Managing Toxic Employees

In the midst of the pandemic, the Great Resignation shook the U.S. workforce. Between April and September 2021, a record 24 million Americans resigned from their jobs. Employers were desperate for staff, offering attractive signing bonuses and wage bumps. Still, many employees held out for more. Scores of employers were left scratching their heads and wondering why.

Revelio Labs—a provider of workplace intelligence—gathered data that provides some insight. Revelio analyzed 34 million online employee profiles, as well as company reviews, to identify U.S. workers who left their employers for any reason between April and September 2021, and the reasons why they left.

Revelio’s research revealed that a toxic corporate culture was the No. 1 reason why most workers left their jobs. In contrast, how frequently and positively employees mentioned compensation ranked 16th in predicting employee turnover. A toxic corporate culture was more than 10 times as likely as compensation to predict a business’s attrition rate compared to its industry peers.

Infectious Toxicity

Though there’s no doubt that toxic culture can flow from the top down, it may also originate with rank-and-file workers. Employees who are toxic can make their colleagues feel uncomfortable, damage productivity and morale, and lead to other workers becoming disengaged and ultimately quitting their jobs.

“In this age of increasingly unruly behavior, employers need to grow their spines and be prepared to manage toxic behavior, aka unacceptable conduct, confidently,” says Laura Crawshaw, author of Grow Your Spine & Manage Abrasive Leadership Behavior: A Guide for Those Who Manage Bosses Who Bully (Executive Insight Press, 2023). “Failure to do so will be costly, calculated in terms of attrition of good employees, paralysis of production, and a perception on the part of employees that management fails to intervene because they are weak or tacitly condone toxic behavior.”

To prevent toxic employees from infecting an entire team or department, Crawshaw says, managers must first learn to identify those employees. There are several ways to do this.

According to Lisa Sterling, chief people officer at Perceptyx Inc., a provider of an employee listening and people analytics platform in Temecula, Calif., a toxic employee is continually disruptive, complains about leadership and does not get along well with other employees.

“Behaviors demonstrated by toxic employees include withdrawal, lack of engagement, higher frustration, easily agitated, lack of pride in their work, and complaints about the organization or leadership,” Sterling says.

Jennifer Libby, a Kansas City, Mo.-based district manager for the HR consulting firm Insperity, echoes that sentiment. “Toxic employees can be identified as individuals who exhibit mean behavior, possess a ‘put-down’ spirit and continuously make the effort to disrupt morale,” Libby says. “This type of employee usually self-isolates and is heavily self-centered.”

Toxic vs. Difficult

While some employees may be truly toxic, it’s important for leaders to keep in mind that there is a distinction between “toxic” and “difficult.” For one thing, difficult employees may be more likely to hear managers out.

“Toxic employees differ from a difficult employee based on the notion that difficult employees can be reasoned with and are open to conversations regarding what is affecting their behavior,” Libby says.

If an employee is remote, it may be harder to determine whether they’re acting in a toxic manner. According to Libby, some behaviors to watch out for include verbally micromanaging others during group calls and initiating gossip with other attendees via chat.

“These actions can be toxic and quickly bring down morale,” she says. “As with every work arrangement, leadership must outline behavior, performance and communication expectations from the start.”

Toxicity Tips

Managers who know how to handle toxic employees and be proactive about solving issues before they get out of hand are more likely to be able to cultivate peace in the workplace. Here are some ways to do that:

Address the behavior right away. Regardless of whether an employee is toxic or difficult, remote or in person, managers should take swift action to intervene before the behavior drives down morale in the department or organization as a whole.

“Waiting until they disrupt others can create far more problems and cause retention issues with your best ­people,” Sterling says.

Document everything. To protect every party involved—including the company they work for—managers should thoroughly document what is going on to create a record, should action need to be taken against an employee. “It’s important for leadership and management to properly document the issue, any steps taken to address it and any disciplinary actions taken,” Libby explains.

It’s also vital for managers to record the steps they’ve taken to address the employee’s behavior.

“Listen to employees and any issues they may have with another employee,” Libby says. “When toxic behavior has been identified, it could be helpful to separate [the employees] from each other, which may mean a different desk arrangement or shifting teams. All these solutions should be documented.”

She adds that managers should also detail the services or resources they give the toxic employee and how they did or didn’t change in response.

Confront the employee directly. Managers should personally confront the employee in question one on one to give them a chance to address their toxic behavior.

“The behavior could be due to issues with leadership or individuals in the workplace, private matters outside work or, in some instances, the employee may lack the self-awareness to see the harm they’re causing their colleagues,” Libby says. “When addressing concerns, foster a space of honest communication.”

Crawshaw suggests that managers set limits and consequences for the behavior of the employee in question. Companies should also offer help via internal mentoring or external coaching for employees who they want to retain. “If the abrasive employee can turn around their interactive style, great,” Crawshaw says. “If they can’t, they need to go.”

Cara Shortsleeve, co-founder and CEO of the ­Leadership Consortium, which produces a leadership development platform in Cambridge, Mass., says managers should “give the individual direct and specific feedback and make your expectations clear [by saying], ‘XYZ behavior is not acceptable on our team.’ ”

Even if an employee brings tremendous value to a company, they can also cost it a great deal, Shortsleeve says.

“The challenge for leaders of toxic employees is that their value is often easier to quantify than their costs,” she explains. “That’s because their value is known today. For example, Timmy Toxic always exceeds his sales quota, Tina Toxic is the best engineer we have, Ted Toxic has our highest win rate as a litigator, etc. The costs of their toxicity are often only apparent down the line, for example, through increased employee attrition spikes or increased reputational risk.”

It’s critical to think about not only the immediate impact but also the long-term effects that a toxic employee can have. “If you don’t see a change, make the tough call and part ways fast,” Shortsleeve says. “The long-term pain associated with toxic employees is never worth the short-term gain.”

Ideally, with constructive feedback, toxic employees will change their behavior. But if it comes down to a choice between one person’s employment and the well­being of the team or department as a whole, managers must be prepared to terminate toxic workers.

“Organizations must ensure every employee is given the opportunity to be in a toxic-free environment,” Sterling says. “It’s up to leadership and managers to create a space where employees can be their most authentic selves and thrive at work.”   

Kylie Ora Lobell is a freelance writer based in Los Angeles.