Crafting a strong company culture is pivotal in today’s fast-paced business environment.
So, when the company culture isn’t hitting the mark, it’s crucial to identify the signs and work on improvements swiftly.
In this guide, we’re zeroing in on examples of bad company culture, deciphering their signs, and laying out pragmatic solutions to refine them.
We’ll unravel instances where company cultures may be teetering on the negative edge and provide actionable insights to pivot them toward positivity and productivity.
Let’s dive in and explore how to turn around a struggling toxic company culture.
10 Warning Signs of Toxic Company Culture & How to Improve It?
- 1. A Lack of Core Values
- 2. Micromanagement
- 3. Undervaluing Employee Input
- 4. Not Promoting From Within
- 5. Silo Mentality Runs Rampant
- 6. Office Cliques
- 7. High Employee Turnover in Teams
- 8. Excessive Competition Between Employees
- 9. Unacceptable Levels of Employee’s Tardiness or Absenteeism
- 10. Presenteeism
- Impacts of Bad Workplace Culture
- A Good Company Culture Results In A Better Bottom Line – Conclusion
10 Warning Signs of Toxic Company Culture & How to Improve It?
1. A Lack of Core Values
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The biggest indicator that your organization has a bad culture is a lack of core values. Your company values define who you are and how you treat your customers and your employees.
If your values aren’t written down, everyone on your team will follow their instincts and beliefs about what works and what doesn’t. This lack of communication will create chaos within your organization.
Employees won’t feel connected as a team if they don’t share the same values as the organization they work for.
This lack of connection can lead to poor customer service and a lack of employee retention – which costs businesses thousands of dollars every year in hiring and training costs alone.
It’s also difficult to attract new, high-quality employees if you don’t communicate your core values during the interview process.
How to Improve Lack of Core Vales?
Positive workplace culture must come from the top down. Make a list of your core values and publish it. The set of ideals you develop for your team should be those that matter most to you and help you reach your goals.
Ensure that long-term employees, C-suite executives, and HR representatives are on the same page before promoting them.
Afterward, discuss each value with the whole team. It will create a cohesive company culture by eliciting positive behaviors and attitudes.
Incorporate sharing these values during your hiring process and ensure every new hire you onboard shares them.
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Many managers fail to realize that one of the qualities of a good leader is trusting your employees to get the job done right.
You hired these people for a reason; let them do their jobs! Micromanaging creates an atmosphere of mistrust in the workplace and hurts creativity and critical thinking.
According to the Journal of Experimental Psychology, employees who feel micromanaged perform much worse.
Moreover, an analysis conducted by Harvard Business School professor Teresa Amabile and psychologist Steven Kramer concluded that micromanagement stifles creativity and productivity.
How to Improve Micromanagement?
Trust your team to do their job! As a manager, you should focus on training and mentoring your employees rather than nitpicking their work or checking up on them constantly.
In turn, this will boost morale and productivity among your employees by reducing stress and fatigue.
Encourage open communication with your team; if an employee needs guidance, mentor them privately instead of publicly humiliating them in front of their peers.
You can also set up weekly one-on-one meetings to provide feedback and guidance without creating an atmosphere where employees fear making mistakes or reprimanding in public.
With trust comes freedom; the more free your employees are to perform their jobs to the best of their abilities, the more productive they will be.
Give them the space they need to do their jobs well, and they will rise to the occasion every time!
3. Undervaluing Employee Input
Dynamic and innovative companies never underrate the opinions or input of their employees; they welcome it with open arms.
However, some managers don’t listen when their team offers ideas to improve the company’s products or services, instead criticizing their suggestions as “not good enough.”
This behavior creates a culture of disrespect among employees and can discourage them from providing innovative ideas in the future. The result is low employee engagement and low morale, which can hamper performance and productivity at work.
When workers are disengaged from their work, they also tend to suffer from poor mental and physical health, further lowering their productivity.
It can force them to look for opportunities elsewhere where they can freely express themselves without being ridiculed for their suggestions.
