How Can We Fix Toxic Work Cultures?

Toxic work cultures drain employees’ energy, turning them into depressed, angry and unhappy people. Toxic work culture traits usually include exclusion, incivility, harassment, insecurity, long working hours, and authoritarianism which creates fear, anxiety and stress among employees.

And studies have shown that toxic work cultures are the prime reason for the “Great Resignation.”

Examples of hostile behavior in the workplace considered by the researchers included use of inappropriate language, sexual harassment, outbursts, humiliation and misuse of power.

Researchers uncovered a significant association between abusive leader behavior and abusive behavior from co-workers. Of the 323 people involved in the study, 68% who had experienced hostile behavior from a leader had also witnessed interpersonal aggression from the general workforce.

The results indicate that mistreatment by an immediate boss can encourage peers to engage in similar unethical behaviors, leading to employees feeling emotionally exhausted, which ultimately results in job insecurity concerns.

The study also reported an association between experiencing hostile behavior from leaders and emotional exhaustion and job insecurity, suggesting that mistreatment from peers can damage employees’ confidence in their job and their role within an organization.

The authors begin their article by stating, “More than 40% of all employees were thinking about leaving their jobs at the beginning of 2021, and as the year went on, workers quit in unprecedented numbers. Between April and September 2021, more than 24 million American employees left their jobs, a record. As the Great Resignation rolls on, business leaders are struggling to make sense of the factors driving the mass exodus. More importantly, they are looking for ways to hold on to valued employees.”

Based on the data, they concluded that “ Much of the media discussion about the Great Resignation has focused on employee dissatisfaction with wages. How frequently and positively employees mentioned compensation, however, ranks 16th among all topics in terms of predicting employee turnover. This result is consistent with a large body of evidence that pay has only a moderate impact on employee turnover.” Further, they say “A toxic corporate culture, for example, is 10.4 times more powerful than compensation in predicting a company’s attrition rate compared with its industry.”

They argue in the article “More than 90% of North American CEOs and CFOs believe that improving their corporate culture would boost financial performance. Most of these executives ranked a healthy culture as one of the top three among all factors — including strategy, innovation, brand, patents, and others — in terms of its impact on results. More than 80% also acknowledged that their organization’s culture was not as healthy as it should be.

If leaders view culture as crucial and needing improvement, you might expect them to focus on improving it. Surprisingly, among executives who said their culture wasn’t working as well as it could, nearly all agreed that leadership failed to invest enough time in upgrading corporate culture. Lack of leadership investment was, by far, the most important obstacle to closing the gap between cultural aspirations and current reality.”

They say “In an earlier study, we analyzed 128 topics that employees discussed in Glassdoor reviews, to identify those that best predicted extremely negative reviews. Our analysis identified five attributes of culture — disrespectful, noninclusive, unethical, cutthroat, and abusive — that rendered a culture toxic in the eyes of employees.”

The authors contend “ Toxic workplaces are not only costly — but they are also common. Our research on large U.S. employers found that approximately 1 in 10 workers experience their workplace culture as toxic, an estimate that is in line with other studies. Even companies with healthy cultures overall typically contain pockets of toxicity, due to abusive managers or dysfunctional social norms among certain teams.”

They describe how, as part of their research they searched for references to “culture change in Amazon’s Business & Money section and came up with more than 10,000 books that offer conflicting advice, most of which were provided in the form of personal anecdotes rather than any kind of systematic research.

In their research, they examined existing research on “unhealthy corporate culture,” and identified 11 meta-analyses of toxic work cultures, including one which aggregated 140 separate studies on the drivers of unethical behavior. The result was to identify the three most powerful factors as predictors of toxic behavior in the workplace: toxic leadership, toxic social norms and poor work design.

Here are some illustrations from their studies:

Veldsman says that anecdotal and research evidence shows that one out of every five leaders is toxic, and he argues according to his research, that is closer to three out of every ten leaders. Veldsman describes toxic leadership as “ongoing, deliberate intentional actions by a leader to undermine the sense of dignity, self-worth and efficacy of an individual. This results in exploitative, destructive, devaluing and demeaning work experiences.” He goes on to say that a toxic organization is one that “erodes, disable and destroys the physiological, psychosocial and spiritual well-being of the people who work in it permanently and deliberately.

Leaders now are no longer seen as being role models or stewards of the common good, but rather as predatory plutocrats who profit disproportionately at the expense of the majority of the population. G. Petriglieri and J. Petriglieri argue that we have experienced a “dehumanization of leadership” in which leadership is reduced from a cultural enterprise to a strict intellectual or commercial one, and in which leadership “distances aspiring leaders from their followers and institutions, resulting in a disconnect their inner and outer worlds.”

