Toxic workers drag us down, so why do we promote them?

SAY you’re looking for a new deputy, and you know a guy named John.

John has a great track record for delivering projects ahead of schedule, within budgets, and to a high standard. He says intelligent things in boardrooms, which are completely aligned with your vision.

Sure, his colleagues say he has a ‘certain reputation’. For some reason, they say this in hushed tones, with the frantic eyes and studiously blank features of victims in a hostage situation. But they don’t elaborate, and you never probe. You can’t make omelettes without cracking a few eggs, right?

What no one dares to tell you about John, is that his track record comes with serious casualties. To deliver ahead of time, he works his team to the bone. To stay within budget, he cuts corners. To ensure excellence, he crushes the self-esteem of his direct reports by berating them for the smallest things. To appear intelligent in front of you, he parrots your positions while subtly undermining anyone with a different view.

You really should know all this about John, but you don’t. So he becomes your right-hand man, and you entrust your teams to him. Over the next year, you pat yourself on the back as John brings home the bacon. You wonder why turnover in your departments has nearly doubled in that time – but it’s a hot market for jobs, you figure. Your office is too far away from the staff’s common areas to hear the interns sobbing in the toilets.

Visible gain, hidden price

Toxic employees come with a price tag. A 2015 Harvard Business School (HBS) study, based on data of over 50,000 workers terminated for toxic behaviour across 11 US firms, has estimated that cost at around US$12,500 a year. That refers only to direct turnover costs, from replacing employees lost due to the presence of a toxic worker on the team. It does not include secondary turnover costs, like lost productivity from the need to train replacements.

There are other costs not captured, like low morale and, in extreme cases, regulatory and litigation risks. There is also the more insidious damage done when such employees, left to roam, infect others with their toxicity. Their ability to do so depends on how much social and positional power they have, and how much they interact with others.

In unhealthy work environments, even positive and motivated employees find themselves dragged into a culture of politics and drama. They may begin to exhibit toxic qualities themselves, as a survival mechanism.

A 2017 study by the University of Manchester’s Business School found that among 1,200 employees studied, those who reported higher levels of narcissism and psychopathy in their bosses were more likely to redirect their frustrations at the organisation and co-workers — by engaging in counterproductive work behaviours and bullying.

In other words, toxic employees don’t just behave badly; they make everything and everyone around them worse.

So why do we still keep some of them around, and promote them to boot?

The 2015 HBS study contains an important clue: On average, toxic workers are more productive ones. This is striking, considering the workers in their dataset – by virtue of actually having been terminated for their toxic behaviours – were ones who engaged in more extreme and obviously unproductive behaviour, from stealing to sexual harassment.

This could well explain how toxic workers are hired and remain in an organisation, despite their flaws. They might present themselves more confidently, and show more impressive results than their peers. Being clever can help them mask their faults more convincingly, for longer. That can lead managers to miss the warning signs – or worse, to wilfully ignore them.

It’s a no-brainer to exit employees who are damaging the workplace, if they are poor performers. But the more competent and experienced they are, the tougher the conundrum. The most difficult sort of employee is not the incompetent jerk, but the accomplished one.

More power, more damage

One year on, your HR chief gingerly knocks on the door. You are informed that the mounting pile of notes from exit interviews is now a Red Sea of flags. John is alleged to be a crafty, domineering bully. He badmouths his subordinates and peers. He ostracises anyone who doesn’t fall in line. Your Glassdoor ratings are in the pits.

You are in a dire bind. Since taking charge, John’s teams have consistently smashed new records in production and sales. This has allowed the company to dispense benefits and bonuses that are more generous, even amid an increasingly tough economic environment.

Making matters worse, there are no viable successors to replace John if he leaves. You used to have a handful of high-potential candidates; but for some reason, none of them have stuck around. You’d like to think John hasn’t actively engineered his irreplaceability, but you don’t know what to think any more. 

What do you do?

The situation is bleak, but not irreparable. Act promptly to investigate the claims. Put a stop to any misbehaviour. Policies on how employees are treated in the workplace should be strengthened and cascaded. Check on the well-being of those whom his actions have affected.

Have a candid talk with John, where he has the chance to respond to allegations. Depending on the severity of his actions, options range from counselling and coaching; to formal warnings, career and wage penalties; and suspension or termination. Actions taken, and the reasons why, should be transparent to your staff.

If this sounds painful, that’s because it is. It’s wiser to avoid ending up in that situation in the first place, by vetting your promotees carefully. Get things right upstream by sourcing for 360-degree feedback. Beyond individual cases, embed positive leadership traits in your organisation-wide criteria for assessing performance and potential for promotions.

Remember: The higher toxic employees rise, the more their powers expand. In the leadership ranks, many livelihoods depend on their decisions. They have greater sway over working conditions and culture. And since they are in powerful positions, they set an example for what it takes to succeed. Both your current employees, and potential hires, are taking notes.

The longer you wait to do something about the competent jerk in the room, the more difficult and costly it becomes. Therefore, bite the bullet now. In the end, the world will know the price tag on your organisation’s values, by the size of the salary you are unwilling to stop paying.