Shock to the System: Dealing with Toxic Staffers at Work

​Like digging out a weed before it can spread, it's up to workplace managers to root out toxic employees before they disrupt workflow and damage morale.

According to a Harvard Business School analysis of 50,000 employees, "avoiding a toxic worker (or converting him to an average worker) enhances performance to a much greater extent than replacing an average worker with a superstar worker."

The analysis defines a toxic worker as someone who "engages in behavior that is harmful to an organization, including either its property or people."

Additionally, the study reports that "aside from hurting performance, such workers can generate enormous regulatory and legal fees and liabilities for a company."

Monetarily, that cost adds up. Bringing aboard a so-called superstar staffer can add $5,300 to a company's value, the Harvard report states. Correspondingly, firing a toxic worker (or not hiring one from the get-go) can save a company $12,500.

Identifying a Toxic Employee

"A toxic worker is expensive," said Jennifer Hancock, founder of Humanist Learning Systems, a business management learning platform in Ellington, Fla. "That's not just because of the potential for lawsuits. Toxic workers kill productivity because they kill trust."

Hancock said one of her first jobs out of college was as director of volunteer services for a nonprofit.

"We had a big problem in volunteer staff relations when I was hired, and I was assigned to fix it," she said.

Hancock said one volunteer was acting as if she was in control of other volunteers, when it was the nonprofit's managers who should have been.

"She felt her job—and therefore the job of all the volunteers—was to spy on staff and report them for behaving badly, however she defined that," she said. "No member of the staff wanted to work with a volunteer who thought it was their job to get them in trouble. That led to a breach of trust between organizational staffers and volunteers."

Hancock consulted with staff to see how the organization's volunteers could be more helpful.

"I wrote up a job description and interviewed the volunteers to see if they were on board with the volunteer jobs we had created," she explained. "All but the toxic one were thrilled to finally have some clarity around what they were supposed to be doing and how they could be helpful. They could finally ignore the toxic individual. After that, the volunteer was fired and the program took off."

In three years, Hancock's firm went from 10 volunteers contributing little to the organization to 500 volunteers donating 20,000 hours a year. "Trust was pretty easily rebuilt once we had some structure and an authority at the organization held her accountable," she said.

Take Action with These 7 Steps

What should a manager do to identify, deal with and, if necessary, fire a toxic employee? Business experts advise having an attitude that combines empathy and pragmatism. Start with these action steps.

1. Know the red flags.

Toxicity, narcissism, emotional manipulation, bullying and other damaging behaviors can poison a work culture, said Kathy Caprino, a career coach and author of The Most Powerful You: 7 Bravery-Boosting Paths to Career Bliss (HarperCollins, 2020.)

"In working with thousands of professionals as a career coach over the past 15 years, I've seen firsthand—and experienced it in my own corporate career—the evidence of the lasting damage that toxic people can inflict on others," Caprino said. She points to these "red flags" that an employee is poisoning a company's culture. The toxic worker is:

• Crushing other team members' self-esteem and confidence.
• Sabotaging a team's success.
• Making others question their every move and decision.
• Interfering with teamwork and collaboration.
• Demoralizing staff so they decide they cannot stay.
• Corrupting the work culture so that it's not a psychologically safe environment, which in turn stifles innovation, creativity, productivity and collaboration.

"Identifying a toxic employee is easy if you understand what to look for and you're attentive to the work cultures you're creating," Caprino said. "Look for workers who create havoc, hurt others, tear down people's confidence, micromanage and erode people's self-reliance and self-confidence, disrupt meetings, bully subordinates, undermine success, backstab or suppress others, and gossip in ways that divide and hurt others."

2. Listen to staff.

Team members are a great source of information on problematic staffers.

"They can also inform management of disruption and discord on the team. Consequently, managers should observe carefully the emotional state of their staff. In doing so, a manager will see more quickly and clearly when a toxic worker is negatively impacting the organization," Caprino said.

3. Write it down.

When dealing with a toxic employee, make a record of every step of the review process.

"First, document all the behavior in a concise way and have a serious talk with the individual that explains exactly what has to change in the behavior," Caprino said. "Inform human resources of the situation and of your plans and get them involved if necessary. There is most likely a set protocol that the company requires managers to follow in these situations. Follow that protocol."

Often, that process involves eliciting the individual's feedback and assessment of what they feel is happening. Get his or her side of the story. If further assessment of the situation needs to be done, don't delay; do it as soon as possible.

4. Be transparent with the employee.

After a manager gains the necessary intel, address the issue with the team member in question.

"Once you're armed with solid information, speak with the worker in a way that doesn't make them feel guarded," said Adam Gordon, co-founder of PTO Genius, an Atlanta-based HR tech platform. "Personalize the conversation and see what's going on."

Getting the staffer's perspective is critical, Gordon said.

"Maybe there's something going on in their personal life and it's affecting their professional world," Gordon said. "Once a level of trust has been established, you can give subtle suggestions and offer the person a second chance. As a leader, it's important to act quickly and decisively."

5. Keep the entire team in the loop.

The issue at hand with a toxic worker may be highly emotional, but you can't hide the problem from team members—they're likely to be aware of it, anyway.

"Toxic workers are notorious for having 'amnesia' after one-on-one conversations and will pit the manager against other people in an organization," said Mari Verano, a behavior consultant and therapist who specializes in handling toxic personalities in her practice at San Francisco-based Mari Verano LLC. "Make sure that the issue is addressed to the entire department to reduce the chance of teamwide disruption."

6. Walk in the employee's shoes, but be decisive.

Empathy is a good attribute to have as a manager looking into a potential toxic worker issue.

"A big key is taking time to understand what motivates their negativity and fuels their detrimental actions," said David M. M. Taffet, CEO at Petal, a consumer goods company in Fort Worth, Texas. "Instead of attacking them for what they did or failed to do, spend time understanding how they perceive themselves and their role in the company."

Once you understand their motivations and perspective, help the staffer understand the implications of his or her behavior. "By being hard on the issue and not the person, you might get them to acknowledge how their behavior is hurting the company and themselves," he said.

"If you succeed in getting the employee to see the light and re-engage constructively, there's no reason not to keep them in their current role."

7. Recognize the worker may not change his ways.

"Generally, their teammates will welcome and embrace the change," Taffet said. "If the employee refuses to acknowledge [his] detrimental impact and persists in [his] actions, he'll have to be fired. Moving him elsewhere only transfers the pain to another unsuspecting part of the organization."

If an employee is irredeemable, quick termination is the best path, Taffet noted.

"The rest of the company will applaud and rally around decisive management moves," he said. "The health and happiness of the entire enterprise should always outweigh the personal discomfort of doing what is unpleasant."

Brian O'Connell is a freelance writer based in Bucks County, Pa. A former Wall Street trader, he is the author of the books CNBC's Creating Wealth and The Career Survival Guide.