How to Identify and Fix a Toxic Workplace Culture

No leader wants to see their company struggle under the weight of a toxic workplace. Yet, toxicity can grow silently, taking root before it becomes obvious.

The key to maintaining a healthy workplace is continuous effort—recognizing warning signs early and taking decisive action before negativity becomes the norm. Understanding why toxic cultures develop and how to reverse them is essential for cultivating a productive and engaged workforce.

Reasons to Avoid a Toxic Workplace

A toxic workplace affects morale, productivity, and even an organization’s ability to attract and retain talent. Employees who feel unsupported or mistreated are far less likely to remain engaged, leading to high turnover rates and stagnation.

This means that fixing a toxic culture is not just an HR issue, but rather a fundamental business necessity.

Why Toxic Workplaces Occur

Many assume toxic workplaces stem from intentional mismanagement, but in reality, they often emerge accidentally.

A company’s relentless pursuit of performance can push leaders to prioritize numbers over people, inadvertently creating a culture of burnout and stress.

Another major contributor is hiring the wrong people. If toxic behaviors go unnoticed during recruitment, a single negative influence can spread quickly, disrupting teamwork and morale. Carefully selecting individuals who align with company values is crucial for long-term success.

Other factors that contribute to workplace toxicity include:

• Poor leadership: when leaders fail to communicate transparently or make inconsistent decisions, they create confusion and mistrust.
• Lack of defined company values: without a clear guiding philosophy, employees may struggle to navigate workplace dynamics, leading to disengagement and conflict.
• Failure to address small issues early: problems that are ignored or downplayed can snowball into major cultural issues.
• Lack of employee recognition: when employees do not feel acknowledged for their efforts, frustration and resentment can stack up.
• Excessive workloads and unrealistic expectations: employees who are overburdened and constantly pushed to exceed expectations without adequate support experience burnout, which leads to disengagement and resentment.
• Lack of career advancement opportunities: employees who do not see growth potential within the company may disengage, leading to decreased motivation and high turnover.

What is a Toxic Workplace?

The concept of a toxic workplace can mean different things to different people. While there isn’t a single definition that universally defines the term, extensive research has identified common factors that contribute to the perception of workplace toxicity.

Researchers from MIT Sloan Review analyzed more than 1.3 million Glassdoor reviews from employees across 400 industries to determine the shared themes among negative comments about company culture.

Their findings provide valuable insights into the elements that create a toxic work environment, helping leaders recognize and address the issues that contribute to dissatisfaction and disengagement.

Ultimately, five attributes have been identified as defining a toxic workplace.

Disrespectful

The feeling of disrespect at work has the most significant negative influence on an employee’s overall perception of their company’s culture compared to any other factor.

This behavior involves attitudes that belittle, undermine, or devalue employees. It can take the form of public criticism, dismissive gestures, or consistently interrupting someone during meetings. 

Noninclusive

A noninclusive workplace culture is one where diversity (in various aspects like LGBTQ+, disability, racial, age and gender) is neither embraced nor valued, leading to feelings of exclusion among employees.

This can manifest through discriminatory practices, such as overlooking qualified individuals for promotions based on race, gender, or age. Practical behaviors include managers favoring certain groups over others, a lack of accommodations for employees with disabilities, or an absence of policies supporting work-life balance for parents.

Unethical

An unethical workplace is characterized by actions that violate moral norms or professional standards. This includes practices like falsifying reports, encouraging employees to cut corners, or ignoring safety protocols to save time or money.

For example, a company might knowingly sell defective products, or a manager might pressure staff to misrepresent data to clients.

Cutthroat

A cutthroat culture promotes ruthless competition among employees, where individuals are pitted against each other and collaboration is discouraged.

This environment may reward those who undermine their peers to get ahead, leading to behaviors like withholding information, taking credit for others' work, or sabotaging colleagues' projects.

Abusive

Abusive workplace behavior involves mistreatment that can be verbal, nonverbal, psychological, or physical. This includes yelling, intimidation, humiliation, or any form of harassment.

A practical manifestation could be of a manager berating an employee in front of their peers, or coworkers might engage in bullying tactics to isolate someone.

Why Workplace Culture Matters

A company’s culture is more than just a buzzword: it defines how employees experience their work environment and, ultimately, how successful the organization becomes.

