a critical protective resource, accelerating the shift from short-term productivity to long-term depletion. 

How Leaders Can Measure and Strengthen Mattering

Investing in mattering is about consistent, measurable practice embedded into leadership and organisational systems. 

Leaders who cultivate authentic mattering focus on both perception and experience, they:

1. Assess psychological safety and perceived recognition with robust tools
Move beyond compliance checks or generic satisfaction surveys to a system that captures experiences across safety, leadership, connectedness, work design, and capability, benchmarking against national and industry standards.

2. Link recognition to contribution and impact
Recognition should celebrate what employees do, not who they are or how long they’ve been in the role. Tying acknowledgement to tangible contributions reinforces both competence and purpose and mitigates perceptions of bias.

3. Train leaders to notice effort, learning, and recovery, not just results
Leaders should recognise when employees are adapting or recovering from high-demand periods. Structured opportunities for team reflection and recovery enhance psychological safety, reduce stress, and improve engagement (Sonnentag, 2018; Totterdell et al., 2012).

4. Monitor silence, disengagement, and turnover as early risk indicators
Subtle withdrawal from meetings or low engagement scores are early warnings that mattering may be absent. Tracking these indicators enables leaders to intervene before disengagement turns into burnout or turnover.

5. Embed mattering into WHS, wellbeing, and leadership frameworks
Make mattering structural, not optional. Integrate it into wellbeing programs, leadership competencies, and WHS risk management. Track recognition and inclusion alongside safety compliance to communicate: your effort matters and your wellbeing counts.

This ensures mattering is not aspirational, but operational - leaders and teams are consistently guided to reinforce value, significance, and sustainable engagement. 

The Future of Work Is Human

At Connect Psych, we see every day how mattering transforms workplaces. When organisations move to cultivate genuine significance  through psychological safety and recognition, culture begins to shift, and retention stabilises.

This need is especially pronounced among younger workers. Gen Z and younger Millennials increasingly prioritise work that offers them purpose, growth, and frequent, meaningful recognition — not just financial reward (Deloitte Australia, 2025). Surveys show this cohort is more likely than older generations to leave roles where they feel unseen, undervalued, or replaceable. As these generations become the majority of the workforce, cultivating mattering is a strategic imperative for attracting and retaining talent.

Further, investing in mattering delivers clear human and economic returns: it strengthens engagement, reduces hidden costs from burnout and turnover, and builds a resilient, high-performing workforce (Johns Hopkins, 2023).

If we want workplaces where people thrive, contribute meaningfully, and stay for the long term, we must start with one essential question:

Does everyone here know they matter?

Want to hear more from Dr. Natalie Flatt and her work at Connect Psych? Follow her on Linkedin at: https://www.linkedin.com/in/drnatalieflatt/

Key Takeaways

• Mattering is a core psychological need and a strategic imperative: Feeling that one's contributions are valued and that one's work genuinely adds value is a core psychological need that drives employee engagement, wellbeing, and performance. It's positioned as the connective tissue between psychological safety and measurable economic outcomes.

• Psychological safety is the foundation for mattering: Employees must first feel psychologically safe before they can feel that they matter. The article presents a new workplace hierarchy: Safety → Mattering → Engagement and Performance.

• Recognition is the mechanism that makes mattering real: Effective recognition is the primary behavioral mechanism for communicating mattering. It must be timely, specific, and linked to the actual impact of an employee's contribution, rather than being just general praise or a perk.
  
  

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