The High Cost of Hiring Toxic Employees
Business + Economy

The High Cost of Hiring Toxic Employees

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They have been called many things: toxic, negative, dysfunctional, narcissistic, territorial, sociopathic, de-motivating, vampire-like. The words describe employees – from CEOs on down to mid-level managers and their subordinates – who tear through an office, disrupting everyone’s work environment and leaving a path of destruction in their wake before finally moving on, like a hurricane.

Hurricane employees are nothing new: While most people have encountered some version of them during their working lives, HR practitioners and experts alike suggest that today’s business climate is more susceptible to their influence.

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Studies show that recruiters spend an average of five to seven seconds looking at resumes – focusing mainly on previous experience and salary requirements — while job seekers have learned to game the online application system by using words they know will trigger interest in their resumes. Candid reference checks beyond a person’s name and employment confirmation are rare. In short, it is harder than ever to predict whether the new hire on the block will meet the company’s needs or sabotage the company’s culture.

Blowing Away Social Networks
Organizations experience hurricane employees in many different ways, but in general they are employees who “destroy the social fabric of the organization by creating friction, drama, tension and hostility among other employees,” says Michelle K. Duffy, a professor at the Carlson School of Management, University of Minnesota. Research has shown that “strong and healthy social networks lead to better outcomes for employees and organizations alike,” Duffy adds. “Hurricanes damage not only the people in the network, but also the ties among them.”

Karol Wasylyshyn, a Philadelphia-based clinical psychological and executive consultant, recently looked for repetitive patterns of behavior among the hundreds of people she has coached over the past 25 years. She came up with three common personas, one of which she labeled “toxic” — people “who may be very bright and were hired into the organization because they have certain backgrounds, experiences or technical knowledge. But they are not able to think in an integrated way,” she says. “They are unproductive narcissists who consider only their own needs,” a self-absorption that acts as a “de-motivating” influence on team performance. In short, “they contaminate the system.”

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Tim Withers, president and co-founder of Boston-based Parallel Consult, a management consulting firm that focuses on family-owned and private businesses, describes a hurricane employee as “the antithesis of a team-oriented player…. It takes time, energy and momentum to build a team. It doesn’t happen overnight. A hurricane employee can [undo] a year of teambuilding within a couple of weeks.”

While some hurricane employees bring varying degrees of difficult personalities into an organization, they can also be people who create havoc because they simply don’t fit into the culture. “When someone who has typically been a high performer as an individual contributor is put into a role that requires working through others, not surprisingly,” it doesn’t end well, says Peter Cappelli, director of Wharton’s Center for Human Resources.

“An employee who comes from a hard-driving culture of frank feedback, setting tough goals and badgering people to meet them — a culture where conflict is how things get done – will come across as very toxic in an environment where consensus and conflict avoidance are high,” adds Wharton management professor Matthew Bidwell. A company might say it wants people who are candid and straightforward, “but actually it doesn’t. It wants a friendly collegial atmosphere. So it’s important for a [company or team] to be honest with themselves about their culture.”

Withers points to the “talent model” ethos popular in the financial services industry, among others. “A lot of people in hurricane mode come out of the talent model environment where there is little emphasis on building teams or rewarding groups. It is very much of a ‘me’ culture in which employees don’t mind burning down the bridges as long as they elevate themselves.”

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The source of dysfunctional behavior, however, is not always easy to determine. “I hear people say that a particularly disruptive person is acting out or can’t get with the program, but I think of that person as a symptom,” says Jeff Klein, executive director of the Wharton Leadership Program. “The problem tends to be around alignment within a team: Are we clear about the roles people play, about the norms and expectations, and about the way we work together? If the answer to any of these questions is no … then the problem may be at the group level, or it could between two people. It is rarely the person.”

Hurricane behavior, whatever its origin, tends to be found these days in large organizations that experience high turnover. “Companies are trying to plug holes so fast that it is challenging to build teams and teamwork,” says Withers. “They don’t get to know people on a personal level.” It becomes especially tricky when a hurricane employee is also the top sales person in the company. “If the organization has a good culture, it will be clear that the primary goal is to create a good team and build efficiencies across groups,” he notes.

“Another company, however, looks at the quarterly numbers and sees that this person is producing twice as much as the person next to him.” Consequently, it is slow to act on the dysfunction that the employee is causing. “And once leaders are slow to act, they are crushing the internal culture even more because they are showing that they are willing to put up with the hurricane employee despite the disruptions he brings.”

Sandra Robinson, a professor at the Sauder School of Business, University of British Columbia, suggests that hurricane employees “are more likely to show up when hiring managers pay too much attention to task competencies, formal credentials or experience over seriously weighing and considering the individual’s character or potential fit with the culture…. The former is easier to evaluate and more likely to dominate the decision process.” Robinson has seen two cases where the job candidate raised red flags during the interviews: One involved a top executive “who went out of his way to tell anyone who would listen that he had very high emotional intelligence. Another elaborated upon how he manipulated his way into a corner office in his last position.”

Wharton management professor Sigal Barsade has spent two decades researching the area of emotions and work dynamics. In a paper titled, “Why Does Affect Matter in Organizations?” Barsade and co-author Donald Gibson of Fairfield University’s Dolan School of Business note that “affect matters because people are not isolated ‘emotional islands.’ Rather, they bring all of themselves to work, including their traits, moods and emotions, and their affective experiences and expressions influence others.” (“Affect” is another word for “emotion” in organizational behavior studies.)

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In another paper titled, “The Ripple Effect: Emotional Contagion and Its Influence on Group Behavior,” Barsade looked at emotional contagion – the way a person or group can be influenced by emotions and/or the behavior of others. A group, she writes, “could unknowingly be affected by a particular negative group member … who causes the entire group to feel apprehensive, angry, or dejected, leading to possible morale and cohesion problems, unrealistic cautiousness, or the tendency to disregard creative ideas.” The better approach is for group members to acknowledge the contagion and “understand its possible ramifications for their group dynamics and decision making.”

