How Toxic Workers Impact Results

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Having a positive work culture can have a big impact on employee well-being and motivation, company productivity, and even overall expenses. While there has been a strong focus in past research on discovering and developing top performers in the workplace, less attention has been paid to the question of how to manage those workers on the opposite side of the spectrum: those who are harmful to organizational performance.

According to a Toxic Workers” study published by Harvard University, employees engaging in harmful behavior can severely undermine the business, even if they possess a high level of talent

Employees engaging in harmful behavior can severely undermine the business Click To Tweet.

Minor’s co-author, Michael Housman, a faculty member at Singularity University, was key to unlocking the data used in the analysis.  The result was anonymized personal data of almost 60,000 workers from 11 firms, about 70% of which were based in the United States. The positions were similar front-line, customer service jobs like sales or technical support in industries that included retail, financial services, and healthcare.

Consequences of Toxic Workers

Besides the fact that Toxic workers seem to induce others to be toxic data analysis in the paper shows that although toxic workers are quicker than the average worker, they are not necessarily more productive in a quality-adjusted sense. In the long run, these kinds of workers are not likely to improve overall organizational performance.

Finding Superstars vs. Avoiding Toxic Workers

While most organizations are focusing on hiring ‘superstars’ the research clearly shows that putting an end to such conduct and avoiding toxic workers can save as much revenue as employing high-performing workers. Professor Minor  says a company stands to lose $12,489 in costs from replacing one toxic worker, which is almost double the figure a company gains from hiring a “superstar.” A superstar in the top 1% of performers adds $5,303 in increased performance to a company’s profit, Minor’s paper “Toxic Workers” shows.

The paper clearly shows that “avoiding a toxic worker (or converting them to an average worker) provides more benefit than finding and retaining a superstar. Assuming that it is no more costly to avoid a toxic worker (or replace them with an average worker) than it is to find, hire, and retain a superstar,it is also more profitable to do the former over the latter.”

Considerations for HR Managers

The data reveals three traits that indicate which would-be hire needs a warning label. Human resources managers should be alert to signs an applicant is overconfident in their abilities, who are self-regarding, and who claim rules should be followed, are more likely to become toxic workers and break the company and legal rules, Minor says. Workers are flagged as self-regarding through a series of nuanced questions to determine how much they value others. “If you’re selfish, you’re more likely to steal and bully,” Minor says.

However, the paper has also found that toxic workers are more productive, at least in terms of the quantity of output. This could explain why toxic workers are selected and are able to remain in an organization for as long as they do. For example, an investment bank with a rogue trader who is making the firm millions in profits might be tempted to look the other way when the trader is found to be overstepping the legal boundaries. In fact, Pierce and Snyder (2013) found that unethical workers enjoy longer tenures.  This performance finding suggests that toxic workers are similar to what Jack Welch described as “Type 4” workers those who deliver on the numbers but do not have the right values. As the legendary GE CEO put it: “People are removed for having the wrong values… we don’t even talk about the numbers.”

People are removed for having the wrong values... we don't even talk about the numbers - Jack Welch Click To Tweet

And when it comes to hiring superstars vs removing toxic workers, data proves in the paper that the authors “found some evidence that a toxic worker can have more impacts on an organization might improve everyone’s outcome to a greater extent than only focusing on increasing positive impacts.”

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