Algorithmic Management and Psychological Safety in AI-Driven Hybrid Workplaces
Keywords:
Algorithmic Management, Artificial Intelligence in Organizations, Psychological Safety, Employee Engagement, AI Governance, Human–AI Collaboration, Digital Workplace MonitoringAbstract
The increasing adoption of algorithmic management systems in AI-driven organizations is transforming how employees are monitored, evaluated, and directed. While artificial intelligence enhances efficiency and data-driven decision-making, its impact on employee psychological safety remains underexplored. This study investigates how algorithmic management intensity influences psychological safety and employee engagement in digitally monitored workplaces. Drawing on organizational behavior theory, a quantitative research design was employed using survey data collected from 312 employees across technology-enabled firms. Structural Equation Modeling (SEM) was applied to examine the relationships among algorithmic monitoring, perceived transparency, human managerial support, psychological safety, and engagement. The findings reveal that high levels of algorithmic control negatively affect psychological safety when transparency and human oversight are limited. However, when AI systems are perceived as transparent and supportive, psychological safety significantly improves, leading to higher employee engagement. Furthermore, psychological safety mediates the relationship between algorithmic management and engagement outcomes. These results highlight the importance of responsible AI governance and balanced human–AI interaction in maintaining trust within organizations. The study contributes to emerging research on AI in management by integrating algorithmic management into the psychological safety framework and offers practical guidance for organizations implementing AI-driven performance systems.
References
Ajunwa, I., Crawford, K., & Schultz, J. (2021). Algorithmic management in work organizations: Challenges, opportunities, and research directions. Journal of Business Ethics, 175(3), 695–711. https://doi.org/10.1007/s10551-020-04668-8
Andra, K. A., Baker, S., & Wong, M. (2022). Organizational support and stress appraisal: Buffering effects on employee engagement. Journal of Occupational Health Psychology, 27(1), 15–29. https://doi.org/10.1037/ocp0000298
Bakker, A. B., Demerouti, E., & SanzVergel, A. I. (2004). Burnout and work engagement: The JD–R approach. Journal of Applied Psychology, 89(2), 483–494. https://doi.org/10.1037/0021-9010.89.2.483
Beck, J., Eckman, S., Kern, C., & Kreuter, F. (2025). Bias in the loop: How humans evaluate AIgenerated suggestions. arXiv. https://doi.org/10.48550/arXiv.2509.08514
Brougham, D., & Haar, J. (2018). Smart technology, artificial intelligence, robotics, and algorithms (STARA): Employees’ perceptions of our future workplace. Journal of Management & Organization, 24(2), 239–257. https://doi.org/10.1017/jmo.2017.57
ChamorroPremuzic, T., Akhtar, R., Winsborough, D., & Sherman, R. (2019). The talent equation: Big data lessons for navigating the new world of work. Harvard Business Review Press.
Chen, J., Ma, Q., & Shao, Y. (2025). The doubleedged sword effect of algorithmic management on work engagement of platform workers: The roles of appraisals and resources. Frontiers in Psychology, 16, 1522088. https://doi.org/10.3389/fpsyg.2025.1522088
Deci, E. L., & Ryan, R. M. (2000). The “what” and “why” of goal pursuits: Human needs and the selfdetermination of behavior. Psychological Inquiry, 11(4), 227–268. https://doi.org/10.1207/S15327965PLI1104_01
de Brito Duarte, I., Alves, S., & de Sousa, H. (2023). Building trust in humanAI collaboration: Transparency and fairness as key mechanisms. International Journal of Human–Computer Studies, 168, 102989. https://doi.org/10.1016/j.ijhcs.2023.102989
DoshiVelez, F., & Kim, B. (2017). Towards a rigorous science of interpretable machine learning. arXiv. https://arxiv.org/abs/1702.08608
Edmondson, A. C. (1999). Psychological safety and learning behavior in work teams. Administrative Science Quarterly, 44(2), 350–383. https://doi.org/10.2307/2666999
FieglerRudol, J., Lau, K., Mroczek, A., & Kasperczyk, J. (2025). Exploring human–AI dynamics in enhancing workplace health and safety: A narrative review. International Journal of Environmental Research and Public Health, 22(2), 199. https://doi.org/10.3390/ijerph22020199
Gal, U., Jensen, T. B., Lyytinen, K., & Yoo, Y. (2020). Organizing for digital transformation: Balancing exploration and exploitation of digital innovation. Journal of Information Technology, 35(1), 29–44. https://doi.org/10.1177/0268396219875308
GarcíaMadurga, M.Á., GilLacruz, A.I., SazGil, I., & GilLacruz, M. (2024). The role of artificial intelligence in improving workplace wellbeing: A systematic review. Businesses, 4(3), 389–410. https://doi.org/10.3390/businesses4030024
Glikson, E., & Woolley, A. W. (2020). Human trust in artificial intelligence: Review of empirical research. Academy of Management Annals, 14(2), 627–660. https://doi.org/10.5465/annals.2018.0057
Górka, E., Baran, D., Wojak, G., Ćwiąkała, M., Zupok, S., Starkowski, D., Reśko, D., & Okrasa, O. (2025). The impact of artificial intelligence on enterprise decisionmaking process. arXiv. https://doi.org/10.48550/arXiv.2512.02048
Huang, M.H., & Rust, R. T. (2021). Artificial intelligence in service. Journal of Service Research, 24(1), 3–16. https://doi.org/10.1177/1094670520902262
Jeong, T., Lee, S., & Kim, H. (2024). Coaching leadership and AI adoption: Effects on employee wellbeing. Leadership Quarterly, 35(4), 101836. https://doi.org/10.1016/j.leaqua.2024.101836
Jiang, Z., & Kleiner, B. H. (2023). Psychological safety and organizational outcomes in digitally mediated workplaces. Journal of Organizational Behavior, 44(5), 560–579. https://doi.org/10.1002/job.2667
Kim, J., Park, S., & Lee, Y. (2025). AI adoption and psychological safety: A threewave longitudinal study. Journal of Applied Psychology, 110(2), 241–260. https://doi.org/10.1037/apl0000652
Kong, D., McGrath, M., & Wang, Y. (2023). Trust and human–AI collaboration at work. Human Resource Management Review, 33(1), 100777. https://doi.org/10.1016/j.hrmr.2022.100777
Koo, B., Kim, J., & Lee, H. (2024). Employee–AI collaboration effects on job insecurity and psychological strain. Behavioral Sciences, 16(1), 13. https://doi.org/10.3390/bs16010013
Lee, M. K., Kusbit, D., Metsky, E., & Dabbish, L. (2015). Working with machines: The impact of algorithmic and datadriven management on human workers. CHI Conference on Human Factors in Computing Systems, 1603–1612. https://doi.org/10.1145/2702123.2702548
Li, Y., Wang, L., & Yang, K. (2025). Algorithmic management and employee resilience: The mediating role of psychological resources. Journal of Business Research, 154, 113412.
