How to Transform Your Culture From Toxic to Peak Performance Employees agree to a code of conduct. You are not the bad guy for enforcing it.

By Dr. Malachi Thompson III

Opinions expressed by Entrepreneur contributors are their own.

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The losses incurred from not discarding the bad apple that then spoils the others in the fruit bowl metaphorically rings true when it comes to dealing with toxic workplace cultures. The mental, emotional and financial costs of not managing the bad apple(s) can be colossal and sentence a business culture into irrevocable ruin.

Related: Creating a Business Culture That Values People

Professors Christine Porath and Christine Pearson surveyed 14,000 CEOs, managers and employees to explore the impact of abusive and uncivil behavior on employees. They found:

  • Almost 50 percent of employees decreased their work effort and intentionally spent less time at work
  • 38 percent "intentionally decreased" the quality of their work
  • 25 percent of employees treated uncivilly admitted to taking out their frustrations on customers
  • 12 percent left their jobs.

Together, Harvard Business School researcher Dylan Minor and Michael Houseman of Cornerstone on Demand calculated the financial gain of dodging a toxic hire is $12,500 -- more than double the savings a star performer might bring to a business, at about $5,300. More alarming are Randstaad's findings that 60 percent of employees reported having left -- or would leave -- a job because they didn't like their direct supervisors.

Toxic workplace cultures exist because leaders allow them to. Despite the alarming statistics, these studies tell us where and how change needs to start. It's just as much about dealing with toxic behavior as it is equipping those with quality support who are affected by it.

1. Collaboratively establish principles of conduct and regularly enforce them.

It's not enough to dictate to people the rules of engagement at induction then shelve the policy until circumstances turn awry. Regularly review and revisit your codes of conduct in team meetings, mass communications and updates. Facilitate group discussions and create safe forums which protect individuals in their raising concerns.

Create different ways that allow all your team members to participate. Proactively discuss and regularly circulate clear examples of what's ok and what is not ok. Create black and white rules in gray areas.

Don't only address toxic workplace behavior when it happens. When non-civil behavior bares its head, you're not reprimanding them personally. You're asking them to explain their contradictory actions toward the team's agreed contract of conduct, one which they decided to agree with in the first place. It becomes a much easier conversation to have; the individual performance manages him/herself.

Leaders of high-performance work cultures intentionally train and practice having performance management discussions. When you've cultivated an effective process, confrontation becomes easier and commonplace.

Related: Why Every Business Needs a Culture Deck -- And How to Create One

2. Make space to manage the negative impact of toxic behavior.

Expecting anyone who's been subject to toxic workplace behavior-- yelling, micro-managing, undermining, isolation, discrimination and/or harassment, bullying -- to get over it and get back to work is unreasonable and poor leadership. You put your people in grave danger by expecting them to put their emotions to the wayside. Research illustrates the deleterious suffrage -- not to mention proof of our own lived experiences -- unmanaged toxic behavior can inflict upon our physical, mental and emotional health not just at work but in our personal lives.

You don't need to become a counselor, but you need to coordinate support for those affected to process what they have been hit with, directly or vicariously. Engaging strategies that support your people to emotionally resonate and inject their best energy into their work, you're likely to harness their best performance.

Employee assistance programs (EAPs)

High-performing businesses such as Virgin and Flight Centre engage a variety of employee assistance programs (Career Money Life and Healthwise Global respectively) to support their employees globally. Support focus is not just remedial, like financial planning, relationship counseling and legal services. Wellness services and education is proactively encouraged to protect and promote high performance.

Train people to argue, negotiate and transform conflict.

Teach your people skills to argue artfully, listen then respond, learn to persuade and influence rather than use bullying or untoward manipulative tactics. Give them the tools to take the higher road. Any resistance will clearly demonstrate an unwillingness to contribute to productive performance and workplace culture.

Don't provide such programs only to those who are victimized. Teach them to everyone.

Educate your people to create adequate space and time to process emotional and mental baggage, not unleash verbal diarrhea. Show them to listen and respond appropriately with a problem-solving focus. Set behavioral standards of listening to and respecting differences without all parties having to agree. It's not about winning all the time. For those whom it is, how that urge is not conducive to team cohesion can receive deeper exploration.

Related: When It Comes to Creating a Great Company Culture, Think Back to ... College

3. Find ways to value and recognize everyone.

From the lowest level employee to the CEO, every individual needs to receive equal opportunities to perform their best in their role. Investing time to discuss the goals and ambitions of your receptionist and set action plans in progress should receive as much focus as the senior partner who's in grooming to become managing director.

Be wary that formal recognition programs can lose their potency. Not everyone wants a bonus or a tangible token of appreciation. Express thanks and gratitude to your people in ways that speak directly and are meaningful to them. Some want more time off to have quality time with their family. Others might want your quality time to discuss their work or personal topics of mutual interest.

When you focus on increasing enriching experiences for your people, you inspire them to perform at their peak without you requesting or pushing them to. Regularly putting premium fuel in their emotional and mental tanks can be simple and inexpensive:

  • Invite their individual opinions and perspectives because you genuinely value their ideas
  • Respect and let them know it is safe for them to disagree
  • Provide illustrative feedback as to what was or was not done well
  • Cheerlead, elevate and challenge them to think bigger and stretch
  • Be consistent with efforts that recognize their individuality

Recognition that sparks an emotional resonation will reinforce and sustain high performance. Token rewards temporarily congratulate it.

Wavy Line
Dr. Malachi Thompson III

Entrepreneur Leadership Network Writer

High-Performance Consultant

Dr. Malachi Thompson spent more than a decade leading and developing high-performing military teams. He is the founder of Champion Leaders. He teaches proven strategies to help entrepreneurs and leaders activate their genius, lead in their field and impact the world.

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