Avoiding a toxic worker enhances performance and costs less than replacing an average worker with a superstar — even if the superstar performs in the top 1% of employees.
While a great deal of attention has been paid to the performance and cost advantages of hiring superstars, less attention is paid to employees at the other end of the spectrum: toxic workers who undermine the organization’s productivity and incur significant costs regulatory and legal liabilities.
New research shows that avoiding toxic workers (or converting them into average workers) increases an organization’s productivity and performance more than hiring superstars. Using assessment, job history and performance data from more than 50,000 employees in 11 firms, the researchers first identified toxic workers as workers who had been terminated for sexual harassment, workplace violence, falsifying documents, and fraud and general workplace misconduct.
They then identified from the data the antecedents of toxicity. Specifically, they found that workers mostly like to be fired in the future for toxic behaviour were:
This result highlights the potential damage of toxic workers: their behaviour not only impacts their own performance but can significantly impact the performance of others.
In addition to these personal characteristics antecedents of toxic behaviour, the research also looked at environmental factors, notably 1) exposure to other toxic workers, and 2) the extent to which the workers were monitored by managers or superiors. For example, the data showed that workers exposed to other toxic workers were 46% more likely to be toxic. Generally, the researchers found that 70% of the toxic predictability of a worker was based on his or her personal characteristics, and 30% on job environment.
The performance consequences of toxicity, as revealed by the data, were mixed. For example, toxic workers tended to work faster than non-toxic workers (were thus more productive), but also produced less-quality work.
A quantitative analysis of the data, comparing the costs of a toxic worker vs. the benefits of hiring superstar performers, revealed the full extent of the damage a toxic worker can inflict on an organization. The quantitative analysis calculated
A comparison of these two calculations showed that if a company hires a superstar who performs in the top 1% of employees, the costs savings to the company would be $5,303. However, if the company avoids hiring a toxic worker, the cost savings is $12,489. In short, the benefit of avoiding a toxic worker is more than twice the benefit of hiring a superstar (or replacing an average worker with a superstar).
The quantitative analysis allowed the researchers to drill even deeper, not only looking at toxic workers in general, but at specific characteristics of toxic workers. For example, a one standard deviation increase in confidence led to $122 in saved wages to the company due to increased productivity; however, that same one standard deviation increases led to $1,327 in increased induced turnover costs. Productive or not, the toxicity of the confident workers costs the company a net $1,000.
The research was based on data from a company that builds and deploys job-testing software to large employers, and included:
Major takeaways from the research included the following:
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