If You Follow the 2X Rule of Toxic Employees, Harvard Research Shows You’re a Better Leader Than You Think

Superstar employees are invaluable. As founding owner of the Pittsburgh Steelers Art Rooney once said, “You can never overpay a good player. You can only overpay a bad one. I don’t mind paying a good player $200,000. What I mind is paying a $20,000 player $22,000.”

Great employees? They’re worth a lot more to your teams, your customers, and your bottom line than average employees.

Truly exceptional employees? They’re worth significantly more than average employees.

According to a 2015 study published by Harvard Business School that analyzed data on approximately 60,000 workers, hiring a superstar — defined as a “top 1 percent” employee — will save the average company $5,303.

Yet avoiding a toxic employee — defined as “a worker that engages in behavior harmful to an organization, including either its property or people” — will save the average company $12,489. That figure doesn’t even include “savings from sidestepping litigation, regulatory penalties, or decreased productivity as a result of low morale.”

So why do superstars tend to get all the attention? For one thing, truly exceptional employees stand out, both in the workplace and as the focus of research.

According to the study’s co-author, “Most of the work in organization design and human resource management has been focused on what I would say are ‘positive outliers’ — the really top performers.”

Yet the behavior and impact of toxic employees tends to be more “infectious.”

Toxic people cause other employees to leave an organization faster and more frequently. Toxic people negatively impact the productivity of those around them. Toxic people can even turn good employees into bad ones. According to the study, “If you are exposed to these toxic workers, then you become more likely to ultimately be terminated later on.”

A team with great players and a decent coach will almost always beat a team with decent players and a great coach.

That’s why the best college coaches are, first and foremost, great recruiters.

Where teams are concerned, the impact ratio is 70 to 80 percent employees, 20 to 30 percent leader. The bigger the organization, the greater the difference in the employee/boss impact ratio. If you have four employees, it’s relatively easy to make a significant impact on their morale, productivity, and work.

If you have 400 employees…

Spend time developing individual employees, building team cohesion, creating an innovative culture, driving performance, focusing on results… all the things leaders every employer values.  

Spend a a little time identifying and recruiting talent you will someday add to your team. (Just as the best time to look for a new job is when you don’t actually need a new job, the best time to start looking for a superstar is when you don’t have an opening you’re desperate to fill.) 

We can all spot terrible employees: They under-perform. They don’t work well with other employees. They struggle to meet expectations.

But as the study shows, the obviously terrible employees may not cause the real problems.

It’s easy to spot — and deal with — the issue when an employee is clearly not the right fit. 

The real problems are caused by employees who appear to be doing a satisfactory job but are actually what a friend once called an “insidious cancer” that slowly destroys the performance, attitude, and morale of other employees.

How can you spot a seemingly satisfactory yet ultimately toxic employee? The study points out three three key predictors.

• People who are extremely self-focused and even selfish. The less you consider others, the less you worry about whether your actions or attitude negatively impacts others.
• People who are unusually confident. Belief based on nothing but belief is arrogance,  and unfortunately, research shows arrogance is infectious. (On the flip side, so is humility: This Duke University study shows that the more willing you are to entertain the possibility you might be wrong, the better choices you tend to make.) 
• People who constantly say rules must always be followed. For one thing, doing the right thing sometimes means bending a process, guideline, or best practice. Plus the study shows that people who say “I never break the rules” are much more likely to be terminated for breaking the rules. (Call it the “doth protest too much” syndrome.)

Bottom line? Consistently hiring great employees — much less consistently hiring superstars — is impossible. As Netscape co-founder Marc Andreessen says, “If you are super-scrupulous about your hiring process, you’ll still have maybe a 70 percent success rate of a new person really working out — if you’re lucky.”

Be thorough, thoughtful, and deliberate when you make hiring decisions. Be even more thorough, thoughtful, and deliberate about dealing with toxic employees.

Because that might make an even bigger difference on your bottom line.