The problem with toxic cultures isn’t that they aren’t sensitive to claims of workplace problems, but rather that they’re protective of the wrong people – with Macquarie Bank seeming like it might be the most recent example.

A common thread for many companies accused of a culture of bullying and sexual harassment is a belief in success above everything else, and an employee reward structure reflective of that belief. It’s been the case with Uber, Fox News, and recently Macquarie Bank.

At the investment bank, the accusations of a toxic work culture have emerged during a planned class action against them. As reported in the Sydney Morning Herald, lawyers representing the investors involved in that class action sent a 26-page letter to Macquarie and ASIC. The document takes specific aim at the bank’s predatory culture.

“That culture led to a workplace defined by behaviour such as rampant drug taking leading to reckless trading after lunches, sexist and chauvinistic behaviour, including an adviser engaging in predatory behaviour towards a female staff member and Macquarie choosing not to terminate that adviser because of the amount of commission the adviser earned,” the letter said.

Seemingly corroborating this indictment, in the Sydney Morning Herald story, several former Macquarie employees revealed that “desk assistants were regularly preyed upon by several brokers, who were never held to account”.

Though none of the people accused of wrongdoing are still with the company, the accusations aimed at Macquarie describe behaviour that is beyond obnoxious. It includes claims of employees taking a photo up the skirt of a female manager, stalking of a female staff member outside of her home, and a male employee being bullied and having his drinks laced with laxatives and valium.  In all of these cases, the company is being accused of having done little to nothing in response.

Protecting the wrong people

The ultimate reason why any business exists is to make money. So there’s a crude logic in protecting the employees who are the best at creating value from any accusation that might see them leave, regardless of how damning the accusation. Indeed following that logic, the worse the accusation, the less proportional your response can be.

But there is a withering effect of protecting high performers who behave badly, and leaving everyone else vulnerable. This effect extends to the organisation’s other employees and, in the longer term, the company’s reputation. High turnover, greater difficulty in hiring top recruits, and rejection from outraged customers are all possible outcomes.

In fact, the evidence that Uber’s scandal-ridden year has damaged its business has already arrived. Their market-share in the US is down, dropping three points in the period since former engineer Susan Fowler wrote her viral blog post – which included details of a sexual harasser going unpunished despite repeated accusations from several women.

The business case for punishing high performers with low values

It’s not HR’s role to receive and handle every claim of bullying and sexual harassment – in most organisations this would fall to the manager. But if a pattern is emerging company-wide, or a manager is refusing to take appropriate action against severe allegations, HR should step in.

But how do you make a case that you should punish and potentially fire people who are demonstrably worth so much to the company?

“The hardest people to deal with in the workforce are high performers who exhibit low values,” says AHRI Chairman Peter Wilson. “People love the high performers. They’re adding lots to the bottom line. What they don’t realise is that when the high performers with low values get caught, the bottom line value turns around the other way.”

Wilson says you have adopt a risk management approach, and offered the following advice:

• Raise the alarm with the senior executive groups of those responsible for the bad behaviour and get a sympathetic voice.
• Research past cases, finding out how much they cost companies in terms of legal fees, settlements, reputational damage and so on.
• Present what’s happened so far in your organisation and parallel that with what’s happened to other organisations. “Tell them, the precedence in law is this,” Wilson advises, “This is the path we’re on, this is the game we’re playing. If it goes unheeded, then these are the costs we face potentially.”
  

But sometimes you cannot get a sympathetic ear from the organisation. What should you do then? Wilson is blunt, “Most employers will understand it. If they don’t, HR should keep a record of what they’ve said and to whom and when. Get ready for the inevitable.”

Discover how you can transform your workplace at AHRI’s Inclusion and Diversity Conferences in Canberra on 26 October and Melbourne on 2 November. Register online.