Culture Correction: How HR Can Recognize and Combat a Toxic Workplace

A toxic workplace can be significantly detrimental to a business. In addition to negative effects on productivity, retention, and overall physical/mental health, a toxic work culture can even place a significant financial burden on your business. In fact, most employees place greater emphasis on culture than other factors, including pay.

• 1 in 5 employees have left their jobs in the past five years due to poor workplace culture (SHRM)
• Employees in toxic workplaces are 3x more likely to experience poor mental health (American Psychological Association) 
• Workers are 10x more likely to leave jobs due to toxic environments than low pay (MIT Sloan)

Recognizing toxic workplace warning signs

Toxicity can manifest differently based on several workplace factors. Recognizing the signs of a toxic workplace is the first step in correcting the overall issue. Finding the root of these problems is critical, as is addressing them quickly and effectively. 

Here are some of the most common signs of a toxic workplace culture:

• Disengagement: Employees show a lack of interest and motivation in their work, often just doing the bare minimum. This can come from feeling undervalued and underappreciated, or disconnected from the company’s goals, which limits creativity and productivity.
• Lack of transparency: Unclear roles, responsibilities, and poor communication create confusion and mistrust in employees. When information is not openly shared, it creates suspicion and reduces the overall effectiveness. 
• Excessive stress: Constant high-pressure environments can lead to burnout and decreased productivity. Overworked employees struggle to maintain their physical and mental health, bringing long absences and low work quality. 
• Pervasive office gossip: Rumors and back stabbing lower trust and create a hostile environment. This negative communication fosters a culture of suspicion, worsening team cohesion. 
• High turnover & absenteeism: High rates of employees leaving or being absent can signal cultural issues. These patterns show dissatisfaction and disengagement, which can be costly for the company in terms of lost talent and recruitment. 
• Fear-based leadership: Management uses fear to control employees, leading to a lack of trust and innovation. Employees may feel intimidated and reluctant to share ideas and feedback, which brings less growth and creativity.
• Favoritism: Unequal treatment, wage gaps, lack of DEI, or inconsistent enforcement of company policy can bring a toxic atmosphere. This preferential treatment can demoralize employees who feel overlooked and underappreciated, leading to lower morale and engagement. 

The high cost of a toxic workplace

American employers are losing a staggering $777.9 billion due to employee disengagement, with an additional $136.8 billion directly attributable to turnover tied to workplace injustices—totaling over $917 billion as the cost of toxic workplaces. (State of Workplace Injustice)

A toxic work culture is not only harmful to employees but also costly for businesses. Beyond the financial impact, toxic environments lower employee morale, leading to poor productivity and innovation. Companies with toxic cultures also struggle to attract and retain top talent, worsening their competitive disadvantage. The impact includes: 

• Reduced employee engagement
• Higher rates of burnout
• Higher absenteeism and turnover
• Decreased psychological safety
• Widespread depression and anxiety
• Pervasive feelings of negativity
• Higher company expenses
• Increased interpersonal conflict

How HR can combat a toxic culture

Find the root of the problem

Hold regular employee surveys to gather honest feedback and address the underlying issues. By understanding the specific problems within the workplace, HR can tailor solutions to address them effectively. Employee Surveys can provide valuable insights and create a more open dialogue between employees and management. 

Put your people first

Promote openness and transparency through HR policies and initiatives that prioritize employee well-being. Using programs that support mental health, diversity, equity, and inclusion can create a more supportive environment. HR policy management solutions can help structure and communicate these initiatives effectively. 

Check-in regularly

Maintain regular and clear communication between HR and employees with robust performance management systems. Regular check ins and feedback sessions can help ensure that employees feel heard and valued. Performance management tools facilitate ongoing communication and performance tracking. 

Hire the right people

Focus on better recruiting and onboarding practices to ensure new hires align with the company’’s values and culture. A thorough and thoughtful hiring process can help build a cohesive and positive team. Recruiting and onboarding solutions streamline this process, ensuring a good fit from the start. 

Recognize and reward

Implement systems like kudos and employee engagement programs to acknowledge and reward employee contributions. Regular recognition can boost morale and reinforce positive behavior. Employee engagement platform offers various ways to celebrate and reward employees.   

Promote work-life balance

Encourage a healthy work-life balance through flexible work policies and support. Providing options like remote work, flexible hours, and wellness programs can help employees manage their personal and professional lives more effectively. Work-life balance solutions support the creation of these flexible prices. 

Training & career development

Use a learning management system to offer continuous training and career development opportunities. Investing in employees’ growth shows commitment to their success and enhances their skills. Learning Management System (LMS) offers a comprehensive platform for ongoing education and training. 

Better conflict resolution

Develop effective conflict resolution strategies to address and resolve issues promptly and fairly. Creating a clear process for handling disputes can prevent escalation and maintain a peaceful work environment. 

Discover how Netchex can help your HR team recognize and address a toxic workplace: