Change Management Unveiled: Navigating Psychosocial Hazards.

Senior Consultant, Kate Lawrence explains what the new code of practice on managing psychosocial hazards means for your project.

Psychosocial hazards – the unwritten rules of the workplace.

A psychological work contract, also known as a psychological contract, refers to the unwritten set of expectations and obligations that exist between an employee and an employer. It goes beyond the formal, legal employment contract that outlines salary, benefits, and other explicit terms. The psychological contract focuses on the intangible aspects of the employment relationship, such as mutual understanding, trust, and the emotional connection between the employee and the organisation.

This concept is embedded in the idea that employees bring not only their skills and time to a job but also their personal values, aspirations, and expectations. Similarly, employers provide not only a salary but also opportunities for growth, a positive work environment, and other intangible benefits.

Consider the relationship that you have with your organisation. What unwritten rules and expectations do you have? Like any relationship, trust and respect underpin our feelings of safety and satisfaction. If these are broken, they can cause a cliff-sized drop in morale, productivity, and loyalty.

On the 23rd of January 2023, a new code of practice to manage psychosocial hazards in the workplace came into effect as part of changes to Tasmanian Work Health Safety (WHS) regulations.

What are psychosocial hazards?

Psychosocial hazards are aspects of work that have the potential to cause psychological or physical harm. The list below indicates many of the hazards that can be present at work, including on projects. These hazards, if left unchecked, could, at the very least, result in a decline in morale and productivity and, at worst, psychological harm. It’s important to mitigate the risks associated with these hazards and not just during a project rollout or larger workplace change.

Types of psychosocial hazards:

• Job demands

• Lack of role clarity

• Poor organisational change management

• Inadequate rewards and recognition

• Poor organisational justice

• Exposure to traumatic events or material

• Remote or isolated work

• Unfavorable physical environment

• Bullying and harassment, including sexual harassment

• Poor interpersonal relationships and conflict

• Poor support

• Violence and aggression

The relationship between psychosocial hazards and change management

Change management involves a people-centric approach that organisations use to transition from their current state to a desired future state. This can be delivered through a project management framework where the change manager and project manager work hand in hand to deliver the future state. Workplace change can return positive results for people such as increased productivity, role clarity, and work satisfaction. Change can also be challenging, and affect morale, engagement, and people’s mental health if it isn’t managed well. When significant changes occur in an organisation, such as restructuring, mergers, or the introduction of new technologies, employees can experience increased levels of stress and uncertainty. This, in turn, can exacerbate psychosocial hazards and lead to negative outcomes like decreased job satisfaction, reduced performance, and resistance to change.

Consulting employees is a critical element of implementing change and is a legal requirement under Australian workplace health and safety laws.

Case study

Let’s look at a real-life case in point. An Australian Public Service agency wanted to introduce a new performance management system to include performance ratings on the number and frequency of work assessments. The agency decided that only permanent employees and not contractors needed to be consulted pre-implementation. Post-implementation, contractors complained that the new system caused bullying and harassment behaviors, increased stress, and had a negative impact on their mental health.

Enter Comcare – Australia’s national work health and safety and workers’ compensation authority. Their assessment of the complaint found that it was predictable that all affected employees may feel pressure from the increased performance rating scrutiny. This was particularly the case for employees in more vulnerable employment arrangements.

It was found that the agency’s actions disregarded the Work Health and Safety Act 2011 (WHS Act) in relation to:

• Failure to manage the risks to psychological health and safety in the project rollout of the performance management system; and
• Failure to consult all workers on a change that may affect their psychological health and safety, and a failure to include Health and Safety Representatives (HSRs) in that consultation.

The agency was directed to develop a corrective action plan to ensure:

• There was a process/system in place to identify and manage psychological hazards associated with change that could affect workers’ health and safety that change; and
• All workers and their HSRs were included in the consultation on the change.

Three things you can do now to manage psychosocial hazards during your workplace change or project:

1. Show empathy! Project sponsors who are empathetic, and supportive, and provide a clear vision can help mitigate psychosocial hazards during uncertainty.

2. Be as inclusive as you can! Providing adequate information and training helps people to have a sense of control and ownership during the project rollout. This will reduce feelings of powerlessness and anxiety whilst boosting employee engagement.

3. Gather feedback regularly from employees about their concerns and challenges to create a more positive and adaptive work environment. Even more importantly, remember to communicate and/or act on these concerns and challenges!

Incorporating a psychosocial protective lens into your project can make a significant difference to the well-being of your people and the success of your project. Our team of change managers understand how to assess psychosocial hazards and mitigate these during a project-based change.

Want to know more? Call us on 03 6105 0546 or email us at [email protected].

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