How Much Are Caustic Workers Costing You?

There’s been a lot of research dedicated to studying the havoc wreaked by jerks at work.

Some of these studies focus on the noxious influence that abusive, bullying bosses have on their teams, and what employees can do to cope with an out-of-control supervisor.

Some find that being a bit boorish can actually work to one’s advantage in certain situations, and share advice for recognizing when the circumstances call for flipping the jerk switch.

Some even provide tips on how to self-correct if you are the work jerk, or are in danger of becoming one.

A new working paper from Harvard Business School, however, is taking a more pragmatic look at the workplace jerk, attempting to put a price—in actual dollars and cents—on what employees who are destructive in one way or another can cost an organization.

Spoiler alert: It’s steep.

Economist Dylan Minor and Michael Housman, chief analytics officer at Cornerstone OnDemand, explored a dataset of close to 60,000 workers across 11 different firms. The goal of the ongoing study, the authors say, is to document various aspects of workers’ characteristics and circumstances that lead them to engage in “toxic” behavior, defined by the paper as conduct that’s harmful to an organization’s property or people.

“I wanted to look at workers who are harmful to an organization either by damaging the property of the company—theft, stealing, fraud—or other people within the company through bullying, workplace violence or sexual harassment,” Minor recently
told theHarvard Gazette.

Housman and Minor, a visiting assistant professor of business administration at HBS, also analyzed the relationship between productivity and the ripple effect that a toxic employee has on his or her peers.

While finding those defined as toxic are “much more productive” than their less-troublesome colleagues, the authors determined that the former actually diminish the productivity of those around them, and often drive co-workers to leave organizations faster and more frequently, generating sizable turnover and training costs. Ultimately, these caustic workers are so damaging from a financial standpoint that “avoiding them or rooting them out delivers twice the value to a company that hiring a superstar performer does,” according to the Gazette.

More specifically, the paper states that, “while a top 1 percent worker might return $5,303 in cost savings to a company through increased output, avoiding a toxic hire will net an estimated $12,489.”

And that figure, the authors say, doesn’t even include the money that could be saved by avoiding the litigation, regulatory penalties or decreased productivity that a devious or disruptive employee may leave in his or her wake.

These bad seeds come in all shapes and sizes, of course. But the paper identifies a few key predictors to help find them lurking within your workforce.

Toxic workers, for example, tend to demonstrate very high levels of self-regard or selfishness and overconfidence.

As Minor points out, this kind of hubris can lead one to take unnecessary chances, riding high on the belief that he or she is too smart to ever get caught engaging in questionable conduct, or is too valuable to be hit with any real consequences if that day does eventually come.

This paper also reiterates an uncomfortable truth unearthed in past studies: These folks are often high performers, which means that many employers grudgingly tolerate their antics rather than let them go. But few studies have attempted to quantify the actual cost of keeping them on, according to Minor.

And, while many managers may be more apt to look the other way when the offending employee is, say, putting up gaudy sales numbers, an organization literally can’t afford to ignore—and, in effect, reward—corrosive workers’ bad behavior any longer, he says.

“The worst thing to do is to not do anything, which happens a lot, unfortunately.”

To access the full-length article, click here.