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Why your business can't afford toxic employees

Sharon Florentine | March 22, 2016
You simply can't tolerate the toll toxic employees take on your workplace. The problem is that the same qualities that make aggressive, nasty bullies can also make them good at their job.

Everyone's known a "toxic" colleague. Maybe someone who's bullied them, undercut their achievements, or committed fraud or theft. Worse still is when that person seems to get away with it -- maybe they're also smart, motivated, highly productive -- but at what is it costing your business? According to Harvard Business School's visiting assistant professor Dylan Minor and Cornerstone's Michael Housman, the cost to your organization's overall well-being is too high to tolerate a toxic worker.

While there's been a lot of focus on how organizations can find and develop "rock stars" and their overall impact on performance and productivity, much less has been said about how to deal with toxic workers.

Minor and Housman's working paper and their guest post on Google's re: Work blog break down the findings of their research into 60,000 workers across 11 firms in various industries, including communications, consumer services, financial services, healthcare, insurance and retail.

The cost of toxic workers

"We find that a superstar, defined as the top 1 [percent] of workers in terms of productivity, adds about $5,000 to firm profit per year, while a toxic worker costs about $12,000 per year. So the effect of keeping one toxic worker wipes out the gains of two superstars and then some. This suggests more broadly that 'bad' workers may actually have a stronger effect on the firm than 'good' workers," Minor and Housman write in the post. Their findings also point out that these toxic workers are many times much more productive than the average worker, which may explain why they tend to stick around an organization longer than they should.

Toxic employees are bullies, and they can have a hugely negative impact on your entire organization, according to Julie Moriarty, senior vice president of training and awareness at NAVEX Global, an ethics and compliance software company.

"Bullying has a hugely negative impact on an organization as a whole. Whether you're a direct victim or whether you're a witness, it's going to impact your ability to work in teams, it decreases productivity and it can affect businesses' ability to recruit and retain talent. A lot of the best employees come through referrals, and no one's going to refer their friends, family, colleagues to an abusive work environment," says Moriarty. In more extreme situations, she notes, this can create a PR nightmare for businesses, which also may be subjected to expensive, high-visibility lawsuits if victims choose to prosecute their attackers.

Benefitting from bullies?

What makes the situation even more complex is that some organizations are actually benefiting from bullying behavior, says Gary Namie, who along with his wife, Ruth, founded The Workplace Bullying Institute to provide resources and information about the issue. There's a fine line between being an aggressive, hard-driven, high-performing go-getter that's bringing in profits and closing deals and being a bully; particularly if a worker has used aggressive bullying tactics in the past and been rewarded for that behavior, Namie says.


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