The Psychology of Corporate Gaslighting

People always ask me, why I read outdated psychology books, with theories that have long been “debunked” as unscientific. One answer is, that I believe psychology is not a science (hope none of my professors read this…), second, because some of those unscientific theories explain a lot about why we work the way we work even centuries later. So let’s see how these apply to corporate today. Just for fun…

Let’s take one of these Reddit horror stories:

“HR and Executives Blaming Employees for Toxic Work Environment Instead of Themselves. Our company has been experiencing a toxic work environment for years. High turnover, low morale, constant complaints about management. Instead of addressing the root causes (unrealistic expectations, micromanagement, favouritism), HR sends out surveys blaming employees for ‘not adapting’ and ‘bringing negativity’. Executives claim it’s ‘personality clashes’ and fire dissenters. Now they’re hiring more yes-men. Does this happen elsewhere? How do you survive?”

This Reddit story isn’t just about bad management, it’s a textbook case of projective identification at an organizational level (Ogden, 1982). When leaders cannot handle their own failures, anxiety rises due to the misalignment between their image, which they see as perfect and infallible, and the reality of the situation. So they unconsciously split off these “bad” parts and project them onto employees, forcing the team to carry the blame. To this day, I cannot find theories that better describe these as those of Freud and Bion.

In this scenario, HR and executives function as a punitive Super-Ego (Freud, 1923). Instead of a supportive guide, they enforce rigid, impossible standards (“unrealistic expectations”) and punish anyone who falls short. The leaders and the HR here form an “organisational Super-Ego”, that refuses to accept imperfection. To maintain their self-image of “competence,” they project their own inadequacy onto the workforce. The result is that employees being labeled with moral judgments like “negative” or “non-adaptive”, effectively becoming the recipients of the leadership’s own repressed guilt. This creates a culture where the goal isn’t problem-solving, but moral purity. If you complain, you are “bad,” and must be expelled (fired) to cleanse the system.

I know what your question is at this point: “How is it, that there are companies run by such leaders?!” Shocking, right? Well, Wilfred Bion has a good explanation for that (I will write about that in another post). Now we’ll look at the group dynamics from his perspective. Bion (1961) would argue, that when a leadership team feels threatened by a harsh reality (high turnover or low morale), they often regress into what he called a Basic Assumption Group state, specifically Fight-Flight. First comes Flight: executives flee from the painful truth of their mismanagement by denying its existence, reducing systemic failures to trivialities like “personality clashes.” Then comes Fight: rather than tackling the actual problem, they attack the perceived threat. That threat being Bob, the one guy who had the nerve to speak up in a meeting. By firing dissenters and hiring “yes-men,” they are fighting more the reality-checkers than they are tackling the issue itself. This is Bion’s -K (Minus K) state in action: the organization actively attacks knowledge. They don’t want to know why people are leaving. All they want to do, is to destroy the evidence (in this case the complainers) to preserve their delusion of control. Keep in mind, -K state is not just “ignorance” or “not knowing.” It is an active hatred of knowledge. It is the dynamic where a person or group actively strips meaning away from facts to prevent understanding. So it can hardly be considered an organisational “oversight”.

And the worst part is, that the employee surveys are not really data collection, to get the pulse of the organisation, but as a ritualistic scapegoating process, where we only use the “complaints” to blame the employees as only “bringing negativity”. A classic defence mechanism against organisational anxiety. Through projective identification, leaders are essentially “dumping” their own feelings of incompetence straight into the workforce (Ogden, 1982). It’s a cute psychological trick, where by labelling the staff as “negative,” the leaders get to keep pretending they are “positive” and proactive. The staff, on the receiving end of this projection, often start internalising it, becoming demoralised and anxious, which, ironically, just seems to prove the leadership right. And as for hiring all those “yes-men”? That’s nothing more than an attempt to create a narcissistic mirror (Kohut, 1971). Leadership is looking for a workforce that reflects back a perfect, idealised image of themselves, completely cleansed of those “bad” energies, that we sometimes like to call reality.

So, how do you break the cycle? If you find yourself trapped in this dynamic, the first step is to realise that you are being used as a container for leadership’s anxiety. The toxicity isn’t about your “negativity”, it’s about their inability to process failure. Start with some serious reality testing, and hold onto your own reality tightly. Document the facts so you can distinguish between your actual performance and their projected blame. Next, do your best to refuse their projections. Do not internalise their label of being “negative.” Understand it for what it is: their symptom, not your personality trait. Finally, as most of the Reddit comments suggested, “Flight” might actually be the healthiest option in this situation. An organisation in a -K state (one that is actively attacking the truth) rarely heals without a complete leadership overhaul.

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References

Bion, W. R. (1961). Experiences in groups. Tavistock Publications.

Freud, S. (1961). The ego and the id. In J. Strachey (Ed. & Trans.), The standard edition of the complete psychological works of Sigmund Freud (Vol. 19, pp. 3–66). Hogarth Press. (Original work published 1923)

Kohut, H. (1971). The analysis of the self: A systematic approach to the psychoanalytic treatment of narcissistic personality disorders. International Universities Press.

Ogden, T. H. (1982). Projective identification and psychotherapeutic technique. Jason Aronson.