7 signs of a toxic workplace, and what you can do

“Being a great place to work is the difference between being a good company and a great company.”

–Brian Kristofek, President and CEO, Upshot

A toxic workplace is often given as the reason companies make the news for unethical business practices, poor customer service, or scandals. The leader is always blamed. Where abuses are common, you can bet that the company culture itself has been ignored, or behaviors were rewarded, that let the issues fester.

Most leaders want to know when their workplaces are becoming toxic in time to do something about it before an unfortunate event happens and it becomes public knowledge. There are signs that help identify a toxic workplace early, so you can do something about it.

A quick note from LH Agenda…
Did you know our award-winning planners and journals are designed in collaboration with industry experts? They feature mindset, productivity and leadership content to inspire and empower you.

LH Agenda LH Planner

1. The leadership team doesn’t work well together

Your leadership team is the best indicator of how your employees are doing. A dysfunctional leadership team will cause your entire culture to suffer. A poor team is easy to spot: lack of collaboration, lots of complaining, missed meetings, and generally a bad attitude. Employees often take their attitude from their leader. A healthy workplace culture begins with the leadership.

What you can do: If these leaders work for you, know that it won’t get better by itself. Set clear expectations on attitude and behavior, and take steps to remeasure it within a short period of time. Before you replace a leader, you may want to try coaching, or probation. That person will likely get better or move on.

2. Employee competition is all internal

In the movie, The Paper Chase, a famous line was “Look to your left, look to your right: one of you won’t be here next year,” which was the greeting for incoming students at Harvard Law School. Healthy competition is good, but when leaders set up internal competition that keeps them from pulling together, it will do more damage than good and discourage a strong team. This kind of competition is sure to lead to a toxic workplace.

What you can do: Reframe the competition to your real competitors external to the organization. Ensure the team knows their common purpose, are clear on what you want to achieve, and what the external forces are working against your goal (other companies, developing technology, etc.). Talk in “we/us” terms and redirect their energy to unify around the common goal.

3. Managers don’t handle bad behavior and performance

One result of a high-pressure environment and too much to do can be ignoring bad behavior (cheating, harassment, stealing, etc.) or poor performance (missed deadlines, poor work, rudeness to customers, etc.). When employees think it’s an acceptable part of the work culture, the behavior spreads. This is how organizations end up in the news alleging unethical business practices and loss of customers.

What you can do: As the leader, realize that bad behavior won’t get better, but it will poison the reputation of the entire team. Set expectations on integrity and ethics, and communicate them clearly. No matter how busy you are, conduct regular meetings with your team to keep up with their challenges, and model integrity openly. When employees know your expectations, they will try to meet them.

A quick note from LH Agenda…
Are you tired of unproductive meetings? Let our Meeting Notebook help make your meetings work.
LH agenda Meeting Notebooks

4. Managers don’t promote based on merit

It is a normal human trait to promote people you like to be around, and difficult not to have your favorite employees. When managers only promote those employees they like, and good performers are ignored, however, you eventually lose your best employees. What remains are those loyal only to that manager–and a toxic workplace.

What you can do: As the leader, ensure you and your managers communicate to employees how to work their way up the ranks. An objective system should be in place to measure an employee’s performance against standards that are clear to all employees. Managers should be able to justify promotions on that objective system.

5. People are excluded from input on decisions

People want to come to work and contribute in an open and trusting environment where they are asked for ideas. employees In organizations where some employees are included and others are not, resentment and bitterness will develop, and lead to a toxic workplace. Excluded employees disengage from providing the best ideas for the good of the company, and waste valuable resources.

What you can do. Are some employees excluded from important decisions, when other employees’ ideas are solicited? Are workers who work remotely given a fair opportunity to be included in team discussions? If not, set up a process to ensure this happens. Not only will your employees be happier and more productive, but you will get better ideas than if only a few employees provided input.

6. A toxic workplace has unhappy customers

Customer service has always been an important part of developing brand loyalty, but in today’s internet and social media environment, disgruntled customers can spread the message much quicker than ever. By the time a company realizes they have a lot of unhappy customers, they can bet their culture is already toxic.

What you can do: As the leader, do you have a process that gives honest feedback on what your customers think about your company? If not, develop one that gives you this valuable feedback, so you can take action. Bad news doesn’t get better with age, so addressing customer issues early will keep them from getting worse.

7. Turnover rate among employees is high.

Current estimates are that it costs companies about 20 percent of annual salary to replace a mid-level employee. When companies have a high turnover rate, it adversely affects their bottom line. Although many factors contribute to a high employee turnover, poor management and a toxic workplace top the list. According to a study by Gallup, there is a strong correlation between a competent manager and employee engagement.

What you can do: As the leader, know your turnover rate and the reasons why employees are leaving. Are you keeping your best employees? Are they generally happy and productive? Knowing these answers can help you evaluate what changes should be made.

As an employee, if you are working for a company with these signs, consider it a warning. Great companies rarely have great dysfunction. While changing positions is not always an option, decide what you want to gain from this job, learn what you can, and prepare a backup plan. Working in an environment with a dysfunctional environment is a sure way to stunt your professional development.


Susan C. Foster is an Executive Coach, former NASA and Army executive, and a recovering 24/7 workaholic who believes everyone can learn to be a great leader. She is the author of the book, It’s Not Rocket Science: Leading, Inspiring, and Motivating Your Team To Be Their Best. You can reach her at www.susancfoster.com.