Transforming a Toxic Workplace: Steps to a Healthier Environment

Increasingly, organizations are recognizing their role in promoting employee well-being. As part of this effort, they must take stock of the atmosphere created by their workplace culture. Is it a pleasant and encouraging environment, or has it become less than ideal—or even toxic?

What is a toxic work environment? Essentially, a toxic workplace is characterized by behaviours and cultural norms that harm employees’ well-being. Such behaviours convey a lack of respect and affect people’s ability to do their jobs. Importantly, they can affect people at all levels of the organization. And even companies with an overall healthy culture can hold “pockets of toxicity,” due to dysfunctional team dynamics or abusive managers.

In this article, we’ll identify signs of a toxic workplace. Then, we’ll explore proven strategies for transforming workplace culture.

Table of Contents

1. Understanding Toxic Workplaces

2. Impact of a Toxic Workplace on Employees and Organizations

3. Key Strategies to Address and Mitigate Workplace Toxicity

4. Role of Performance Management Tools in Addressing Workplace Toxicity

Understanding Toxic Workplaces

In its 2023 Work in America Survey, the American Psychological Association (APA) writes, “92% of workers said it is very (57%) or somewhat (35%) important to them to work for an organization that values their emotional and psychological well-being.” Nearly 1 in 5 employees say they work in a toxic environment. And people with a cognitive, learning, emotional, or mental disability are even more likely to view their workplace as toxic, the APA found in its 2024 survey.

Further, 84% of employees say their work environment has contributed to at least one mental health issue. And 59% of employees say their employer perceives their workplace as much more positive than it truly is. 

Signs of a Toxic Workplace 

Toxic behaviours don’t just include screaming and casting insults. More subtle forms can arise, like exploiting others’ efforts. Let’s look at some common signs of a toxic workplace:

• Bullying
• Gossip
• High turnover rates
• Discrimination
• Harassment
• Negative attitudes
• Poor communication
• Lack of trust and respect among employees.
• Absence of teamwork
• Micromanagement
• Unrealistic expectations
• Unhealthy or unproductive conflict

In a toxic workplace, bullying and harassment might be given a pass rather than promptly addressed. Often leaders model unhealthy behaviours and employees follow suit. For example, leaders might foster a culture of unhealthy competition by treating recognition and rewards as a zero-sum game. In turn, employees might try to take credit for others’ work. Or, leaders with a detached, hands-off approach might simply allow negative attitudes and behaviours to fester.

“The leading elements contributing to toxic cultures include failure to promote diversity, equity, and inclusion; workers feeling disrespected; and unethical behavior,” writes MIT Sloan Management Review. 

Why a Workplace Becomes Toxic

Toxicity can manifest in diverse ways within different organizational cultures. According to MIT Sloan, these are the most common causes of a toxic workplace:

• Leadership. Poor management—whether it’s abusive or takes a hands-off approach—can lead to a toxic culture. Lack of training and accountability virtually ensures that poor leadership will be allowed to continue.
• Social norms. Normalizing behaviours that convey disrespect, like lateness to meetings, subtle disrespect in communications, or gossip, promotes an unhealthy culture as well. When such behaviours begin to persist unchallenged, they can evolve into culture. Employees begin to fall into patterns based on what the group views as acceptable.
• Work design. Role conflict or ambiguity, lack of empowerment, and overload can all contribute to a toxic culture. If leaders and HR don’t regularly reevaluate roles and workflow, such problems can ensue.
• Gender and race representation. Discrimination and harassment contribute significantly to an unhealthy culture, for obvious reasons. If the company isn’t promoting a diverse range of people, or providing everyone with equal support, toxicity will result.

Poor leadership is the number-one contributor to a toxic workplace culture, says MIT Sloan. While not all problems stem from leaders, top executives set the tone for the whole company, they assert. Toxic behaviours among leadership leads to increased absenteeism, lower morale, and poor performance of employees, research has found. And lower-level managers can shape team microcultures that affect the employee experience.

Impact of a Toxic Workplace on Employees and Organizations

Toxic work environments undermine psychological well-being, which, in turn, can affect physical wellness, contributing to conditions like heart disease. In its 2023 study, the APA found that a toxic workplace makes employees more than twice as likely to report poor or fair mental health. More than 76% of employees reporting a toxic work environment also said it harms their mental health, according to this study.

When mental health suffers, so do productivity, satisfaction, and retention. Employees can’t perform at their best, or show up as their most creative selves, when suffering from the stress of a toxic atmosphere. In turn, morale plummets—bringing a company’s reputation with it. As an organization becomes known for its toxic environment, few talented new recruits will want to apply to work there.

For these reasons, a toxic workplace acts as the top driver of attrition, writes MIT Sloan. In fact, it’s 10 times more influential than compensation in fueling turnover.

Key Strategies to Address and Mitigate Workplace Toxicity

The U.S. Surgeon General presents a framework for workplace wellness with five main elements:

• Protection from harm
• Connection and community
• Work-life harmony
• Mattering at work
• Opportunity for growth

Conduct a workplace audit that focuses on these five factors that influence wellness. Send out employee surveys and hold interviews to gain their perspectives. Then, work to strengthen each of these elements. 

Next, we’ll discuss some key ways of improving these dimensions of workplace culture.

Promote Open Communication

Encourage feedback and open dialogue between employees, managers, and company leadership. Feedback should flow in every direction. Work to instill a culture of radical transparency by regularly asking employees for their input and thanking them when they share it. Offer multiple ways of sharing input so that each person will feel comfortable speaking up.

