Why Companies Must Fear a Toxic Workplace

 In leadership, Leadership Development, leadership training, Leadership trust, leading a remote workforce, Rick Conlow, servant leadership qualities

Companies must fear a toxic workplace. In the battle for talent, a company’s dirty laundry gets exposed online: Indeed, Glassdoor, Comparably, The Better Business Bureau, Google, Trustpilot, Amazon, Facebook, and others. Job seekers use these sources, especially the younger generations. This information either creates demand for a company’s jobs or it is a warning sign.

Today, one in five employee battle toxic work environments, according to Wellable Study. However, employee disengagement tracks around 77% globally. This is an improvement since the pandemic. Yet, unfortunately, with over three out of four employees disengaged, companies neglect the issue. What does that tell you? There are more bad bosses and toxic work environments than we think. Not many make the headlines in the news. Check out these questions below, review the information, and learn how to create a high performance and positive work environment. Today you must be better only being non-toxic is not good enough.

Why Companies Must Fear a Toxic Workplace

What Causes a Toxic Workplace?

Here are the top eleven causes of a toxic workplace. Certainly, any combination of these can be lethal.

A Lack of Organizational Character

  • The company has confusing values.
  • Leaders lack integrity, honor, ethics, and character.
  • Disconnect between people focus and profit focus.

Poor Leadership

  • Authoritarian or abusive leaders.
  • Lack of communication and transparency.
  • Inconsistent or unfair decision-making.

Ineffective Communication

  • Lack of clear communication channels.
  • Poor feedback mechanisms.
  • Gossip and rumors.

Unhealthy Competition

  • Excessive competition among employees.
  • Unfair performance evaluation processes.
  • Lack of teamwork and collaboration.

Unclear Expectations

  • Lack of role clarity and job expectations.
  • Unrealistic workload and expectations.
  • Frequent changes in goals or priorities.

Discrimination and Harassment

  • Discrimination based on race, gender, or other factors.
  • Bullying and harassment in the workplace.
  • Lack of inclusion

Inadequate Work-Life Balance

  • Excessive workload and long working hours.
  • Lack of support for work-life balance.
  • Burnout and stress.

Lack of Recognition and Reward

  • Inadequate acknowledgment of employees’ contributions.
  • Unfair distribution of rewards and promotions.

Poor Organizational Culture

  • Negative or hostile culture.
  • Lack of values alignment.
  • Resistance to change.

Ineffective Conflict Resolution

  • Inability to address and resolve conflicts.
  • Favoritism in conflict resolution.

Inadequate Training and Development

  • Lack of opportunities for skill development.
  • Limited learning and training programs.
  • Failure to invest in employee growth.

Why Companies Must Fear a Toxic Workplace

What Companies are Known for Toxic Workplace Approaches and lower eNPS Scores?

While any company can have bad reviews. These seven companies have been in the news related to employee concerns about their workplace behaviors or policies. Click the company name for the link to their problems. Some or all the above behaviors and practices apparently showed up in these organizations.

  1. Uber
  2. Amazon
  3. Wells Fargo
  4. Tesla
  5. McDonald’s
  6. Boeing
  7. The Weinstein Company

Whatever is happening in the above and other organizations is preventable. The companies below understand that and achieve high ratings from their employees and from their customers.

 What Companies have Positive Work Cultures and High eNPS Scores?

Here are five companies recognized for realizing high employee Net Promoter Scores (eNPS) and positive workplace environment.

  1. Zoom the video conferencing platform, achieves a 94 eNPS. The company experienced significant growth during the COVID-19 pandemic, and its emphasis on employee well-being and flexibility contributed to positive employee performance and attitudes.
  2. Salesforce is a cloud-based software company recognized for establishing a strong company culture. The company eNPS rating of 56 demonstrates its commitment to employee success.
  3. HubSpot is a developer and marketer of software products for inbound marketing and sales. It is known for its employee-friendly policies and positive workplace culture with a 74 eNPS rating.
  4. Adobe, a multinational software company, has consistently ranked high in various employee satisfaction surveys. Their eNPS rating is 76.
  5. Intuit, a financial software company, is recognized for its commitment to employee development, diversity and inclusion, and a positive work environment. It reached an eNPS rating of 43.