How to Empower Your Team?
Empower your team to offer new ideas to improve your business continuously. Allow them to voice their opinions openly without fear of criticism or ridicule.
If you disagree with a suggestion, explain why and provide alternatives to help the employee improve the idea. If it’s a terrible idea, be upfront and tell them why it won’t help the business move forward.
You can also create innovation competitions to incentivize team members’ creative problem-solving and reward the best ideas.
Employees should feel encouraged to share their ideas and opinions with their managers and colleagues. Your company will be more engaged and innovative as a result.
4. Not Promoting From Within
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Think about it – You work hard to impress your boss so that he considers you for that regional sales director position. He hires an outsider instead of you without even considering promoting from within. It would hurt, wouldn’t it?
Most people would feel that way. That feeling of not being valued is one of the reasons why many employees leave a company.
In a recent survey, nearly half of American workers (46%) say they have left their jobs because they think they aren’t appreciated.
It’s an unfortunate reality and a negative company culture that many companies ignore until it’s too late.
How to Fix This?
You are responsible for promoting from within whenever possible as a business owner or manager. Your current staff profoundly understands your business and knows what it takes to succeed.
They understand your customers’ needs and motivations better than an outsider could, enabling them to develop innovative ways to improve the company’s products and services and drive growth and profitability to new heights.
Promoting from within the company allows your current staff to shine and expand their skillsets beyond their current roles. As a result, your employees will be able to develop leadership skills, which will, in turn, help your company grow and prosper.
Also Read: Best CRM Software Examples
5. Silo Mentality Runs Rampant
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Another notable bad company culture example that can significantly put the future of a business at risk is the silo mentality.
The silo mentality in an organization is when departments and teams work in isolation and do not share information, hampering collaboration and increasing the risk of project failure.
Silo mentality is usually a result of management style that do not encourage team building and transparent communication between teams, leading to ineffective decision-making and increased costs.
Also Read: COB vs EOD
How to Fix Silo Mentality & Encourage Team Oriented Mindset ?
Develop activities that can encourage inter-team collaboration and make information exchange seamless between departments in your company.
Reducing silos and promoting cooperation across teams and departments will ultimately boost employee morale and productivity.
Some companies even encourage employees by holding regular “huddles” for different departments to discuss issues and challenges, brainstorm solutions, and develop strategies to overcome those challenges.
Team bonding activities help employees better understand each other’s roles, build stronger relationships, and boost productivity and efficiency.
Also Read: Best ERP Software Examples
6. Office Cliques
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Office cliques serve as bad company culture examples. They are breeding grounds for a toxic work environment and can harm the mental health of team members deemed “uncool” to be a part of any clique.
The result is poor productivity, low morale, and an overall negative experience in the workplace.
How to Fix Office cliques?
You must be vigilant to fix this because office cliques are notoriously tricky to eradicate. A very effective way to combat office cliques is to talk to the alleged clique leaders about how their behavior contributes to a hostile work environment for other employees.
They may not realize they are excluding or intimidating others. Educating clique members about these potential pitfalls may help them open up their group to others and change their behavior.
Be careful not to accuse the group of anything. Instead, explain how others might feel.
You can also implement a program encouraging people to work in other office sections. A buddy system can be used to allow them to spend time with new people and get to know them better.
The goal is to create new friendships across the organization that will effectively break office cliques.
Also Read: How To Write A Mission Statement?
7. High Employee Turnover in Teams
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Businesses that want to continue scaling must ensure that they keep the turnover rate in every department as low as possible.
Any department or team consistently recording a high employee turnover rate contributes to toxic work culture.
When a team member leaves your team, they leave behind knowledge and experience that could take months or even years for you to replace.
Additionally, these departures can also harm team morale, so you must take steps to lower employee turnover as much as possible.
Also Read: Mission vs Vision Statements
How to Fix Employee Turnover?
The buck stops with the manager. One of the first things you must do is speak with team managers or team leads.
