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.”

A research study conducted by the University of Manchester School of Business revealed that employees that work for toxic bosses have lower job satisfaction and scored higher on the scale of clinical depression. The boss’s mood determines the climate of the office environment, even if it’s a virtual one. His/her mood impacts the morale of every employee, which affects productivity. A study said stress from a toxic boss causes companies 105 million lost workdays and $300 billion annually.

A recent study revealed that 75% of workers surveyed said the most stressful aspect of their job is their boss.

A new study by Mio Li and colleagues published in Frontiers in Psychology has found that hostile behaviors from “abusive” bosses can lead to co-workers adopting similar behavior, leading to a toxic atmosphere of insecurity and exhaustion in the workplace.

The study, carried out by Anglia Ruskin University (ARU) in the UK as well as researchers in Pakistan, China and the United States, surveyed 323 employees about their experiences of abusive behavior from superiors and peers, and also their job security and level of emotional exhaustion.

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.

Toxic work cultures may be driving the “Great Resignation.” That’s the conclusion of researchers Donald Sull, Charles Sull and Ben Zweig, writing in MIT Sloan Management Review.

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.”

The researchers analyzed 34 million online employee profiles to identify U.S. workers who left their employer for any reason (including quitting, retiring, or being laid off) between April and September 2021. The data, from Revelio Labs, where Ben Zweig is the CEO, enabled the researchers to estimate company-level attrition rates for the Culture 500, a sample of large, mainly for-profit companies that together employ nearly one-quarter of the private-sector workforce in the United States.

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.”

Donald Sull and Charles Sull, writing in the MIT Sloan Management Review provide a detailed analysis of toxicity in the workplace and what to do about it.

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:

In my book, Eye of Storm: How Mindful Leaders Can Transform Chaotic Workplaces, I describe in detail the characteristics of toxic workplaces and the part that dysfunctional leaders play in creating them. Toxic workplaces can be characterized as follows:

• All sticks and no carrots. Management focuses solely on what employees are doing wrong or on correcting problems and rarely gives positive feedback for what is going right. Or mostly carrots for the best performers, sticks for the rest.
• The creeping bureaucracy. There are too many levels of approval and management to get things done and a singular focus on micromanaging employees.
• The gigantic bottom line. A singular focus on profits, beating the competition and cost-cutting without consideration of other bottom lines;
• Bullies rule the roost. Bullying of employees by management, or tolerated by management when it occurs among employees.
• Losing the human touch. People are considered to be objects or expenses rather than assets, and there is little concern for their happiness and/or well-being;
• High levels of stress, turnover, absenteeism and burnout.
• Instituting internal competition among employees reinforced by a performance assessment system that focuses on individual performance rather than team performance.
• Little or no concern for work-life balance, where a person or family life must be sacrificed for the job.
• Overwork or workaholism, is commonly evidenced by 50 hr+ workweeks, little or no vacation time and 24/7 availability for work communication.
• Little evidence of leaders’ compassion and empathy for employees;
• Little or no commitment to making contributions to the community, worthy causes or making the world a better place.

There has been a decline in civility in the workplace, including the growth of bullying. Christine Porath, Georgetown University business professor wrote a piece in The New York Times about the decline of civility in the workplace: “A quarter of those I surveyed in 2018 reported that they were treated rudely at work at least once a week.”

Repeated public opinion polls have voiced the concern of Americans over the erosion of civility in government, business, media and social media. The poll by Weber Shandwick reported that “65% of Americans say the lack of civility is a major problem that has worsened. What’s even more distressing is that nearly 50% of those surveyed said they were withdrawing from the basic tenants of democracy — government and politics — because of incivility and bullying.”

Theo Veldsman of the University of Johannesburg has published a study on the growth and impact of toxic leadership on organizations. He contends that “there is a growing incidence of toxic leadership in organizations across the world.”

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.

INSEAD business school Professors Gianpiero Petriglieri and Jennifer Petriglieri, authors of “Can Business Schools Humanize Leadership?” have coined the term “leadership industrial complex,” which they say promotes a view of leadership that is depersonalized and sanitized: “Over one decade of corporate scandals, financial meltdowns and growing inequality has consolidated a disconnect with business and political leaders, as it is in the protests in the streets and squares around the globe.”

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.”

Robert Sutton was one of the first leadership experts to draw attention to the prevalence of abusive bosses and how organizations should screen them out, as detailed in his book, The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t. He points out that tech firms, particularly those in Silicon Valley are where abusive leaders thrive. His article in the Harvard Business Review on the subject received an overwhelming response of affirmation. He says in business and sports it is assumed if you are a big winner, you can get away with being a jerk.

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.

An Interact/Harris Poll was conducted online with roughly 1,000 U.S. workers. In the survey, employees called out the kind of management offences that point to a striking lack of emotional intelligence among business leaders, including micromanaging, bullying, narcissism, indecisiveness, and more.

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.

