Company: VelocityTech (fictitious), a mid-sized software product company with 800 employees, building enterprise solutions across supply chain, logistics and workforce management.
Background
For almost a year, Karan Nair had been doing something his team knew nothing about.
Karan, a senior engineering manager at VelocityTech, was well-liked and widely regarded as approachable. People confided in him. They spoke about workload, frustrations with leadership and personal pressures affecting their performance. They trusted him because he listened.
What they did not know was that Karan regularly passed those conversations to Meera Pillai, the CHRO. Not through formal reports, but in informal messages and occasional coffee conversations. He described it as culture health monitoring. Meera found it valuable. It gave her visibility into employee sentiment that engagement surveys and formal feedback channels rarely captured.
No policy prohibited it. No rule had been broken.
Then, three months ago, one of Karan’s team members noticed something.
During a performance discussion, Meera referred to a concern the employee had previously shared with Karan in what she believed was a private conversation. She did not confront either of them immediately. Instead, she mentioned it to a colleague. Within two weeks, the story had spread across three floors.
The team’s reaction was not anger. It was something quieter and far harder to repair: the complete withdrawal of trust.
Employees stopped sharing concerns with their managers. Attendance at HR connect sessions fell sharply. Two employees resigned, citing only “cultural concerns”. When HR tried to understand what had changed, nobody wanted to talk.
The decision now sits with Meera.
The dilemma
Should HR publicly acknowledge the breach of trust, accept its share of responsibility for benefiting from the arrangement, and commit to clear ethical boundaries around how employee sentiment is gathered in future?
Or should HR defend the practice as legitimate culture sensing, arguing that understanding informal employee sentiment is part of leadership’s responsibility and that no formal rule was ever violated?
And if neither feels entirely right, is there a third path: distance HR from Karan’s actions without fully acknowledging the organisation’s own role in creating and sustaining the arrangement?
What’s really at stake
This is a question about what psychological safety actually means inside an organisation, not as a value printed on a wall, but as a lived experience.
Employees at VelocityTech did not stop trusting Karan because a policy had been violated.
They stopped trusting him because the unwritten contract behind a private conversation had been broken. They spoke openly because they believed those conversations would remain confidential. That belief turned out to be wrong.
The damage is not confined to Karan. It extends to every manager, every HR interaction and every future conversation in which an employee must decide whether to speak honestly or stay silent. Psychological safety, once damaged at this scale, cannot be rebuilt through an email from the CHRO or a town hall commitment to openness.
There is also an accountability problem that HR cannot avoid. Meera knew where the information was coming from. She found it useful. She never asked Karan to stop. Any action taken against him will ring hollow unless the organisation also acknowledges that its most senior HR leader knowingly benefited from the arrangement.
The argument for defending the practice is not without logic. Organisations genuinely need to understand what employees are thinking, and formal channels often produce carefully managed responses. The informal intelligence Karan provided may have surfaced issues that would otherwise have remained hidden. But the method poisons the outcome. Intelligence gathered by betraying confidence is not organisational insight. It is surveillance with a friendly face.
The deeper question is harder to avoid: if employees can no longer trust that a private conversation will remain private, what exactly is psychological safety protecting?
We asked three HR leaders how they would approach this dilemma
What HR leaders said
Sanjeeb Lahiri, CHRO, GRP
“My first instinct is to separate two very different situations. If a manager shares employee concerns with the CHRO in confidence, and the information is used only to identify organisational issues without exposing identities or causing harm to those who spoke up, it can in certain circumstances be acceptable. HR’s responsibility is to address genuine organisational concerns while protecting the confidentiality of employees. If identities remain safeguarded and the information is acted upon responsibly, it may help resolve issues that would otherwise never surface.
The situation changes entirely if those conversations become a chain of disclosures where identities or specific comments are circulated, intentionally or otherwise. At that point, the organisation has crossed a line. Confidentiality has been compromised, trust has been violated, and decisive action becomes essential. An apology alone would not be proportionate to the damage. If an organisation truly values integrity, privacy and trust, it must respond firmly enough to demonstrate that such conduct is unacceptable.
What concerns me most is that the damage extends far beyond HR. When employees believe leadership has allowed such practices to continue, trust in the entire leadership team begins to erode. Employees stop asking whether HR can be trusted. They start wondering whether anyone in the organisation can.
Personally, I do not support culture sensing through covert channels. Employees often share sensitive information with HR because they believe they are in a safe space. Even when HR possesses critical information, it must act with adequate safeguards that protect the identity of those who came forward. If confidentiality cannot be preserved, employees will simply stop speaking.
If I were leading such a situation, I would take the strongest action available against anyone, whether an HR team member or a manager, who breached that trust. Just as importantly, I would communicate publicly that the organisation does not tolerate such behaviour.
Employees need to know not only that action has been taken, but also what values the organisation stands for.”
Rajeev Singh, CHRO, Yokohama ATG
“Psychological safety is one of the foundations of employee engagement, productivity and long-term organisational success. It cannot be compromised, directly or indirectly. HR and leadership have a shared responsibility to ensure that nothing they do creates an environment where employees feel psychologically unsafe.
The real issue in this case is not whether HR should understand employee sentiment. It absolutely should. The problem is the method. Gathering information under the pretext of confidential conversations inevitably damages trust. Once employees discover that private discussions were quietly feeding leadership, confidence in both HR and the organisation begins to disappear.
People often approach HR only after they have exhausted every other avenue. At that point, HR’s role is to balance employee concerns with organisational realities, not to function as an intelligence-gathering mechanism. I cannot support an HR function that operates through hidden channels or informal surveillance, regardless of the intention behind it.
Organisations need mechanisms to understand employee sentiment, but those mechanisms must be transparent and ethical. There are many legitimate ways to achieve this: employee connect programmes, town halls, fireside chats, engagement surveys, pulse surveys and one-on-one conversations. These channels allow organisations to gather meaningful insights without compromising trust.
I recognise that informal networks exist in every organisation and information naturally travels through relationships. However, there is a clear distinction between informal organisational dynamics and HR actively creating or endorsing such arrangements. HR should never legitimise or institutionalise covert information gathering under the guise of culture monitoring.”
Sriharsha Achar, Senior HR Leader
“The central issue here is not whether the manager violated a policy. It is whether he violated trust.
The most valuable source of organisational intelligence is trust, not surveillance. HR has every right to understand how employees feel, but there is a clear distinction between listening for patterns and reporting private confidences. When employees believe a conversation is confidential and later discover it has been quietly relayed to leadership, psychological safety becomes performative rather than genuine.
If HR knowingly benefited from such an arrangement, simply distancing itself from the manager is insufficient. It must acknowledge that the approach itself was wrong, even if the intention behind it was to strengthen the organisation. Credibility is restored only when accountability is shared.
Culture cannot be built on covert intelligence gathering. Once employees lose confidence that their conversations will remain private, they stop speaking openly. Ironically, the organisation then loses access to the very insights it was trying to obtain.
HR should publicly acknowledge the breach of trust, accept its share of responsibility, and establish clear ethical boundaries around how employee sentiment is gathered going forward.”
If you were the CHRO at VelocityTech
Meera is you.
You benefited from the arrangement.
Employees now know.
Do you:
- Publicly acknowledge HR’s role, take formal action against Karan and establish transparent, ethical ways of gathering employee sentiment?
- Treat this as an individual breach, strengthen the guidelines and move on?
- Defend the practice as legitimate culture sensing because no policy was violated?
Or is the deeper question this:
If employees no longer believe private conversations are private, can an organisation still claim to offer psychological safety?
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