Study: Dodging a Toxic Hire Is Better for Business Than Onboarding a Superstar
Companies who avoid hiring these problem employees end up saving thousands of dollars, according to the paper's authors.
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Is looking for superstar employees the chief aim of your hiring process? It may be time to shift focus, according to a working paper from Harvard Business School published in November.
A study of 11 global companies and roughly 58,500 hourly workers revealed that avoiding a toxic employee could ultimately save a business $12,500 -- more than twice the estimated financial benefit of bringing on a superstar performer ($5,300.)
Star employees, according to Harvard Business Review, can be four times as productive as the average worker, generating 80 percent of a business' profits and also serving to attract other luminary hires. The study defined superstars as those representing the top 1 percent of a company's productivity -- one that derives so much value for a firm that it would have to hire others or hike up salaries in order to achieve a similar output.
Related: How Successful People Overcome Toxic Bosses
Toxic employees were defined by the study's authors -- Harvard Business School professor Dylan Minor and employee analytics expert Michael Housman -- as those who had been fired for violating company policies such as sexual harassment, workplace violence or fraud. (They could only study toxicity, they say, in its most extreme and observable forms that necessitated termination.) The authors also point out that toxic workers "can generate enormous regulatory and legal fees and liabilities" for a business.
While overconfidence and self-centeredness are often synonymous with toxicity, the study also revealed other traits for hiring managers to be on the lookout for that may come as a bit of a surprise. Toxic employees tend to be avid rule followers, for instance, and also highly productive.
People who believe that rules should always be followed (as opposed to those who believe that sometimes rules must be broken) were more likely to be toxic, according to the study -- though researchers postulated that this was a result of prospective employees simply telling recruiters what they wanted to hear.
Additionally, toxic employees were found to be more productive in terms of overall output than the average worker. But even though these employees work faster, according to Minor and Housman, their work isn't always of a higher quality.