Let the head of teams refer to the company’s values and explain how high employee turnover impacts the business’s ability to uphold those values.
Ensure that they create productive work environment where team members feel valued and are encouraged to continue contributing to the team’s success.
In a Gallup study of more than 7,000 U.S. adults, half reported quitting their jobs to escape a bad boss at some point in their careers.
Holding managers accountable ensures they do not contribute to employee turnover through poor management practices or creating an uncomfortable work environment.
Additionally, managers can ask employees about their reasons for leaving during exit interviews. These meetings can help managers better understand their frustrations with your culture and which aspects they had difficulty adjusting to.
Conducting an employee survey and speaking to long-term staff also provide valuable insight into your workplace culture and determine where to start changing things in order to reduce employee turnover.
Check Out: Best Memo Examples
8. Excessive Competition Between Employees
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Working in a highly competitive environment is great for building character and developing leadership skills, but too much of a good thing can be counterproductive.
When your team feels that they are constantly competing against one another, everyone becomes focused on winning and losing, which can lead to a toxic work environment.
In highly competitive environments, people become hypervigilant, picking up on even the smallest signs of competition. These heightened emotions can take a toll on your employees over time, resulting in adverse side effects like anxiety, anger, and frustration.
How to Fix Excessive Competition?
High levels of competition among individuals may indicate an overestimation of output. Even though you want your team to be competitive and high performing, you don’t want to do that at the cost of employee well-being or losing talented team members.
This excessive focus on winning and losing can negatively affect team morale and company culture.
Consider adopting non-monetary-based rewards. For example, if a team wins an internal contest, they may get a pizza party or another modest prize.
If a team loses, consider implementing a “debriefing” session where the group discusses how they could have improved their chances of winning next time. Reinforce the importance of working as a cohesive unit rather than as individuals to help boost teamwork and overall company morale.
Check Out: Best Exit Interview Questions To Ask
9. Unacceptable Levels of Employee’s Tardiness or Absenteeism
One glaring sign of bad company culture is employees consistently arriving to work or meetings late or even not showing up at all. These are colossal examples of employee disengagement.
If employees are not committed to their work, chances are they are not committed to your company.
It’s important to note that this doesn’t necessarily apply to all cases of chronic absenteeism; sometimes, the employee may be legitimately sick or have a family emergency that requires them to be absent from time to time.
However, if an employee habitually shows up late for work without a legitimate excuse, it must be addressed immediately.
Allowing this behavior to continue unchecked can damage your company culture and create a negative impression among employees and customers alike.
Not only are chronically tardy employees bad for business, but they are also bad for employee morale.
Chronically tardy employees are unmotivated individuals who don’t care about their job duties or the well-being of their team or organization.
How to Fix This?
You must also ensure managers and other mid-level executives are not in the habit of being tardy or absent from work.
It is especially critical to address chronic absenteeism at the management level because their actions influence other team members and set an unacceptable example for employees to follow.
If your management team is frequently absent from work, other employees may follow suit and begin skipping out on meetings and other important events.
Furthermore, work with HR department to ensure that employee absences, sick days, and doctor appointments are managed efficiently.
You want employees to be regularly present at work and reasonably do their best to achieve set goals. But overdoing it is bad company culture.
When employees don’t go to lunch consistently, work overtime, and stay in the office for long hours during weekends, this is “presenteeism.”
This is not good for your company culture because you need a healthy work-life balance for your employees to perform well at work and be productive.
Employees who are overworking themselves are not healthy physically and mentally, which impacts their work performance and productivity.
Excessive overtime puts a strain on both the employee and the company. So, make sure to set boundaries.
Employees working overtime may also be a way of compensating for incompetence, so you must hire the right people in the first place and then train them properly to get the desired results.
Overtime can also be a way to inflate someone’s performance record to look better to their manager or get a promotion. Therefore, ensure that your employees aren’t working overtime for any such reason.
Also Read: Goal vs Objective
How to Fix Presenteeism?
