Tackling toxic bosses

  • Date:01 Oct 2012
  • Type:Company Director Magazine
Michelle McQuaid details the cost of bad managers to organisations and what directors can do about them.


As a member of several boards, I was shocked to recently learn the cost of "toxic bosses" on organisational productivity and profitability. It occurred to me that not once in all my board briefing papers had I ever seen a single indicator about the quality of relationships between bosses and employees.

Current estimates suggest poor relationships between staff and their managers cost economies around $360 billion each year in lost productivity. Yet, spotting bad bosses is no easy task and without anonymous measures for employees to safely share their experiences, as board members we’re only likely to find out when the abuse becomes so bad the organisation – or us as directors – are sued.

How to spot a toxic boss

Unfortunately, abuse doesn’t have to be so extreme to turn a model employee into an organisational nightmare. The Harvard Business Review reports that researchers have found even basic incivility and rudeness is enough to cause employees to deliberately decrease the quality of their work and negatively affect their performance. All it takes is an encounter like one of these:

  • "My boss asked me to prepare an analysis. This was my first project and I was not given any instructions or examples. He told me the assignment was crap."
  • "My boss said: ‘If I wanted to know what you thought, I’d ask you.’"
  • "My boss saw me remove a paper clip from some documents and drop it in my wastebasket. In front of my 12 subordinates, he rebuked me for being wasteful and required me to retrieve it."

In retaliation to rude or mean-spirited bosses, employees have been found to turn "negative and unproductive", gossiping rather than working, stealing, backstabbing and taking longer breaks. They are also three times less likely to make suggestions or go out of their way to fix workplace problems.

So how as board members do we spot toxic bosses?

I believe every organisation should offer employees an anonymous means of rating their boss’s performance to bring transparency to what’s happening day after day in the organisations we govern. Further, to ensure accountability for their actions, the results should be openly published in a leadership league table tied to eligibility for promotion or bonuses.

Sound extreme? You may feel differently after you take a look at the costs of toxic bosses.

The hidden costs of a toxic boss

Three out of every four people report their boss is the most stressful part of their job. Given most employees endure a difficult boss for around 22 months, that’s plenty of employees and plenty of time to allow the costs to add up.

At a personal level, the constant levels of stress and negativity that result from working for a bad boss can undermine employees’ performance, damage their health, destroy their relationships and leave them feeling depressed and anxious. No wonder unhappy employees take more sick days, staying home an average of 1.25 more days a month, or 15 extra sick days a year.

At an organisational level, one company decided to deduct from a boss’s salary the financial costs incurred by his bad behaviour such as: anger-management classes, legal fees to adjudicate complaints, time spent by senior management and HR professionals fretting over his misdeeds and the cost of hiring and training a series of people who worked under him. The total in one year? Some $160,000!

Surely all directors should want to see a "Good Boss Rating" on every company score card to highlight the health of leadership within the organisations they are governing.

Proven ways to improve toxic bosses

The good news is that most bad bosses are good people doing a bad job because they lack the mindset, skills and experience to bring out the best in their teams. New studies in positive psychology have found that while there is no one magic formula for being a great boss, there are five proven, practical approaches anyone can be taught:

  1. Boost positivity: Research has found if people are having fun, they’re going to work harder, stay longer, maintain their composure in a crisis and take better care of the organisation. Simple interventions like starting meetings with "what’s going well?" and taking the time to personally thank people for their efforts can shift the mood of a team.
  2. Engage their strengths: Employees who have the opportunity to use their strengths – the things they enjoy and are good at – are six times as likely to be engaged in their jobs and more than three times as likely to report having an excellent quality of life. It takes only 20 minutes to use a free tool like the VIA Survey (www.viame.org) to find out when your team is at their best.
  3. Cultivate good relationships: Socially connected teams enjoy lower absenteeism and turnover rates and increased employee motivation and engagement. Taking the time to respond actively and constructively to people’s good news and investing in casual social opportunities during office hours helps people to feel safer within a team.
  4. Encourage a sense of purpose: Workers who have a clear sense of purpose about their roles and feel connected to something larger than themselves gain greater happiness and satisfaction from their job. Helping managers understand the need to provide role clarity and a sense of meaning for employees enables them to perform with greater dedication and better results.
  5. Recognise and celebrate accomplishments: For all of us, pleasure comes as much from making progress towards a goal as it does from achieving them. Teaching managers to provide specific, deliberate and immediate recognition around big and small accomplishments can be even more motivating than money.

As a director, is your board doing enough to provide your bosses with proven knowledge, skills and training to help them perform better?

When a toxic boss takes it to extremes

Unfortunately, there is a very small group of bosses, about five out of every 100, who may be suffering from a psychological disorder that causes long-lasting, uncontrollable emotional disregulation. People who are diagnosed as psychopaths or borderline personalities – to name just a few of the disorders – suffer from inflexible and pervasive patterns of thinking, which impairs their abilities and causes them serious problems. The symptoms of each disorder vary, but the common element appears to be the diminished ability to empathise with others – to feel what another person is feeling – which enables them to perpetrate their acts of cruelty.

The biggest challenge with these disorders is often the boss involved has not been diagnosed. Unaware of the neurological and psychological challenges they’re facing, they receive no support or medication (if appropriate) to manage their thought patterns. While many of these disorders are permanent and incurable, most can also now be managed with varying degrees of success provided their bosses are aware they have a neurological condition they need to monitor.

Even for these extremely toxic bosses, however, it would be difficult as a director, without formal complaints from courageous employees, to spot these leaders without an anonymous employee rating system for managers in place. Bosses with a psychological disorder will consistently rate poorly no matter what support is provided because of the biological challenges they face.

If you suspect one of your managers is significantly low in empathy and high in erratic behaviours then they may be in real need of medical help, so be sure to consult an organisational psychologist on how to move forward.

Why it pays to have good bosses

People don’t quit organisations, they quit bad bosses. Perhaps of even greater concern, however, is that before they quit, 56 per cent of people with crummy bosses report they are "checked-out" and "sleepwalking through their days", while the most bitter 18 per cent who are actively disengaged undermine their co-workers’ accomplishments.

Smart companies have cottoned on to the fact that cultivating, recognising and rewarding good bosses is good for business.

For example, when the Gallup Research Organisation asked 10 million employees around the world if they could agree or disagree with the following statement: "My supervisor, or someone at work, seems to care about me as a person," those who agreed were found to be more productive, contributed more to profits and were significantly more likely to stay with their company long term.

Other studies have found that employees with strong ties to their bosses bring in more money than those with only weak ties – beating the company average by $588 of revenue each month.

Isn’t it our duty as directors to request our organisations establish the most basic of measures around the performance of bosses? Shouldn’t we show we care?

Michelle McQuaid is a positive psychology expert and author of 5 Reasons to Tell Your Boss to go F**k Themselves: How Positive Psychology Can Help You Get What You Want. She is also a director of The Reach Foundation and Play For Life