Toxic workplaces are far more common than what people believe. In a study done in 2019, 29% of the 40,000 employees surveyed have left jobs due to workplace conflicts. A toxic work environment is detrimental to the productivity of the employees, yet many companies are not doing much to transform the negative workplace culture into a positive and welcoming one. In a recent news, the popular American talk show, The Ellen DeGeneres Show, was under fire for having a toxic workplace culture. Many employees have come forward to shed light on how the upper management instilled a toxic workplace culture by bullying and instilling fear in their employees. Employees of the show were afraid to speak up whenever they witness issues for fear of getting into trouble with their superiors.
A toxic workplace culture is a common phenomenon in many organisations, regardless of the industry or the size of the organisation. The leadership team are often the ones who are responsible for promoting the kind of organisation culture that they desire, by setting a prime example among themselves for the rest of the organisation. However, even through vigorous promotion of the desired organisational culture, these cultures might not be adopted due to several reasons. Examples of such factors that inhibit the incorporation of a positive organisational culture includes poor communication between employees and the management team, lack of employee engagement, and the presence of a hyper-competitive work environment. If managers are not transparent in their communication with their employees, it would be difficult to establish the trust in the workplace, causing employees to stay silent even when they witness an issue or have an idea in mind. Also, it is very important for organisations to constantly engage their employees to show their employees that the company is interested in them. Many employers tend to confuse between having satisfied employees and having engaged employees. Management of organisations with low turnover rate are often convinced that their employees are engaged. Unfortunately, that is not the case. A satisfied employee might stay on in their current jobs and perform their job decently but will never be motivated to go above and beyond their job responsibilities to think of ways to help the company progress, unlike an engaged employee. Another factor that promotes a toxic workplace culture is the presence of a hyper-competitive environment, where employees are encouraged to go against each other to emerge as the top-performing employee. This leads to a toxic workplace culture where people are motivated to backstab their co-workers, which prevents the building of a cooperative culture.
A negative workplace culture can be costly, both in terms of economic costs and opportunity costs. Firstly, by having a toxic workplace culture and disengaged employees, employees are often not willing to go the extra mile to achieve the goals of the organisation. Companies that invest in culture, technology and physical workspaces are 4 times more profitable than those who do not. These companies are 25% smaller, which indicates a higher productivity level than companies with toxic workplace culture. Secondly, companies with a toxic workplace culture tend to have a high turnover rate for the top leadership positions. The average tenure of a CEO leading a large market cap company is 5 years, and the failure rate in the first 18 months is between 30% and 75% (Prive, 2019). By overlooking the toxic culture in the company, company performance is likely to suffer, causing the top leaders to be pushed out. This results in a massive loss for the company in terms of time and money, as well as a general loss of direction for the entire organisation. Thirdly, companies with a toxic workplace culture tend to have employees who fall ill more often due to burnout at work. This causes a decline in the overall productivity in the company. Lastly, when unhappy employees leave their jobs due to negative work environment, they tend to spread their negative experiences with their social circle and on online review platforms. This negative word-of-mouth is detrimental to the company as the negative reputation drives away potential hires.
With all the negative consequences that comes along with a toxic workplace culture, it is important for companies to invest in building the desired culture in the organisation. The transformation of a negative culture into a positive one starts from the leadership team. As such, it is crucial for leadership team to establish the kind of culture they desire among themselves first, before promoting this culture to their employees. Nevertheless, it might be difficult for leadership teams to facilitate the culture transformation among themselves. In such cases, it would be beneficial for the company to invest in bringing in a third-party facilitator or consultant to identify the root cause of the toxic culture. Ultimately, the first step to transforming an organisation’s workplace culture is by acknowledging that there is an issue with the culture, before steps can be taken to resolve it.