Examining the impact of perceived dissimilarities and leadership behaviours on individual perceptions of psychological safety of employees : a quantitative analysis

Abstract

This thesis examines the interplay between perceived diversity dissimilarities, leadership behaviours, and organisational practices in shaping employees’ psychological safety, defined as the belief that the environment is safe for interpersonal risk-taking without fear of negative consequences, an essential factor in fostering innovation, collaboration, and high performance. Data from 565 employees across multiple European organisations were analysed using quantitative methods grounded in a positivist paradigm. The research assessed how empowering and inclusive leadership, surface- and deep-level dissimilarities, inclusive culture, and commitment-based HR practices affect employees’ perceptions of psychological safety regarding their immediate peer group and organisational environment spanning multiple hierarchies and departments. Key results show that empowering leadership is strongly linked to psychological safety and specifically moderates the negative impact of cultural/ethnic dissimilarities in broader organisational settings. Inclusive leadership emerges as a significant predictor of perceived psychological safety within the immediate peer setting, yet loses statistical strength when employees evaluate their broader environment. Inclusive culture substantially mitigates the negative effects of perceived demographic and life-stage dissimilarities on perceived psychological safety within the broader organisational environment and addresses deep-level differences, including interpersonal, cultural/value-based, and knowledge/experiential aspects, across both peer and broader organisational settings. Meanwhile, commitment-based HR practices effectively buffer deep-level dissimilarities: at the peer-group level, they offset interpersonal, cultural/value-based and knowledge/experiential gaps, while at the broader organisational perception of psychological safety, they moderate cultural/value-based and knowledge/experiential differences. Overall, the findings highlight the critical role of aligning leadership styles, fostering an inclusive culture, and implementing targeted HR strategies to create psychologically safe workplaces, a foundation that enables high-performing organisations to fully leverage the potential of diversity in increasingly complex and dynamic environments.