Swedish researchers, led by Anna Nyberg at the Stress Institute in Stockholm, have published a study in the Journal of Occupational and Environmental Medicine on the issue of leaders’ behavior and employee health. They studied more than 3,100 men over 10 years in typical work settings. They found that employees who had managers who were incompetent, inconsiderate, secretive and uncommunicative, the employees were 60% more likely to suffer a heart attack or other life-threatening cardiac condition. By contrast, employees who worked with “good” leaders were 40% less likely to suffer heart problems.

According to a 2010 survey conducted by the Workplace Bullying Institute, 35% of the American workforce (or 53.5 million people) has directly experienced bullying–or “repeated mistreatment by one or more employees that takes the form of verbal abuse, threats, intimidation, humiliation or sabotage of work performance”–while an additional 15% said they have witnessed bullying at work. Approximately 72% of those bullies are bosses.

Jean Lipman-Blumen, in her book, The Allure of Toxic Leaders, describes how toxic leaders create “serious and enduring harm” to their followers, employees and their organizations. Recent polls of the American public show some of the lowest trust results in decades for elected members of Congress and business leaders. She identifies toxic leaders’ behaviors as follows:

• Leaving their followers worse off than when they found them by deliberately undermining, demeaning, seducing, marginalizing, intimidating, demoralizing, and terrorizing them;
• Consciously feeding their followers illusions that enhance the leader’s power and impair the followers’ capacity to act independently
• Playing to the basest fears and needs of the followers;
• Threatening or punishing those who fail to comply with the leader or question the leader’s actions;
• Misleading followers through deliberate lies;
• Blaming others for their mistakes or failures.

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.

What Can Be Done About It?

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.

According to the 2021 Gartner EVP Employee Survey, “82% of employees say it’s important for their organization to see them as a person, not just an employee.”

A new survey of 1,000 young adults from iCIMS, a talent acquisition software provider. The survey showed that members of Gen Z have some workplace desires that are drastically different from previous generations. In particular, five preferences stand out:

• 47 percent want to be provided mental health support at their workplace.
• 43 percent want to talk openly about mental health at the office.
• 41 percent want their company to be engaged in social causes the employee supports.

A report by Robert Walters, a London-based global recruitment firm, indicated that when it comes to Gen Z, 33% are looking for a workplace culture founded on purpose, 27% for strong social values, and a whopping 42% for mental health and wellness. If you have been talking to millennials and Gen-Z about their workplace, you will find that such issues come up frequently because they are passionate about them.

A research study by J.R. Graham et al. published in the Journal of Financial Economics reported that “Ninety-two percent of the 1,348 North American executives we surveyed believe that improving corporate culture would increase firm value. A striking 84% believe their company needs to improve its culture.” They argue that an organization’s culture that is based on values such as collaboration, community, and integrity is viewed more favorably by existing and potential employees.

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.

In my book Toxic Bosses, I propose guidelines for moral, ethical and wise leadership, which can address the problem of toxic workplaces and bosses:

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.

• Emphasize integrity in behaviors — demand it of ourselves and those who we work with and lead us.
• Stop recruiting overconfident, narcissistic and sociopathic/psychopathic people for leadership positions in our institutions and organizations, and opt instead for honest, humble and compassionate leaders.
• Recruit and promote more women into leadership positions. Research has shown that female leaders are less prone to corrupt and unethical behavior.
• Engage in a serious overhaul of the current capitalistic system which has a structure and practices that facilitate amoral and unethical behavior, and unwise decisions to the detriment of the populace and the planet. In particular, shareholder interests as the primary driver for business decisions must be abandoned. Encourage business organizations to complete a serious overhaul of their current ethical principles and policies.
• Encourage business schools to put more emphasis on the study of humanities including philosophy and ethics; provide more support for the humanities in post-secondary education rather than the current emphasis on technical knowledge and expertise in the business.
• Encourage business leaders (and their employees) to become more involved in worthy causes that benefit society and the planet that are not tied to economic or financial gain.
• Enact stronger laws, policies, regulations and procedures to protect whistle-blowers who witness or encounter unethical (or amoral) organizational practices.
• Emphasize the importance of developing self-awareness and emotional intelligence in leadership development programs and training.
• Encourage leader practices that promote exposure to various forms of ethnic and cultural (and gender) diversity.
• Encourage the public school system to include in both teacher training and curriculum the teaching of civics, moral and ethical behavior, critical thinking and Socratic dialogue.
• Encourage the public school system to initiate curriculum and practical experiences for students aimed at social good and environmental protection.
• Engage in “good conversations” about moral values, and ethical behavior.
• Exposure to the complexity of whole systems, rather than only discrete small parts or functional area.
• Study significant issues from an integrated perspective rather than a narrow perspective.
• Work collaboratively with others on significant problems or challenges that impact the welfare of all.
• Develop excellence in listening and perspective-taking.
• Work as a volunteer on an issue or project that benefits others, humanity and/or the planet without the need for recognition or compensation.
• Actively engage in the responsibilities of being a citizen in a democracy.
• Be an advocate for justice and fairness for all.