How to identify and manage toxic employees

toxic employees


written on March 10, 2017

We all know the classic types of toxic employees. The gossipmonger, the manipulator, and don’t forget the loudmouth, who takes credit for everybody else’s labours and somehow ends up in management.

These are some of the stereotypes of toxic employees into which we try to sort the people who make the daily grind a true ‘grind’. But really, a stereotype is all it is, says Mark Shaw, CEO of Neos HR. For almost three decades he’s worked with organisations to solve their people problems.

“I would argue that you shouldn’t try and put these people into boxes,” Shaw says. “Instead I would argue strongly that the toxic employees are predominantly people who are not engaged. That might be because of a specific management problem, or it might be simply because management has not perceived what is happening as a management problem.”

Shaw gives an example of a staff member whose behaviour has gone sharply downhill and who has also regularly been absent from work. As a result, his department is suffering all types of problems and discussions begin about how to remove him from the business. After managers finally talk through the issues with the individual, they discover his father has cancer and is dying.

“Is that a toxic employee? I have to say no,” Shaw says. “But was he a bad apple at the time because he was causing a major management problem? Yes.”

Identifying toxic employees

Why is it so difficult for organisations to identify the problem people? Bernie Althofer, managing director of EGL I Assessments, says people who cause such problems are only allowed to roam free because of a particular type of organisational culture.

“Really good organisations encourage people to work together,” he says. “They have a good blend of diversity and a strong health and safety culture. They have an openness and transparency where they allow people to raise issues without being criticised. They deal with minor complaints promptly and they have an underpinning belief in respect and dignity.”

David Arkell, HR leader at GE, describes his own organisation as one that has just such a culture. This allows the business to see a clear difference between people with serious compliance and integrity issues – and those who are simply struggling to fit in.

“Anybody can raise a concern confidentially about anything at a global level,” says Arkell. “That gets fed back down through the organisation for investigation, and we investigate everything. We don’t do any triaging of issues. If an employee raises a concern about another employee over a compliance issue, we will investigate. If an employee raises a concern about their manager in the organisation and their potentially inappropriate behaviour, bullying, harassment etc, we have a very transparent and open process, much more so than I’ve seen in many other organisations.”

Shaw likes to draw an analogy with dentistry when considering toxic employees in a company.

“When a patient is suffering tooth pain, the goal is to fix the pain, not remove the tooth.” Only in those rare circumstances where a fix isn’t possible is a tooth removed, he says.

What can counterproductive behaviour cost the business?

A toxic employee costs the business at least the equivalent of the individual’s salary – and likely more, Shaw says. In order to explain, he uses the example of a badly behaved accounts payable person being paid $50,000 annually.

“As this individual is not highly paid, you might consider that their behaviour is less of a problem,” Shaw says. “But if you have someone in that role who is toxic, who gossips and bullies and so on, then firstly, everybody wants to avoid them, but they can’t get their accounts paid if they avoid them permanently; secondly, they’re spending a large portion of their time running around being a nuisance, so are not really doing their job; and finally, their manager, who is on $200,000, is spending 20 per cent of their own time – often more – trying to solve the problem.”

Other costs that are more difficult to measure include lowered productivity, higher employee turnover, increased absenteeism and presenteeism, adverse publicity and loss of employer brand (leading to attraction and retention issues), workplace accidents and security issues.

What to do with toxic employees

A full investigation to understand precisely what is going on, with all parties interviewed, should be carried out prior to action being taken. Such an investigation can have complicated outcomes. For instance, often the root cause may be outside the control of the person’s manager, Althofer says. In these cases, managers must report up the line until those with responsibility for the specific hazard are made aware of the issue and are compelled to act.

(For a more thorough explainer of workplace investigations, read our guide.)

The commitment of top management is essential in solving behavioural issues in the workplace and ensuring they do not become regular occurrences, Shaw says.

“Once you have correctly identified a bad apple by their behaviour, start identifying and articulating the management problem,” Shaw says. “Once you do that, the pain is in the past. Then it’s simple – your goal is to turn the employee’s behaviour around and if you can’t, then you terminate.”

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6 thoughts on “How to identify and manage toxic employees

  1. Toxic workplaces are always a top-down phenomena. Workplace bullying and harassment are serious enterprise, performance, health, and safety issues that impact the bottom line. Unfortunately, the standard hierarchical management paradigm allows too many abusers to infect and negatively impact the workplace by not taking action against these behaviors. In fact, most often it is the targets of abuse who lose their jobs and livelihoods because top level managers do not take responsibility. Many of these targets are whistle blowers or critics of management practices. Toxic workplaces are a form of corruption where authority is abused and the net impact is diminished returns for the enterprise. Internal compliance and governance is also corrupted and the HR function misused to damage the careers of targets and protect abusers. This is because top management controls HR and Compliance. There needs to be 3rd party ombudsmen or professional groups who monitor fair processes because by definition corrupt organizations cannot. The hierarchical paradigm of concentrated authoritative power as well as oversight is simply the fox in charge of the hen house; it will always fail.

  2. Steven, Thank you for reading the article and contributing to this important topic. As someone interviewed for this article, I’d like to comment on the range of issues you raised. In my experience
    1. Toxic workplaces are not always a top down phenomena; they are regularly caused by individual employees. My contribution to the article was to say how we can better manage such individuals (including toxic managers) by shifting to a problem solving model.
    2. I agree too many abusers infect and negatively impact the workplace. That’s why I presented a more successful way to solve the problems they cause.
    3. While I endorse whistle blowers, many individual toxic employees are not.
    4. While the appointment of an ombudsman may be a solution to the ‘hierarchical paradigm of concentrated authoritative power’, my argument is management need to have improved systems, followed by the correct training and support to overcome the problems you suggest.