Note, workplace perceptions can change over time, and individual experiences within a division, department, or location of a company may vary. Hopefully, companies respond to their issues positively.

How Do Can You Prevent a Toxic Workplace?

Why Companies Must Fear a Toxic WorkplaceIt requires a people first initiative-taking effort from executive leaders. Quite frankly it is no longer an option if you want to maximize a company’s potential. Here are key actions that executive leaders can take to foster a healthy work environment.

Promote a Positive Culture

  • Lead by example and embody the values that promote a positive workplace culture.
  • Foster open communication, transparency, and trust within the organization.
  • Encourage a collaborative and inclusive atmosphere that values diversity.

Set Clear Expectations

  • Clearly define roles, responsibilities, and expectations for all employees.
  • Provide regular feedback through performance discussions and evaluations to ensure alignment with organizational goals.

Invest in Leadership Development

  • Provide rigorous training and learning opportunities for leaders at all levels to enhance their skills.
  • Consider delivering Servant Leadership Training to all managers and executives.
  • Emphasize the importance of integrity, emotional intelligence, empathy, listening, humility, and effective communication.

Address Discrimination and Harassment

  • Establish and enforce strict policies against discrimination, harassment, and bullying.
  • Ensure that employees feel safe reporting such incidents and that there are clear procedures for investigation and resolution.

Prioritize Work-Life Balance

  • Encourage a healthy work-life balance by discouraging excessive working hours.
  • Provide flexibility and support for employees to manage their professional and personal lives.
  • Have leaders model work-life balance.

Why Companies Must Fear a Toxic WorkplaceImplement Fair Compensation and Recognition

  • Ensure fair and transparent compensation structures.
  • Recognize and reward employees and employee teams for their contributions.

Create a Safe Reporting System

  • Transform HR from corporate cops to employee advocates.
  • Establish anonymous reporting processes for employees to share concerns without fear of retaliation.
  • Listen to employees and take reports seriously and conduct thorough investigations into workplace issues.

Support Mental Health and Well-being

  • Implement programs that support mental health and well-being in the workplace.
  • Provide resources such as counseling services and stress management programs.

Encourage Innovation and Creativity

  • Foster an environment that encourages creativity and innovation.
  • Acknowledge and celebrate innovative ideas and initiatives from employees.

Regularly Review and Elevate Your Efforts

  • Assess your workplace culture through surveys, employee focus groups, or other feedback mechanisms.
  • Establish an eNPS metric and aim for top-tier results.
  • Create action plans for improvement and review them regularly for progress.

These actions help. And delivered with genuine respect and care, achieve positive results. This means making your employees’ success a priority.

Why Companies Must Fear a Toxic WorkplaceWhat Impact Does a Toxic Workplace have on Employees?

According to research, toxic workplaces produce a combination of these eleven negative outcomes.

  1. Stress and Burnout.
  2. Negative Mental Health
  3. Decreased Job Satisfaction
  4. Increased Turnover
  5. Impaired Physical Health
  6. Reduced Productivity
  7. Strained Relationships
  8. Impact on Career Growth
  9. Undermined Confidence
  10. Adverse Effects on Work-Life Balance
  11. Negative Impact on Organizational Reputation

Bottom-line, toxic workplaces decrease employee engagement, performance, and emotional well-being. What sane executive or company would want that?

 What Impact Does a Toxic Workplace have on a Company’s Performance?

Research shows that a toxic workplace can have a considerable negative impact on a company’s performance across various dimensions. These are grave consequences for any executive and company.

  • Reduced Productivity
  • Higher Turnover Rates
  • Negative Impact on Innovation:
  • Poor Organizational Reputation
  • Increased Absenteeism
  • Higher Healthcare Costs
  • Decline in Employee Morale
  • Difficulty Attracting Top Talent
  • Decreased Customer Satisfaction
  • Legal and Compliance Risks
  • Difficulty in Adapting to Change

What is the Payoff for a Positive Workplace Culture?

