Uber was able to bounce back from the backlash, but many companies aren’t so fortunate.
A toxic workplace can destroy an organization by killing creativity, innovation, reputation and morale.
Companies can even suffer financially due to absenteeism, low productivity, high turnover and lost opportunities.
Key Identifiers of a Toxic Workplace
Cutthroat competition to get ahead
Organizations with cutthroat competition to get ahead are actually less productive because they experience significantly lower levels of employee engagement.
Statistically, companies with disengaged employees have 40% lower earnings per share, are 18% less productive and have 50% higher turnover.
On the other hand, companies with engaged employees outperform those without engaged employees by 202%!
A study by BMC found that cutthroat organizations spend 50% more on health care for their employees than other, less less stress-inducing organizations.
In fact, stress is so bad for your health that almost 80% of all workplace accidents and doctor visits are attributed to stress.
Instead of competing against each other, employees need to work as a team.
Gossip and secrets
Gossip and secrets have no place in a company.
A study by TINYpulse found that management transparency is the top factor for contributing to employee happiness.
Spreading gossip and keeping secrets will undoubtedly increase conflict between employees and negatively impact morale and productivity.
Every company should be transparent with its employees and customers, and everyone should be able to communicate openly and honestly.
A lack of inclusion and diversity
A recent Deloitte survey found that 80% of U.S. full-time employees think that inclusion is an important factor in choosing a company to work for, and 72% said they would leave a company for one that is more diverse and inclusive.
More research from Bersin by Deloitte found that employees tend to feel that they can be themselves, share problems, make mistakes, innovate and drive change in organizations with an inclusive company culture.
Inclusion and diversity may seem like soft issues, but these are what ultimately make a company successful.
When company leaders have unrealistic expectations of their employees, it’s been proven that productivity, performance and morale suffer.
This can cause employees to overwork and end up feeling exhausted and defeated when they still can’t measure up to their supervisor’s unrealistic expectations, which we already know causes health problems.
And according to new research from Stanford, productivity per hour declines sharply when the workweek goes over 50 hours, and productivity drops so much after 55 hours that it’s a complete waste.
If employees are overworked and under appreciated, they will seek another job that gives them what they deserve.
Public humiliation and criticism
A toxic company tolerates public humiliation and criticism, instead of promoting guidance and support.
Employees should feel safe and confident when sharing ideas, opinions, feedback and concerns.
Micromanaging is one of the tell-tale signs of a toxic company culture.
It completely destroys motivation and creativity and is guaranteed to drive good employees out the door.
Companies need employees who will do more than what they’re told, who will think for themselves and try new approaches, and all of that is ruined by micromanaging.
Unusually high turnover
A toxic culture is almost always the reason for an unusually high turnover rate.
In 2014, the average voluntary turnover rate was 11%. If your company’s rate was higher, you need to take a good look at your company’s culture and make some big changes.
Transforming a Toxic Workplace
Overcoming a toxic culture should not begin with a witch hunt for the people perpetuating the toxicity, but instead, as a collective effort by the entire organization, starting from the top down.
Re-think your mission statement
A study by Gallup found that emphasizing a concrete mission statement was one of the strongest factors for retaining employees.
A strong mission statement has the power to rally employees around a common cause, boost productivity and retain more customers.
Analyze your current mission statement and decide whether it really reflects your company values and if it’s specific enough to capture what your company is committed to.
Only 42% of U.S. employees actually know what their company stands for, and if your employees don’t know, your customers definitely don’t know.
Allocate time for brainstorming
A very top-down management can create a toxic environment if employees feel that their voices aren’t being heard.
Allow your employees to take time and come up with new, innovative ideas and reward them for it.
For example, the managers at General Electric are tasked with brainstorming three innovative business ideas to present to the company’s executives every year.
Talented employees are passionate, and providing opportunities for them to pursue their passions improves their productivity and job satisfaction
Implement a new hiring process
Trying out a new hiring process can help better identify toxic people before you hire them.
Research shows that employees are 54% more likely to quit when they have a toxic coworker.
Another survey showed that hiring just one toxic employee can cost a company approximately $12,800 in things like employee turnover and decreased productivity.
All of this can be avoided in the hiring process if you ask the right questions and dig a little deeper.
During an interview, try asking:
- What would you change about your previous job?
- What would your former employers say about you?
- What’s been your biggest professional success so far and how did you achieve it?
- Describe an instance when you had to manage stress at work. What did you do?
- Discuss a few times when you found it difficult to work with someone. How did you approach the situation?
Finding employees who are a good cultural fit is important to many companies like Zappos, for instance.
The online retailer carefully analyzes job applicants based on their company culture and even offers candidates $2,000 to quit if they feel they aren’t a good fit.
Establish a corporate social responsibility program
The University of Edinburgh defines corporate social responsibility (CSR) as the act of companies conducting their business in a way that is ethical, taking into account their social, economic and environmental impact, and consideration of human rights.
Corporate social responsibility can involve a variety of activities such as:
- Working with local communities
- Socially responsible investments (SRI)
- Developing relationships with employees and customers
- Environmental protection and sustainability
Companies that implement a CSR program can reap enormous rewards, proving that CSR is more of a business strategy than a philanthropic effort.
The 2016 Edelman Trust Barometer reported that employee advocacy increases with societal issue engagement.
In fact, 82% of employees at a company involved in a broader societal cause would recommend the company as an employer, compared to 57% of employees at a company not involved.
For example, the CSR program at Telus International focuses on raising funds for health, education and the environment, and has seen numerous benefits to the community and the company.
Since the start of the program, Telus has reported higher employee morale and lower turnover rates.
Hold employees accountable
Leaders need to hold employees accountable for their actions and let them know what won’t be tolerated.
In order for change to take place, it is imperative to document behavior and incidents and to provide counseling for inappropriate behavior.
And, eventually, firing the employee may be necessary to eliminate the toxic buildup.
Don’t rush it
Changing company culture takes time and patience.
Develop and implement programs over time instead of trying to change it all at once.
For small businesses, changes can take about a year to take effect; for larger companies, it can take up to five years.
Don’t expect immediate results and don’t get discouraged.
Change Always Starts at the Top
Unfortunately, most toxic company cultures are created at the top and trickle down to everyone else.
Once the leaders start demonstrating positive behavior and promoting a healthy company culture, the rest will follow.
The worst thing you could do when you’ve found yourself in a toxic workplace is nothing at all.
This quote by legendary basketball coach Don Meyer says it all: “Complacency is the forerunner of mediocrity. You can never work too hard on attitudes, effort and technique.”