Company Culture Rx: How to Fix a Toxic Culture

5 steps to putting a broken workplace back on track

In today’s tight job market, recruiting and retaining top talent are high priorities. But no matter how many perks and dollar signs you throw at superstar candidates, toxic company culture is likely to drive them away.

A whopping third of all employees plan to quit their jobs within a year – and 43 percent blame their company’s culture as the main reason they’re checking out. The environment, rules, and employee peers at your business have a major influence on whether it can grow and succeed.

Company culture is shaped by the collective experiences and behaviors in an organization. It’s obvious when it’s working: there’s an energy in the air that fosters productivity, and employees are satisfied and engaged. But poor leadership, bad hires, dictatorial management practices, and unpleasant working conditions can spark a freefall that’s challenging to correct – unless company leaders are willing to honestly address the underlying issues. A few bad seeds won’t ruin a company’s culture overnight, but it falls apart when leadership overlooks or flat-out ignores the signs that something is going awry.

It’s not just about creating a healthy work environment

Companies with broken cultures are often functioning far below the optimum level, suffering increased turnover, drops in productivity, decreased market share, and even something as serious as ethical violations. The Harvard Business Review reports that disengaged workers cost businesses 18 percent lower productivity, 16 percent lower profitability, 37 percent lower job growth, and 65 percent lower share price over time.

Here are five steps company leaders can take to get a broken company culture back on track:

1.  Own the problem. Leadership sets the tone and direction for a business and its acceptable behavior patterns. Broken company cultures almost always start with fear or lack of trust in management. A third of employees don’t report problems at work because they fear retaliation from the manager who is the source of their trouble, according to a 2018 Warble report. Even worse, nearly half don’t trust any action would be taken.

Whether the toxic culture stems from management’s direct actions or disinterested style, the first step to righting the ship is for company leaders to accept that they played a major role in creating the problem. Instead of blaming and scapegoating – which is guaranteed to make the situation worse – acknowledge that your workplace has soured and gather feedback from employees at every level on how to fix it.

Create a safe environment for honest conversations about what’s impacting people most: are employees uncomfortable sharing new ideas or approaches? Do workers respect one another? Are there flaws in the onboarding process? Establishing a “team effort mentality” and openness to feedback goes a long way toward rebuilding a broken culture.

2.  Address bullying behavior. A chronically stressful environment creates a dysfunctional company culture. But many times, employees have a hard time pinpointing the source of their dissatisfaction. The SCARF model, whose premise is that people behave in ways to minimize threats and maximize rewards, can be an effective way to start conversations with your staff and identify the main triggers that cause workplace tension. Here are the fundamental behaviors to address:

• Status. Workplace bullies abuse their authority over others, treat others disrespectfully, and publicly undermine their peers.
• Certainty. Information can be power. Employees who hoard critical information undermine team effectiveness.
• Autonomy. Micromanaging can be a major contributor to low employee morale. Invest in retraining or remove managers who have a hard time delegating or create an environment where their team feels no ownership of their work.
• Relatedness. A workplace dominated by cliques causes team members on the outside to feel like they’re replaceable or don’t belong.
• Fairness. Company leaders who consistently make decisions without input from team members, or transparency into the process or their rationale, foster a culture of secrecy and powerlessness.

3.  Recognize employee accomplishments. Nearly 80 percent of people who leave their jobs cite “lack of appreciation” as the main factor. And if employees are unhappy with their supervisor, chances are they’re contributing to lower overall morale by communicating their dissatisfaction to their peers. When done authentically, supervisors who take time to recognize staff for their accomplishments and hard work create positive results for company culture and, ultimately, staff retention.

Of course, appreciation also extends beyond recognition. A two-way flow of communication is key to ensuring that employees feel their input is valued. Critical to developing a healthy culture is how much the staff feels heard and listened to by their leaders.

4.  Create meaningful company values. Today’s employees want to work for companies whose core values align with their own. Vague values contribute to a negative culture, making it harder for employees to feel a connection to the company and fulfilled by their role.

Meaningful, actionable values your staff can identify with should feel authentic to the focus or mission of your organization. They need to be effectively communicated and offer clear direction to your staff. Everything from onboarding to performance reviews to team-building activities and volunteering should be structured to reinforce your company’s deeper values.

5.  Remember that actions speak louder than words. Your staff is watching to see how serious management is about creating a healthier culture. Quickly sharing a turn-around plan after gathering feedback about the problem is a good first step. But company leaders also need to commit substantial time, effort, and resources to ensuring that the new culture will be maintained after the initial enthusiasm dissipates.

Establishing regular timelines to reassess how things are going, integrating culture maintenance into your regular workflow, and investing in feedback-gathering tools will make it easier to spot downward trends in culture before they become a serious problem.

When a company culture goes toxic, you can’t just push a reset button and then move on to other priorities. Maintaining a happy workplace requires ongoing attention from company leaders who are willing to recognize and address their own shortcomings. A skilled HR solutions firm can help you put the fundamental elements in place that keep your company culture from crumbling.

To learn more about how to implement HR solutions that benefit your employees and improve your bottom line, contact Karp HR Solutions today for a free consultation.