Why Companies Must Fear a Toxic WorkplaceThe Best Companies design and support a positive work culture that inspire employees to achieve top-tier bottom-line results such as the following.

  1. Increased Employee Engagement: According to Gallup’s State of the Global Workplace report, employees who receive regular recognition are more likely to be engaged in their work. This results in higher productivity, lower turnover rates, and 21% more profit.
  2. Improved Employee Retention: The Society for Human Resource Management (SHRM) found that organizations with effective recognition programs experience 31% lower voluntary turnover than those without such programs.
  3. Boosted Job Satisfaction and Performance: A survey by Psychometrics revealed that 69% of employees say they would work harder if they received more recognition for their efforts.
  4. Impact on Performance: The Aberdeen Group found that organizations with effective employee recognition programs have a 6% higher employee performance compared to those without such programs.
  5. Positive Work Environment: The O.C. Tanner Institute’s 2020 Global Culture Report showed that 87% of organizations with a strong recognition culture reported a positive employer brand.
  6. Link to Employee Well-Being: A survey conducted by Globoforce in 2021 found that 84% of employees felt recognized by their manager reported lower stress levels.
  7. Appreciation and Effort: According to a survey by Glassdoor, 53% of employees felt that receiving recognition for their work would make them feel more appreciated.
  8. Connection to Happiness: The Harvard Business Review reported that employees who feel appreciated and recognized are not only more satisfied with their jobs but are also happier overall.

Pulling It All Together

Why Companies Must Fear a Toxic WorkplaceA toxic workplace can be blatant as the examples above might indicate but it can be deceptive. A friend had a job opportunity with a large medical manufacturer. He and his wife were “wined and dined” at the corporate headquarters. All the key executives participated in the interview and social activities. They showcase all their great amenities and benefits related to this organization. At the end, they offered him the job, and wanted an answer at the final interview. He asked for a little time to think it over.

My friend’s daughter was going to graduate from high school, and they lived in their current town all her life. It would be a substantial change at a crucial time in her life. This surprised the key executive, he acted aghast. He said, “We are the best. What is there to think about?” As my friend and his wife discussed this, they both thought of the movie Stepford Wives—too good to be true. With further investigation they discovered that the company had two camps for the privileged and the rest that included a strict code of conduct. He turned down the job.

Finally, great leaders and companies are of service focused on helping people win and succeed. They care. When this happens, companies succeed because they are great places to work.

  • ‘Culture is to recruiting as product is to marketing.’ — HubSpot’s Culture Code
  • “Customers will never love a company until the employees love it first.”– Simon Sinek
  • ‘Being a great place to work is the difference between being a good company and a great company.’ — Brian Kristofek, President and CEO, Upshot
  • Corporate culture is the only sustainable competitive advantage that is completely within the control of the entrepreneur.’ — David Cummings, Co-Founder, Pardot
  • A hallmark of a healthy creative culture is that its people feel free to share ideas, opinions, and criticisms. Lack of candor, if unchecked, ultimately leads to dysfunctional environments.’ — Ed Catmull, President of Pixar

Also, click here for a complimentary resource called– How Does Servant Leadership Work?

Why Companies Must Fear a Toxic WorkplaceFurthermore, the world desperately needs leaders that have empathy and care. Join the revolution in leadership thought and practice that elevates people first through Servant Leadership on LinkedIn: ServantLeadership@RickConlowInternational

Finally, see Rick’s newest book. The 5 Dynamics of Servant Leadership: How to accelerate your career and inspire your team!  See his newest self-directed leadership training: 21 Servant Leadership Training Lessons.

CEO/Founder, Rick Conlow International: RCI transforms managers from good to great coaches and trains them to become Servant Leaders. Clients achieve record-breaking performances in sales growth, customer experience improvement, employee engagement and leadership effectiveness. Furthermore, RCI’s online resources coach and train all managers or employees to higher levels of career success.

Note: Research for this post completed with ChatGPT input.

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