Toxic Workers [pdf]

I suppose the reason this piece strikes this community as so silly is that the general philosophy of the startup is that a group of 5 or 10 people can best multi-million dollar corporations because corporations are so inefficient. To turn to such a company's firing decisions as the source of truth of worker quality feels profoundly backward.

Unfortunately for the authors, today's scientific paradigm requires at least the semblance of a statistical analysis. Finding a numeric measurement for an aspect of human consciousness, such as "toxicity" (or how much of a jerk you are), can be quite difficult. For the empirical portion of the paper, the authors choose to define a "toxic worker" as one who has been fired for "an egregious violation of company policy" such as "sexual harassment, workplace violence, falsifying documents, fraud, and general workplace misconduct". In their data, 1 in 20 employees was eventually deemed "toxic".

While I'm sure most people can identify a jerk at the office, they might also tell the authors, "You keep using that word [toxic]. I do not think it means what you think it means."

And finally they conclude you should always try to cut losers instead of fighting for winners. There is no game (in the sense of game theory, not child's play) in which "always" really makes you better than average. Sometimes everybody knows that someone is toxic but you can't cut him lose, because he is in a very specific position (e.g., the brother of your most important customer). Another time having that one super-star will put you forward by a dimension, not just a few bucks. "Instead of always do A better always do B"? No, both is wrong. Don't "always".

"less attention has been paid to the question of how to manage those workers on the opposite side of the spectrum: those who are harmful to organizational performance."

Which is complete rubbish--GE placed a huge focus on doing performance reviews and culling the "bottom 10%". A practcice which started a trend (called forced ranking) that grew to include many of the fortune 500, in cluding perhaps famously Microsoft.

Its either a bafflingly careless omission or a cynical gesture to pretend this topic is somehow "under the radar" in business school or corporate HR departments.

As per the paper:

"To generate a straightforward comparison of the value of each of these focuses, we quantify the value of a star performer by identifying the cost savings from her increased output level. That is, a superstar is a worker that adds so much value that without her a firm would have to hire additional workers (or pay for additional hours from existing workers) to achieve the same level of output as when they have that single superstar worker."

"We calculate the percent in increased performance for each of these performance levels and multiply it by the average worker salary, based on company records."

"For comparison, we report in the "Avoid a Toxic Worker" column the induced turnover cost of a toxic worker, based on company figures. Induced turnover cost captures the expense of replacing additional workers lost in response to the presence of a toxic worker on a team."

"Top 1% Superstar: $ 5,303 Avoid a toxic worker: $ 12,489"

"The data were obtained from a company that builds and deploys job-testing software to large employers. Many of these companies are business-process outsourcers (BPOs) that themselves provide a variety of business services (e.g., customer care, outbound sales, etc.) to their clients. The employees included in the dataset are all engaged in frontline service positions and paid on an hourly basis."

So these stats are coming from call center staff and telemarketing where there's a lot more priority on people following the script/process than showing flashes of brilliance. But all of that gets lost when it gets breathlessly repeated in the abstract or in articles referencing it.

And "toxicity" spreads. Spreads fast.

1. Why are workers toxic? Is it something you're born with, or something that you have when you are hired? Is it unchanging, black and white, true or false—or can it change over time or be impacted by the environment?

2. Given the answer to the above, what types of things influence workers' toxicity? Are you able to improve any of those things?

3. Given that the time and focus of any team is limited, and assuming most of the improvements from question 2 actually impact everyone in the company positively, do you truly believe that handling toxic people is the best use of time for a human management team?

Fire when you need to, and ensure you fix mistakes quickly and with intelligence, but do not focus efforts on the bottom tier. Work to improve the environment that makes people "go toxic." Ignoring that environmental effect is the type of behavior that makes toxic companies, which is the far greater problem, and should be the far greater concern.

We all know toxicity exists, and we've worked with people who, on the surface, don't belong anywhere near the company. But often the medium that breeds toxicity—the politics, fear, competition, in-fighting and more—is more important to tackle than the individuals themselves. There's a reason companies foster and hire people who tend toward toxic behavior; and there's a reason they act the way they do.

As W. Edwards Deming said: “Give the work force a chance to work with pride, and the 3 per cent that apparently don’t care will erode itself by peer pressure.”

1. I like to ask about other people's well-being

OR

2. I let the past stay in the past

Choosing Statement 1 would give subjects a greater other-regarding score, whereas choosing Statement 2 predicts a subject to be self-regarding

The whole idea that good leaders wing it and do their best, but that they can and should detect and weed out toxic workers and end their career with absolute certainty (because being declared toxic will be very hard to recover from) is a really interesting cognitive dissonance. Allow margin for error to good role model, but bad role model are intrinsically bad and unredeemable. I'm sensing straw man, posturing and feel good speech all the way down.

And yes, of course toxic management is more likely to be a problem, even though it remains curiously unstudied by the HBS.

Even so, I think the takeaway - don't hire self-aggrandising control freaks, no matter how talented they seem to be - is probably sound at every level.

Except possibly the CEO. (Was Steve Jobs toxic? Bill Gates? Haven't most toxic CEOs been disastrous for their companies?)