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Is Your Star Employee Costing You More Than They Are Worth?

Is your best-performing employee also the least liked person on the payroll? Do you field complaints about a certain person’s behavior or attitude from other employees? Even worse, do you notice employees changing teams, positions or even leaving the company to avoid working with this person?

Whether it be your prodigy developer, the top-performing sales rep, or your visionary marketer, if this person creates a toxic work environment, they could be doing more harm than good.  And that includes harm to morale and your bottom line. A working paper from Harvard Business School, economist Dylan Minor and Michael Housman, chief analytics officer at Cornerstone OnDemand, explores the cost (in actual dollars and cents) of keeping toxic workers around, even if they are top-performers.

The study finds that a top 1% worker can return $5,303 to a company through increased output, but a ‘toxic’ employee can actually cost a company $12,489. In an interview with the study’s co-author Dylan Minor, HREOnline.com discussed the findings of the research and what it could mean for your workforce.

According to Minor, “The value of the superstar is that he or she is producing more work than the average person. So you have to pay them more, but their increased productivity should more than make up for this, which means increased net profit. I call the superstars the top 1 percent of employees. How much additional profit are they netting the firm over the course of a year? The answer we came to was $5,303. So that’s the positive. In contrast, toxic workers come with liabilities. Specifically, when a toxic worker arrives, people start leaving the company because they don’t want to be around this toxic person. And this is a cost that’s pretty easy to measure. The cost of turnover, which includes finding and training a new worker, is well-tracked by all 11 companies we studied. These figures allowed us to estimate the annual cost of a toxic worker, just through increased turnover, as more than $12,000 per annum.”

TRACOM’s director of research Dr. Casey Mulqueen says it’s not uncommon for high-performers to also be highly problematic.  “People often are promoted for their functional expertise or technical skill. So many people focus on building and applying those skills.   But as they move up in an organization or move to a new position, those functional skills actually become less important than leadership and communication skills. So successful people need to develop these Versatility skills.”

“People in more senior positions receive less constructive feedback because of their seniority,” Mulqueen says.  “So it can create a negative cycle of behavior and reinforcement.”

An organization’s HR executives can play an important role in preventing and correcting toxic behavior.  Programs that teach behavioral style should be included in all managerial level training curricula.  Similarly, the use of multi-rater feedback such as the SOCIAL STYLE Profile for Managers help leaders see how they are viewed by peers, customers and members of their teams.  In many cases, they may never have received such input.

These training options can help organizations reap the benefits of their top performers without having to accept the negative impact that they might otherwise bring.  Having employees with emotional intelligence skills is substantial to running an effective company. Rude behavior is contagious, and without having  knowledge and training in interpersonal skills, your workforce could erode.

Still not ready to part ways with your high-earning sales rep? The good news is that our brains are much more flexible than previously thought, and skills in behavioral style can be acquired through proper training and education.

TRACOM’s SOCIAL STYLE Model looks specifically the various types of behavioral preferences people may have. This includes both the ways in which people feel comfortable in behaving and the ways in which people prefer to be treated.  Applying this understanding to your everyday interactions is known as Versatility.

Want to learn more about SOCIAL STYLE? Click here to learn more about the SOCIAL STYLE Programs and Products or read other SOCIAL STYLE Research here.

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