Beware the rule-following co-worker, Harvard study warns

Every workplace seems to have them: the colleague who undermines others behind their backs, the manager who takes credit for shared work, or the coworker whose behavior everyone quietly works around. While these individuals are often dismissed as merely unpleasant, research suggests they are far more damaging than most organizations realize.

In a provocative Harvard Business School working paper, researchers Michael Housman and Dylan Minor analyzed data from roughly 50,000 employees across 11 companies to build one of the most detailed empirical profiles to date of what they call a “toxic worker.”

The study drew on a rare combination of data: psychometrically designed hiring assessments, detailed employment records, and daily performance metrics. All employees in the sample worked in front-line service roles and were paid hourly. Toxic behavior was defined conservatively, focusing on extreme cases that resulted in termination, including harassment, bullying, fraud, theft, and workplace violence.

The findings challenge conventional wisdom. Toxic workers are not underperformers. On the contrary, they tend to be exceptionally productive, often completing tasks faster than their peers. This helps explain why such individuals frequently persist in organizations despite unethical or harmful behavior.

“There is a potential trade-off,” the researchers note. “They are corrupt, but they excel in work performance.”

This trade-off can tempt organizations to look the other way, particularly when a high-output employee is delivering strong short-term results. Prior research even suggests that unethical workers may remain employed longer than ethical ones.

Financial impact

When the broader consequences are measured, toxic workers prove enormously costly. Their presence drives up turnover among colleagues, depresses morale, and corrodes organizational trust. The researchers estimate that avoiding a toxic worker delivers nearly a two-to-one return compared to hiring a superstar employee.

Specifically, toxic workers generate an estimated $12,489 in induced turnover costs, compared to approximately $5,303 in value created by a top 1% performer. These figures exclude additional costs such as litigation, regulatory penalties, reputational damage, and long-term disengagement, meaning the true impact is likely higher.

The study also identifies several traits that predict toxic behavior. Such employees tend to exhibit high self-regard (selfishness), low concern for others, and excessive overconfidence, a trait associated with risky decision-making. Counterintuitively, individuals who insist that rules should always be followed were more likely to be terminated for rule-breaking.

The authors suggest this may reflect Machiavellian tendencies—saying what evaluators want to hear rather than expressing genuine ethical judgment. As they note, there is strong evidence linking Machiavellianism to deviant workplace behavior.

Importantly, toxicity is not solely a fixed personality trait. The researchers found that exposure to other toxic workers significantly increases the likelihood of misconduct, suggesting that environment and peer effects matter. Lowering the “density” of toxic workers can, in some cases, reduce harmful behavior.

The practical takeaway is clear: from a strictly economic standpoint, organizations benefit more from preventing and managing toxic behavior than from focusing exclusively on hiring star performers. Avoiding harm, the research suggests, delivers greater and more durable value than maximizing upside alone.