This paper develops grounded theory on how receiving respect at work enables individuals to engage in positive identity transformation and the resulting personal and work-related outcomes. A company that employs inmates at a state prison to perform professional business-to-business marketing services provided a unique context for data collection. Our data indicate that inmates experienced respect in two distinct ways, generalized and particularized, which initiated an identity decoupling process that allowed them to distinguish between their inmate identity and their desired future selves and to construct transitional identities that facilitated positive change. The social context of the organization provided opportunities for personal and social identities to be claimed, respected, and granted, producing social validation and enabling individuals to feel secure in their transitional identities. We find that security in personal identities produces primarily performance-related outcomes, whereas security in the company identity produces primarily well-being-related outcomes. Further, these two types of security together foster an integration of seemingly incompatible identities—"identity holism"—as employees progress toward becoming their desired selves. Our work suggests that organizations can play a generative role in improving the lives of their members through respect-based processes.