Liu, X., Zhang, T., & Qiu, L. (2025). AI governance and organizational fairness: Impacts on employee trust and engagement. Information Systems Journal, 35(7), 789–812.
Logg, J., Minson, J. A., & Moore, D. A. (2019). Algorithm appreciation: People prefer algorithmic to human judgment on difficult tasks. Management Science, 65(6), 2765–2780. https://doi.org/10.1287/mnsc.2018.3093
Ma, Q., Shao, Y., & Chen, J. (2025). Appraisal mechanisms in algorithmic management effects on platform workers. Human Relations, 78(4), 512–536.
McGrath, M., Kong, D., & Johnson, L. (2025). Variations in AI trust and workplace outcomes. Journal of Management Information Systems, 42(1), 23–45.
Milanez, S., Lemmens, B., & Ruggiu, E. (2025). How widespread is algorithmic management in workplaces? OECD Publishing. https://doi.org/10.1787/287c13c4-en
Naseem, S., & Mahmood, T. (2023). Psychological safety and employee engagement under digital surveillance. Computers in Human Behavior Reports, 6, 100251. https://doi.org/10.1016/j.chbr.2023.100251
ParentRocheleau, X., & Parker, S. K. (2022). Algorithms at work: The implications of algorithmic management for autonomy and job design. Annual Review of Organizational Psychology and Organizational Behavior, 9, 261–286. https://doi.org/10.1146/annurev- orgpsych-012220-084959
Pei, Y., Gardner, J., & Zhao, L. (2021). Algorithmic accountability and workplace fairness. Journal of Business Ethics, 171(3), 431–447. https://doi.org/10.1007/s10551- 019-04269-7
Reich, A., Wolfe, D., Price, M., Choe, A., Kidd, F., & Wagner, H. (2026). Safety first: Psychological safety as the key to AI transformation. arXiv. https://doi.org/10.48550/arXiv.2602.23279
Ryan, R. M., & Deci, E. L. (2020). Brick by brick: The origins, development, and future of selfdetermination theory. Advances in Motivation Science, 7, 111–156. https://doi.org/10.1016/bs.adms.2020.06.001
Sari, I., & Santoso, A. (2024). Perceived AI fairness and organizational commitment: The mediating role of psychological safety. Future of Work and Digital Management Journal, 2(4), 44–54. https://doi.org/10.61838/fwdmj.2.4.5
Sawhney, N., & Michel, A. (2022). Algorithmic control and employee withdrawal behavior. International Journal of Human Resource Management, 33(10), 2150–2174.
Seligman, M. E. P. (2011). Flourish: A visionary new understanding of happiness and wellbeing. Free Press.
Shneiderman, B. (2020). Human centered AI: Reliable, safe & trustworthy. International Journal of Human–Computer Interaction, 36(6), 495–504. https://doi.org/10.1080/10447318.2020.1741118
Tambe, P., Cappelli, P., & Yakubovich, V. (2019). Artificial intelligence in human resources management: Challenges and a path forward. California Management Review, 61(4), 15–42. https://doi.org/10.1177/0008125619867910
Tarafdar, M., Cooper, C. L., & Stich, J. F. (2019). The technostress trifecta—techno eustress, techno distress and design: Theoretical directions and an agenda for research. Information Systems Journal, 29(1), 6–42. https://doi.org/10.1111/isj.12169
Veen, A., Barratt, T., & Goods, C. (2020). Platform labour and algorithmic management: The case of Uber drivers. New Technology, Work and Employment, 35(1), 80–93. https://doi.org/10.1111/ntwe.12130
Wood, A., Russell, H., & Maitre, B. (2019). Technological change and workplace wellbeing. Work, Employment and Society, 33(4), 611–629. https://doi.org/10.1177/0950017018803317
Zuboff, S. (2019). The age of surveillance capitalism: The fight for a human future at the new frontier of power. PublicAffairs.