That, of course, is easier said than done. In “How, When, And Why Bad Apples Spoil the Barrel: Negative Group Members and Dysfunctional Groups,” authors Will Felps, Terence R. Mitchell and Eliza Byington study how the behavior of one negative group member “can have [a] powerful, detrimental influence on teammates and groups.”

The authors cite three types of destructive team member behavior: “withholding of effort, being affectively negative and violating important interpersonal norms.” Teammates themselves, the authors note at one point, “may not have the power needed to respond to a negative member. In many cases, group members may look to their leader to punish” the offender. A leader or leaders who aren’t up to the task “may allow a negative person to persist in their destructive activity.”

The authors cite other research suggesting that negative relationships “have a greater impact on job satisfaction and organizational commitment than do positive or neutral associations” – an example of the “bad is stronger than good” effect already noted. In addition, “negative effects are more pronounced in high density, high interdependence situations, [such as] teams.”

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Finally, as the authors note in their conclusion, when an individual in the workplace begins to display negative behavior, “it consumes inordinate amounts of time, psychological resources and emotional energy,” and it may “underlie many people’s reluctance to fully commit to teams.” Management commentators frequently cite a study done by Felps, a professor at Rotterdam School of Management, demonstrating that one negative employee can cause his or her team’s performance to drop by 30% to 40%.

When Leaders Let Down the Team
Does the manager who hired a hurricane employee find that his or her staff may no longer trust his judgment, or feel he is not looking out for the welfare of the team? Absolutely, says Cappelli, but “but my guess is that in these situations, the team already knows that, because feedback from the team probably wasn’t part of the hiring process. Often these candidates are brought in with the goal of ‘shaking things up.’”

Bringing in a person who is “just not getting with the program threatens the leader’s credibility and authority,” adds Klein. “Ultimately, one of the things a group looks for in a leader is stability around how that group is going to function. If a leader is not holding everyone to the same standard, that will erode employee loyalty.” Wasylyshyn agrees. When a manager keeps hiring employees who don’t work out, then the staff will begin to feel they can’t trust the manager’s judgment, she says. “Or they may wonder if the manager really believes in team-based leadership. Because if he does, why does he keep importing hurricane employees?”

Hurricane employees “cost companies a lot of money in ways that may not be obvious,” says Duffy. “Even if they are star performers … they can be quite damaging to the bottom line through lost work hours, people avoiding the hurricane, talking about the hurricane, being worried about dealing with the hurricane, witnessing others harmed by the hurricane and so forth.”

The way to avoid this situation, she adds, is for leaders to define their company’s code of conduct as part of the job. “Some companies, like Southwest Airlines, explicitly make it clear that employees who verbally, emotionally or physically damage others are not part of the team and are not welcome.”

Hurricane Prevention: Avoiding a Category 5
How does an organization steer clear of hiring, or promoting, hurricane employees? These mistakes “could be avoided with a little more care,” says Cappelli. “They often occur when senior managers buy into the vision of change that the employee presents – the goals – and don’t think through how likely it is to be achieved.” If prospective top-level hires “don’t explain how they are going to go about changing the operation, if they don’t talk about the role their subordinates will play, if they are only talking about themselves” – those are all tip-offs that this person might be a problem.

Klein, who led teams at AT&T for 10 years before coming to Wharton, says managers can test job candidates’ fit in the organization in several ways. One is to set up a virtual inbox in which the job candidate is asked to review six pieces of information and decide how to respond to and prioritize them. Another approach is for candidates to participate in a half-day simulation where they work in teams on a project, such as building small cars out of paper. “The task doesn’t matter,” Klein says. “What we are looking at is the way these people interact over a longer period of time. Usually the results corroborate what we have already seen, but occasionally there are people who are revealed as potential hurricane employees — destructive, demanding, self-focused as opposed to team-focused. The trade-off for the company is that this approach takes time.”

Klein points to a colleague who operates a series of climbing gyms. “He won’t hire someone until he has gone climbing with [him or her] at least six times.” Companies with better track records, he adds, pay attention to two things: selection – does the employee’s attitudes toward work mesh with the company’s approach – and training, one way that the company indicates it is willing to invest in the new employee.

Too many companies “are looking for a certain pedigree, a certain set of experiences, but fail to pay attention to the behavioral side,” says Wasylyshyn. When they write their job specs, they don’t include a section describing the behaviors they would like to see in the candidates, such as interpersonal skills, ability to work in a team-based environment or executive presence. “It’s important to flesh out what it would take for a person to fit into the company’s culture. Doing this is not rocket science.”

The tip-off that a candidate may not be a good fit, she adds, comes from someone who might present an aggressive profile and who is focused on results, but has little to say about how he or she would get things done, given the nature of the company’s culture. “So they will sound strong on the ‘what’ but not on the ‘how,’” says Wasylyshyn. “Their relationships are primarily transactional, not connective.”

One company that stands out in the hiring process, in spite of its size, is LEGO, the number two toymaker in the world. According to a November 14, 2013, Wall Street Journal article, the company recently filled several openings for designers by inviting 21 men and women to spend two days (at LEGO’s expense) at headquarters in Billund, Denmark. Rather than go through formal interviews, the candidates were asked “to sketch and build LEGO sets in front of a panel of senior designers.” The men and women were judged not just on their design concepts – including “color schemes, buildability and the elusive element of fun” — but also on “the way they interacted with each other.” After all, as the article pointed out, the town of Billund has just 6,500 inhabitants and “night life is limited to an Irish pub.”

This article originally appeared in Knowledge at Wharton

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