You must set an example of a good work life balance. Your leadership team must be the first to arrive on time for work every day and leave at the right time.
Also, encourage your team to take regular breaks throughout the day and to take vacations periodically to recharge their batteries and return refreshed.
It is also possible to set up systems to identify and counsel employees who appear to work hard but aren’t getting anything done.
Impacts of Bad Workplace Culture
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According to a Flexjobs 2022 study, 25% of employees resigned in the past six months due to “toxic company culture.” This is especially true for Millennials and Generation Z, who are less tolerant of poor company culture.
Other effects of a toxic work culture include:
1. Low Employee Engagement
A less engaged staff is one of the most significant outcomes of toxic work culture. When your team is disengaged at work, they have less of an incentive to perform their best. This lack of motivation makes them less likely to remain loyal to the company.
Engaging employees also reduces absenteeism. According to a Gallup study, highly engaged workplaces had a 41% lower absenteeism rate. Employee engagement leads to a 21% increase in profitability for a company.
So, prioritizing employee engagement and fulfillment at work is extremely important if you want to retain top talent and create a productive and strong company culture.
2. High Employee Turnover & Hiring Costs
Continuity is crucial for the survival of any growing business. When an employee leaves your company, it takes time and money to replace them and train them for the job. That costs money and reduces your profits.
Gallup says that replacing one employee can cost one-half to two times the employee’s annual salary — which is an optimistic estimate.
As a result, a 100-person organization with an average salary of $50,000 could spend $660,000 to $2.6 million per year on employee turnover and replacement costs.
Plus, you lose the expertise they gained during their tenure at your company. High employee turnover rate also strains client relationships – especially if key employees leave the company in droves.
And when the clients do leave, they may never return, costing you repeat business or referrals.
3. High Level of Stress, Fatigue, and Employee Burnout
When employees dread Sunday evening or opening company emails, something is wrong with your corporate culture.
When your employees are stressed all the time, they cannot perform their best. And that’s bad for your bottom line because “burnout” hurts productivity.
An employee who burns out costs $3,400 out of every $10,000 in salary because they are not engaged at work. In this case, we’re dealing with high employee turnover and low productivity.
Burned-out employees are more likely to make mistakes on the job, miss deadlines, or take sick days because they are too stressed to work effectively.
In addition, burnout leads to low morale among team members and a “why bother” attitude that spreads throughout the office like a disease.
4. Bad Reputation for Your Company
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Thanks to the advent of anonymous reviews, current employees can voice their opinions about their companies on social media, and elsewhere, online. These reviews have real consequences; they can influence a business’ reputation.
Negative online reviews give the public a skewed perception of your company, which can cost you clients or leads. Customers will shy away from doing business with you if they read negative reviews about your business online.
You also miss out on top talents who could have taken your company to the next level if they had better work experience.
Approximately 70% of people now look at reviews before making career decisions, according to a Glassdoor U.S. Site Survey conducted in 2016.
The process of searching for a job is increasingly treated as an online shopping experience by candidates today. Candidates want to know what makes your company a positive workplace besides reviews.
Being proactive is a quality of good leadership, so you must recognize the signs of bad company culture and nip it in the bud before it gets worse.
Below are some signs that may signal a toxic culture within your organization.
A Good Company Culture Results In A Better Bottom Line – Conclusion
Your company culture defines who your organization is and how your employees behave and interact with one another daily.
If your organizational culture is positive and productive, you’ll see good results: higher profits, greater productivity, lower employee turnover, and more satisfied customers.
On the other hand, if your culture is toxic and unproductive, you may see poor results: high employee turnover, low productivity, and higher customer complaints.
So make sure your company’s culture is productive and positive by creating a positive work environment. It should encourage open communication among employees and focus on helping your people achieve their personal and professional goals while contributing to overall business success.
Tom loves to write on technology, e-commerce & internet marketing.
Tom has been a full-time internet marketer for two decades now, earning millions of dollars while living life on his own terms. Along the way, he’s also coached thousands of other people to success.