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Source: Great-West Life Centre for Mental Health in the Workplace- Managing Mental Health Matters:
When we ask someone for their opinion or input and then tell them no, it may make them feel that their opinion never mattered to you anyway. Yet, it could be chaos if we simply said yes to every request made of us. There is a way to help meet needs without saying no. It involves an understanding that all requests or behaviours are actually an attempt to meet a need. Some needs are universal and include;
The challenge is that each person's satisfaction of these needs is different. For example, one person may have a strong need for autonomy. He or she may want you to give them a description of the outcomes you want and then be left to decide how to reach their objectives. Others find that this much latitude makes them feel insecure and would rather have very specific, step-by-step instructions on how each task should be carried out. Both are meeting needs, but they are doing it in different ways.
When an individual asks for something like the corner office with the window, rather than just telling them these are reserved for people with way more status than they have, you might ask them why they want the corner office. You may find that they have seasonal affective disorder (SAD) and require a minimum amount of sunlight to manage it. By not saying no, you are now able to find another way to help meet their underlying need such as the purchase of small full spectrum light box that would have the desired effect of keeping them healthier and productive.
Another example is when an individual says that they want to be transferred to another unit. If that is not something that is available (or even if it is) you may want to ask what they would change in their own unit if they could. Again, getting at the underlying need, rather than reacting to the request or simply saying no, allows further exploration of possible solutions. We often talk about the lack of value of moving people from unit to unit in an attempt to "solve" problems. If the problem was the individual's own coping strategies, it is very likely to resurface after a brief honeymoon period in the new unit. If the problem was the way the unit operates or interacts, it is very likely that it will show up with another individual when the first one is gone. In either case, the problem is not "solved"; it is just delayed or moved.
So...don't always say no, ask why and explore alternatives to help meet needs.