Sutton argues such bosses and cultures drive good people out and claims bad bosses affect the bottom line through increased turnover, absenteeism, decreased commitment and performance. He says the time spent counselling or appeasing these people, consoling victimized employees, reorganizing departments or teams and arranging transfers produce significant hidden costs for the company. And he warns organizations this behavior is contagious. Research suggests not only that some bosses are jerks but that many of them are bosses because they are jerks.

Incivility also hijacks workplace focus. According to a survey of more than 4,500 doctors, nurses and other hospital personnel, 71 percent tied disruptive behavior, such as abusive, condescending or insulting personal conduct, to medical errors, and 27 percent tied such behavior to patient deaths.

Lipman-Blumen contends that even the media has difficulty resisting the seductive appeal of toxic leaders, citing examples from leading publications such as Time, BusinessWeek, Forbes and Fortune extolling the virtues of several failed narcissistic and toxic leaders.

Sull and Sull concluded that the best indicator of a toxic culture was leadership. No one will be surprised by the significance of leadership, but it does highlight a key reality: Without a willingness to hold themselves and their colleagues accountable for toxic behaviour, leaders cannot transform corporate culture.

Sadly, toxic management also has a trickle-down effect. Employees are more likely to engage in accounting fraud and insider trading if a management team tolerates such behaviour.

The authors say that by dealing with managers who meet their financial goals but contribute to a poisonous culture, top executives can demonstrate their dedication to positive workplace culture. Unfortunately, it happens less frequently than one might think. They cite a study in which only 39% of managers who participated in a study of 16,000 managers indicated that leaders dealt quickly with workers who met their goals but compromised morally. Less than 1 in 5 managers in the same poll claimed that senior executives dealt with leaders who produced outcomes but did not work well with other teams.

The authors argue that by refraining from initially elevating toxic employees to senior roles, businesses can stop the issue in its tracks. Unfortunately, organizations frequently choose candidates for promotions based more on their effectiveness as individual contributors than on their capacity to foster a positive workplace culture. In recent research of sales reps and managers at 131 organizations in various industries, it was discovered that applicants who worked well with their coworkers were passed over in favour of “lone wolves” who did not share leads or sales credits. Uncooperative employees might become competitive subcultures that ultimately affect the business’s bottom line if they are promoted to management. Compared to teams managed by more collaborative managers, sales teams led by lone wolves generated 30% fewer sales.

What Kind of Workplaces do Gen Y and Gen Z Workers Want?

By 2025, members of Generation Z — those born between 1997 and 2021 — will make up 27 percent of the global workforce, predicts the Organization for Economic Co-operation and Development.

Economists predict that the Great Resignation is only getting started, especially for Gen Z and millennial workers who are well positioned to find new ways to earn income.

Younger workers won’t tolerate toxic workplaces and bosses the way that previous generations have. What kinds of workplaces do they want?

Perhaps, but consultants believe managers don’t want to be caught unprepared, as many were when the first millennials arrived in the workplace and challenged the status quo. Born in the 1980s and 1990s, millennials have proven to be a handful for many employers. They tend to feel more entitled than previous generations, demanding frequent feedback and praise, faster career advancement, and most of all, flexibility to balance their work and private lives.

Robert Chesnut is a Silicon Valley expert and the Chief Ethics Officer of Airbnb Inc., his new book, Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution, describes how today’s headlines are filled with stories of bad behavior by companies and leaders — sexual harassment, fraud, conflicts of interest, privacy violations, anti-competitive behavior, and more.

This is partly because consumers, employees, and the press are all more empowered now than ever; employees can share information instantly through apps like Slack, and if their company’s values don’t align with their values, they may walk out — or become the next whistleblower, and take a CEO down with them.

Companies that don’t see the integrity revolution coming are going to be vulnerable, but companies that know the revolution is here are poised to make integrity a superpower that can energize their employees, inspire their customers, and earn the respect of partners, governments, and the world at large.

Chesnut argues that for much of the 20th century, companies were focused on profit, revenue, and driving shareholder value. Integrity has become compliance, simply something that you have to get through because it’s legally required. But those actions don’t inspire or motivate people, because they realize that those materials were produced by somebody else, for somebody else. Instead, corporate integrity is a muscle that companies must learn to exercise intentionally.

He goes on to say that to build integrity in a company, we just have to weed out the bad actors. Behavioral psychologists have demonstrated that when you place human beings in an environment where they have even a small incentive to lie, a large number of people, 70% or more, will fudge the truth for their benefit. On the other hand, if you are consistently reminded of your better self, if the people around you talk about doing what is right, and if leaders, in particular, are acting with integrity, then you are far more likely to act with integrity yourself.

Here are some more suggestions on how society in general and organizations specifically can emphasize to a greater degree guiding principles for moral, ethical and wise behavior, with a focus on leaders.

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