It significantly impacts employees' productivity, the quality of their work, and their ability to collaborate effectively with team members.

Employee Retention

Employees don’t just work for paychecks; they seek workplaces where they feel valued and supported.

Culture plays a bigger role in employee retention than many realize. A study from MIT Sloan Management Review found that even at the height of The Great Resignation in 2021, companies with strong, positive cultures experienced lower turnover rates (MIT Sloan Review).

The data collected by Revelio Labs further consolidated this by showing that toxicity is the number one predictor of employee turnover.

A toxic culture pushes them out the door, while a positive one encourages long-term commitment.

Encouraging Innovation and Excellence

A supportive atmosphere allows employees to share ideas without fear, leading to increased creativity and productivity.

Reducing Workplace Stress and Burnout

When employees feel safe and respected, they experience less work-related stress, which translates into better performance and fewer sick days.

Attracting Top Talent

A bad reputation spreads fast. If a company is known for toxicity, the best professionals will look elsewhere, leaving the organization with a weaker talent pool.

Boosting Team Collaboration

A positive workplace culture enables employees to work together more effectively, reducing conflicts and improving productivity.

Creating a Sense of Purpose

Employees who understand and believe in a company’s mission are more likely to stay engaged and perform at their best.

Strategies to Fix a Toxic Workplace Culture

By now, it’s evident that investing in a company’s culture is essential for its long-term success. Failing to cultivate a positive work environment has direct consequences on employee turnover rates, the quality of services delivered, and the company’s appeal to top talent.

Beyond these challenges, the consequences of an unhealthy workplace extend beyond morale as they come with a financial cost.

Employees in toxic environments face increased health risks, such as asthma, diabetes, arthritis, and coronary disease, which raises employer healthcare expenses.

According to the U.S. Bureau of Labor Statistics, 72% of private industry workers and 89% of state and local government employees have employer-paid health benefits, making workplace wellness an economic concern as well as a moral one.

Investing in a Safe Space

A key solution is fostering psychological safety. According to the American Psychological Association, this means ensuring employees feel:

Comfortable sharing honest feedback without fear of retaliation

Achieving this requires building a strong, trust-based partnership between leaders and their teams, where open communication is welcomed and valued.

Involved in decision-making processes that affect their roles

Listening to employees' input doesn’t mean compromising business decisions, particularly those made at the executive level. However, giving employees a voice can positively influence outcomes while creating a sense of value and inclusion, reinforcing that their perspectives matter.

Supported in balancing work and personal responsibilities

To enable employees to perform at their best, companies must create conditions that allow them to manage personal obligations effectively. Simple gestures, such as offering flexibility in challenging situations or temporarily redistributing tasks when someone takes personal leave, demonstrate a genuine commitment to work-life balance.

Encouraged to prioritize mental health and well-being

Normalizing conversations about mental health encourages employees to seek support when needed. Managers should establish standardized operating procedures to ensure workflow continuity even when team members take time off. This proactive approach reassures employees that prioritizing their well-being won’t negatively impact their team or workload.

Empowered to contribute ideas and solutions without fear of being dismissed or ignored

Once again, we see how crucial it is to show employees that their contributions are valued. Encouraging participation not only drives innovation but also strengthens employees’ connection to the company, nurturing a culture where they feel truly invested in its success.

By prioritizing these principles, businesses can create an environment where employees feel respected, heard, and valued.

Summary: Business Benefits of Fixing a Toxic Culture

As shown above, companies that prioritize a healthy work environment enjoy:

• Stronger employer branding: a positive reputation attracts top talent.
• Higher productivity: engaged employees are more effective and dedicated.
• Better retention rates: lower turnover reduces recruitment and training costs.
• Greater innovation: a culture of trust and respect fosters creative problem-solving and collaboration.
• Improved customer satisfaction: employees who are engaged and happy at work provide better customer service, leading to stronger client relationships.
• Higher profitability: businesses with healthier workplaces see higher efficiency, reduced absenteeism, and greater financial stability.

Toxicity in the workplace doesn’t just cause unhappiness. It actively drives talent away, making retention an even harder battle.

By recognizing toxicity early, prioritizing employee well-being, and raising a culture of psychological safety, companies can build workplaces where employees feel truly appreciated.

For more insights on creating a thriving work environment, check out our next article: Hiring Contract Workers.