We all know the classic types of toxic employees. The gossipmonger, the manipulator, and don’t forget the loudmouth, who takes credit for everybody else’s labours and somehow ends up in management.

These are some of the stereotypes of toxic employees into which we try to sort the people who make the daily grind a true ‘grind’. But really, a stereotype is all it is, says Mark Shaw, CEO of Neos HR. For almost three decades he’s worked with organisations to solve their people problems.

“I would argue that you shouldn’t try and put these people into boxes,” Shaw says. “Instead I would argue strongly that the toxic employees are predominantly people who are not engaged. That might be because of a specific management problem, or it might be simply because management has not perceived what is happening as a management problem.”

Shaw gives an example of a staff member whose behaviour has gone sharply downhill and who has also regularly been absent from work. As a result, his department is suffering all types of problems and discussions begin about how to remove him from the business. After managers finally talk through the issues with the individual, they discover his father has cancer and is dying.

“Is that a toxic employee? I have to say no,” Shaw says. “But was he a bad apple at the time because he was causing a major management problem? Yes.”

Identifying toxic employees

Why is it so difficult for organisations to identify the problem people? Bernie Althofer, managing director of EGL I Assessments, says people who cause such problems are only allowed to roam free because of a particular type of organisational culture.

“Really good organisations encourage people to work together,” he says. “They have a good blend of diversity and a strong health and safety culture. They have an openness and transparency where they allow people to raise issues without being criticised. They deal with minor complaints promptly and they have an underpinning belief in respect and dignity.”

David Arkell, HR leader at GE, describes his own organisation as one that has just such a culture. This allows the business to see a clear difference between people with serious compliance and integrity issues – and those who are simply struggling to fit in.

“Anybody can raise a concern confidentially about anything at a global level,” says Arkell. “That gets fed back down through the organisation for investigation, and we investigate everything. We don’t do any triaging of issues. If an employee raises a concern about another employee over a compliance issue, we will investigate. If an employee raises a concern about their manager in the organisation and their potentially inappropriate behaviour, bullying, harassment etc, we have a very transparent and open process, much more so than I’ve seen in many other organisations.”

Shaw likes to draw an analogy with dentistry when considering toxic employees in a company.

“When a patient is suffering tooth pain, the goal is to fix the pain, not remove the tooth.” Only in those rare circumstances where a fix isn’t possible is a tooth removed, he says.

What can counterproductive behaviour cost the business?

A toxic employee costs the business at least the equivalent of the individual’s salary – and likely more, Shaw says. In order to explain, he uses the example of a badly behaved accounts payable person being paid $50,000 annually.

“As this individual is not highly paid, you might consider that their behaviour is less of a problem,” Shaw says. “But if you have someone in that role who is toxic, who gossips and bullies and so on, then firstly, everybody wants to avoid them, but they can’t get their accounts paid if they avoid them permanently; secondly, they’re spending a large portion of their time running around being a nuisance, so are not really doing their job; and finally, their manager, who is on $200,000, is spending 20 per cent of their own time – often more – trying to solve the problem.”

Other costs that are more difficult to measure include lowered productivity, higher employee turnover, increased absenteeism and presenteeism, adverse publicity and loss of employer brand (leading to attraction and retention issues), workplace accidents and security issues.

What to do with toxic employees

A full investigation to understand precisely what is going on, with all parties interviewed, should be carried out prior to action being taken. Such an investigation can have complicated outcomes. For instance, often the root cause may be outside the control of the person’s manager, Althofer says. In these cases, managers must report up the line until those with responsibility for the specific hazard are made aware of the issue and are compelled to act.

(For a more thorough explainer of workplace investigations, read our guide.)

The commitment of top management is essential in solving behavioural issues in the workplace and ensuring they do not become regular occurrences, Shaw says.

“Once you have correctly identified a bad apple by their behaviour, start identifying and articulating the management problem,” Shaw says. “Once you do that, the pain is in the past. Then it’s simple – your goal is to turn the employee’s behaviour around and if you can’t, then you terminate.”