New requirements for the psychosocial work environment: Why dialogue matters more than ever
Eirin Eriksen Horvei
October 14, 2026
Traditionally, leadership can be divided into task-oriented and people-oriented (Blake & Mouton, 1985). Modern leadership theories and best practice focus mainly on the people-oriented side. The field has moved from distance between leader and employee, through assembly-line management, to a greater focus on building a good relationship between leader and employee. We have gone from a focus on extrinsic motivational factors such as compensation to intrinsic motivational factors such as self-determination. People are not as easy to lead as they used to be, and power has also shifted from leaders to employees. Especially in the Scandinavian model, employees are allowed to influence their working day to a very large extent.
An increased focus on the people-oriented side also places different demands on leaders than before. A good leader today must be able to communicate and build relationships with their employees in order to succeed. They must be able to create arenas that are safe for employees to share mistakes, challenges and expectations. Trust must also be built between leader and employee, where the employee feels they are looked after in a professional way.
Good relational leadership has a positive effect on attendance and work effort. Poor quality in the relationship between leader and employee can have the opposite effect, and in some cases be harmful to health.
A central leadership theory within relational leadership is LMX (Leader-Member Exchange). The theory is based on social development theory and focuses on interaction and the exchange of benefits in the leader-employee relationship. The leader provides benefits in the form of interesting tasks, independence, participation in important decisions, attention to career development and so on, in exchange for the employee's high work effort over time, relieving the leader of tasks, and loyalty.
The basic idea is that a relationship between two parties develops through a communicative move by one party, and the other party's interpretation of and response to that move. There will be a series of exchanges or transactions in a relationship. The norm of reciprocity means that a positive move by one party makes the other party feel obliged to be positive in return.
From being strangers and unsure of each other, the parties get to know each other and clarify their roles in the relationship. This happens through continuous contact and exchanges between the parties. This is the first leadership theory to take seriously that leadership and employeeship are about mutual influence. “You get the boss you deserve” / “You get the employee you deserve”.
The aim is to achieve a “high-quality relationship” over time that stands stronger in the face of challenges. A number of studies document convincingly that high quality in the leader-employee relationship is associated with lower turnover, higher performance, greater engagement in the organisation, more interesting tasks, better morale, more attention and support from the leader, more participation from employees and faster career development.
In a number of quantitative research projects over the last 30 years prompted by LMX theory, the quality of the relationship between leader and employee has been found to be linked to, for example, job performance, job satisfaction, effort beyond role requirements, intention to stay in the job and low sickness absence (Nahrgang et al., 2007).
Photo: bernardbodo/Adobe Stock
It also turns out that it is possible to strengthen leaders' social competence, and that this has a positive impact on the working environment (Alan et al., 2023). Very few studies look at the effect of development measures among leaders, but the study by Alan and colleagues examined whether training leaders in social competence had an effect on the working environment. Their hypothesis was that training leaders in social competence would lead to more constructive and supportive dialogue between leaders and employees, and that this would spill over into dialogue between employees. The training consisted of five two-hour sessions, each with its own theme:
The aim of these sessions was to build trust and practise taking other people's experiences and feelings into account. 20 companies with 500 leaders and 2,500 employees took part in the experiment. The sample was divided into two groups, one of which received training while the other did not. The groups were measured before and after the training so that the researchers could measure the effect the training had on the working environment.
The results showed that the training led to lower turnover among employees; employees experienced more support from colleagues, made more prosocial choices, and experienced a higher degree of job satisfaction and a better psychosocial working environment.
The leaders who received the training were reported to be more supportive, more empathetic and better at giving constructive feedback compared with the control group.
This gives a clear indication that social training and raising awareness of the leader's role as a relationship builder have a positive effect on the working environment. Organisations can learn from this and invest in their leaders' social and relational competence to improve the working environment.
A good place to start building relationships between employee and leader is the employee appraisal. Does your organisation have a good enough method for this?