    Again, thanks for contributing

  3. I agree with Mark that the correct training and support are needed. We provide that to many employees who are referred to us for behavioral change after investigations..

    I’m concerned however that the original article mentions the word ‘terminate’ before any discussion of the impact of undiagnosed mental health issues may have on behaviour. As a long term EAP provider, we encourage all managers to take mental health issues of all staff (including those who may appear ‘toxic’) into account.

    Frequently those referred to us, as EAP providers, for behaviour change need support for brief or long term mental health issues such as sleep problems, anxiety or depression. These are treatable issues and once support is in place changes in behaviour frequently follow.

  4. Dorothy I am clarifying yoru comment “I’m concerned however that the original article mentions the word ‘terminate’ before any discussion of the impact of undiagnosed mental health issues may have on behaviour.”
    If you are referring to my statement that “Then it’s simple – your goal is to turn the employee’s behaviour around and if you can’t, then you terminate” allow me to clarrify. As per the example in the article, by following process I recommend, if the employee’s behaviour is due to mental health issues, then yes that needs to be addressed first before termination. No question. I have had that exact esxperience.
    I reiterate, the approach I recommend to ensure ‘reasonable management action occurs in a reasonable way’ is to focus on the managemnent problem casused by the employee’s behaviour. Hope that helps.

  5. Mark, Steven and Dorothy

    The issue of toxicity and toxic employees has been and will no doubt continue to be discussed in various forums. Invariably it seems that the impact of toxicity and toxic employees has a physical, psychological and financial impact on individuals and organisations as attempts are made to identify and treat causes and symptoms.

    Contributors to discussions bring a wealth of knowledge and practical experience garnered from years of working with people and organisations where the focus may not have been on toxicity or toxic employees, but more from the aspect of facilitating processes that ensure not only the development of systems and processes but also the effective implementation of those systems and processes. From time to time, unwritten ground rules may have a direct impact on how those systems and processes actually work.

    In the rapidly changing workplace, managers and workers at all levels are contending with:
    Fraud, corruption, anti-bribery and governance requirements/obligations
    Digital age – remote access
    Paperless workplace
    Collaborative networks – whole of community
    Political, environmental and religious ‘activism’
    Power to workers – ageing population
    Impact of ageing population (baby boomers) Generation Y – Generation Z
    Changes in retirement age
    Changing roles and expectations regarding service delivery
    Role of volunteerism
    Emergence of leader versus manager
    Leader/follower relationships
    Culture and sub-culture
    Working from home – health and safety implications

    In some organisations, a fertile ground where the following exist, the growth of toxicity and toxic workplaces may occur unless controls are implemented to reduce the risks involved:

    Poor people management practices and skills
    Inappropriate management style or lack of supervision
    Role ambiguity
    Poor consultation processes
    Inconsistent work flows reporting procedures
    Level and nature of training in inadequate
    Unreasonable performance expectations
    High levels of job dissatisfaction

    For individuals, they may ‘live’ in what might be termed a ‘discontent breeding ground’ where they perceive that personal concerns give cause to complaint:

    Job/role description
    Time management
    Lack of support from co-workers
    External pressures
    Generational gaps
    Office politics

    Effective and meaningful risk assessments that identity the impact of hazards/ and risk factors such as:

    Negative leadership styles Includes autocratic styles and styles that are too relaxed with inadequate supervision and feedback.
    Organisational change
    Workplace relationships
    Organisational/ workplace culture
    Human resources systems
    Inappropriate systems of work
    Workforce characteristics

    If a proactive and preventive approach is to be taken in relation to potential workplace toxicity and toxic employees, it is important to ensure that the three areas identified are addressed. In particular, it is important to note that not everyone is going to be accepting or willing to accept workplace changes in their totality, nor will they accept the systems or processes designed to assist an organisation. In some cases, these individuals will develop personal strategies or approaches designed to destablise their immediate workplace and their co-workers. Managers at all levels need to understand their role in managing and leading people. Being in denial that problems will not arise or that someone else can deal with them is not an option. Being paid as a manager brings specific responsibilities.

    Unfortunately, the way that some managers have not been involved in managing people has meant that the organisation has to engage in long and expensive reactive processes. In some cases, it may be necessary to terminate the employment of an individual because of their toxic behaviours. However, given the legal issues that could be involved, the processes may be drawn out or even ‘damaged’ because someone somewhere in the organisation did not take action to address the behaviour.

    Remember – leadership is like pornography
    You can’t describe it; You can’t define it; But you know it when you see it

    In the words of Warren Bennis (1997:8) “Managing people is like herding cats”

  6. The root of truly toxic behaviour is personality disorder usually psychopathy. The hierarchical structure you find in businesses also in politics and government are designed to benefit the psychopaths. They are their ladders to climb trampling on the pawns patrons and patsies and mobilising all three against the policemen the whistleblowers. How people work within and between organizations is not so hierarchical. I am unaware of research on these dynamics at work. In a small community psychopaths who typically don’t contribute (all those I see in business don’t) and prey on that community often find themselves leaving expelled or killed. Self awareness is the key with the status quo and recruiting other policemen when they triangulate a “subject”

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