For instance, implement regular check-ins and surveys to gauge employee sentiment. HR can hold one-on-one check-ins with employees in case they’d rather not share an issue with their manager. If a manager is promoting a toxic subculture, the employee can then discuss the issue with HR. Pulse surveys can also gauge how employees feel on an array of topics.

If you’ve identified a persistent structural problem, be candid with employees about it. Explain exactly what has been happening and how you’re addressing it. For example, “We’ve found that X number of women were being paid a lower rate than men at the same level. We have adjusted their salaries to correct the problem.” Better yet, have the CEO deliver the message, as the Society for Human Resource Management (SHRM) recommends.

Likewise, make sure managers are sharing regular feedback with employees. Sharing daily feedback is best; this will help employees feel more engaged as well. 

Develop Clear Workplace Policies and Expectations

Establish and enforce anti-bullying and anti-harassment policies. Define what constitutes each of these issues. If they’re happening in your workplace, hold workshops on how to avoid and address them. Create clear channels for reporting any issues. And assure employees that there will be no repercussions for speaking up. Explain policies and practices for maintaining discretion, such as keeping their identity anonymous whenever possible.

Establish core values as a company, too. But more importantly, urge leaders to model them, which will encourage employees to follow suit.

Create clear metrics to track your progress as an organization, as SHRM urges. After identifying cultural problems to overcome, pinpoint measures of success. For instance, if work design poses a major challenge, then strong work-life balance, understanding of expectations, and lower stress levels will show you’ve corrected the problem.

Set clear, realistic expectations that are defined in employee job descriptions. (If need be, rework job descriptions to cover what employees currently do.) Make sure managers are discussing expectations in weekly one-on-ones. They can ask employees to specify what they believe their role involves, along with additional tasks they’ve felt compelled to take on. Then, they can discuss what employees should actually be doing on a daily and weekly basis, in order of priority.

Foster a Positive Work Culture

Encourage employees and managers to take part in team-building activities and collaboration. Share examples of team-building activities that can strengthen relationships and performance. For example, managers could have their team play a game to launch Monday morning meetings, boosting energy and morale. They could also set aside time for collaboration on Wednesday afternoons. Or, employees could collectively decide on a volunteering opportunity to do together. 

Help each person connect with their purpose by talking about it as a team, too. How are they improving the lives of the people they serve? Staying connected with their mission—and informed about the specific impacts of their work, by top leaders—will infuse their work with meaning. In turn, this will help turn a toxic culture around, as leadership coaches John Baird and Edward Sullivan write in Harvard Business Review.

As leaders and employees take steps to generate a more positive culture, recognize and reward their efforts. Highlight positive steps taken by teams and individuals, sharing them with the whole organization. This will catalyze further action to shift the culture by inspiring others with great ideas and showing their results.

Provide Support and Resources

In addition to the above strategies, support employees and leaders in these crucial ways.

Offer Mental Health Support

Connect employees with mental health resources and support programs. Make sure each person understands how to access therapy through their mental health benefits. Provide an easy-to-navigate directory of therapists in your network. 

Promote Employee Resource Groups

Encourage employees to set up employee resource groups (ERGs), too. Led by employees, these groups allow those who share particular identity markers to find common ground and advocate for their interests. They can provide vital guidance for an organization’s DEI efforts and boost inclusivity, strengthening culture.

“Belonging to an ERG also helps employees feel that they can be authentic at work, and derive more meaning and purpose from the work that they do,” McKinsey writes. “Within the workplace, ERG systems and infrastructure strengthen acceptance, camaraderie, and fairness across groups and help members build allyship. ERGs also boost the visibility of underrepresented groups among larger groups in companies.”

Support Employee Growth

Provide support to help leaders and employees effectively meet expectations. Implement mentorship and professional development opportunities to equip them to succeed. Pair each person with a compatible mentor and encourage them to meet regularly. 

Coach Leaders and Managers

Share guidance on how to build a positive team culture with managers and leaders. Through coaching conversations, you’ll also boost accountability, emphasizing how their actions affect others. Coaching sessions serve as one-on-ones for leaders, providing a chance for detailed feedback and reflection. These conversations will also help them become more self-aware by focusing regularly on their interpersonal interactions.

Role of Performance Management Tools in Addressing Workplace Toxicity

Employees may not report even serious issues through formal channels. However, you can use performance management tools and surveys to gather this data.

Collect 360 feedback to identify toxic behaviours and areas for improvement, both for managers and employees. Conducting 360 reviews will highlight interpersonal challenges and tendencies, revealing patterns across different relationships. Discuss this feedback with individuals, creating a plan for growth. Check in with them routinely to assess progress and ensure accountability. 

Leverage performance management software to set clear goals and expectations. Communication, teamwork, and morale will all benefit from the use of these tools. Plus, they’ll help managers to easily review weekly progress and share feedback based on what they’ve observed.

Enlist performance evaluation tools to help you conduct unbiased performance reviews. These tools will make appraisals more fair and accurate, while highlighting crucial issues to address.

A toxic work environment can hold back personal and organizational growth. But through proactive strategies like clarifying expectations, rewarding positive behaviour, and communicating clearly and respectfully about problems, you can transform an unhealthy culture. By taking decisive action to correct any issues, you’ll foster an environment where everyone can thrive.

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