Toxic work cultures look different across organizations.

It can be obvious when you have a stereotypical bad boss who barks out orders and demeans employees. But a toxic culture can also operate quite slyly, manifesting itself as microaggressions, and workplace silos that leave no room for connection and collaboration.

However toxic workplaces show up, the effects can be devastating: a growing body of research shows that workplace toxicity takes a deep toll on employee well-being, productivity, and business performance. 

To understand what a toxic work culture is and what HR leaders can do to create values-based workplaces, HRPA staff caught up with Professor G. Richard Shell, award-winning scholar, Chair of the Wharton School’s Legal Studies and Business Ethics Department, and renowned author of The Conscience Code.

1. What is a toxic work culture?

Every now and then, employees will experience bad days. There will be challenging situations at work. These aren’t necessarily signs of a toxic work culture. In fact, positive conflict can be a springboard for growth and innovation.

When a workplace is truly toxic, dysfunction is the organizational norm and mean-spirited behaviour occurs daily.

“It’s when the dominant daily emotion among employees is anxiety. Employees fear that they will be bullied, humiliated and/or shamed into silent compliance with values they reject,” says Shell, who’s heard hundreds of real-life examples of corporate wrongdoing from MBA students and other working professionals.

People in hostile working environments feel psychologically unsafe, as employers often violate workers’ human rights, health and safety rights and/or rights against constructive dismissal.

It’s also difficult, if not impossible, to escape the drama when the workday is over. The impacts of a toxic culture permeate into employees’ private lives resulting in illness, anxiety, depression, and insomnia.

Here are some common signs of a toxic workplace:

  • Increased turnover
  • Company core values are not truly lived out by team members
  • Low morale among employees
  • Poor communication
  • Harassment, bullying and abuse
  • Regular fighting 
  • Discriminatory attitude and behaviours 
  • Gossip and cliques
  • Lack of respect
  • Retaliation for raising concerns
  • Manipulation and blame games
  • Disregard for employees’ personal life (this especially applies to remote workers)

2. What causes a toxic work environment? 

It can start at the top, but ultimately the problem extends way beyond one supervisor or individual. Toxic workplaces are a product of what Shell calls ‘pluralistic ignorance.’

“Imagine there’s a group of six people and one of them makes a sexist joke,” says Shell. “Pluralistic ignorance describes what happens when everyone thinks, incorrectly, that the others find the joke funny when in reality they all find it offensive. Because no one speaks up about it, they all chuckle, the sexist is empowered, the moment passes, and the toxic workplace persists. If even one person had the courage to speak up, they would all discover that they outnumber the sexist 5-to-1.”

Pluralist ignorance creates conditions where mistreatment becomes acceptable and abusive conduct is shrugged off as “just the way things are done around here.” 

At this point, most employees enter survival mode. “This is especially the case when a company is solely driven by results rather than values,” says Shell. “A results-only company tends to indulge the behaviour of the most assertive and most crude – the people that care about achieving results no matter the cost. And often this leads to workers displaying unethical behaviour to achieve goals.” 

“Fundamentally, wrongdoing takes root when three conditions thrive: 1) PAIRS Pressures (an acronym which stands for pressures from peers, authority, incentives, role expectations and corrupt social systems), 2) opportunities for wrongdoing, and 3) face-saving rationalizations,” says Shell.

Understanding how to resist these conditions to uphold your values is the first step in building a positive workplace. 

3. What should employees do if they find themselves in a toxic environment? 

Shell outlines a few steps employees at every level can take to weather a dysfunctional workplace:

  1. Leverage the power of two: Befriend like-minded coworkers who share your values.

    “When you find an ally, you break that phenomenon of pluralistic ignorance. You discover that you’re no longer the only employee who thinks what’s happening is wrong.”

    These relationships act as a support system and can begin creating the spaces where people feel safe to voice concerns. 
  1. Choose to lead: In some situations, modelling the behaviour you wish to see could influence others to become more respectful, positive, and focused at work.

    “Others will begin looking at you as a role model for ethical action. You remind them, when they are most-tempted to forget, that everything worth doing is worth doing with integrity.” 
  1. Hold them accountable: “This is where I recommend that employees, in this situation, keep clear and comprehensive documentation in order to protect themselves and prevent retaliation.”

    This may also involve seeking out people in authoritative positions or speaking with an HR leader who can have more influence when implementing systemic changes to the culture.
    If breaches to your rights were made, then seek legal advice. 

4. What steps do HR leaders need to take to address toxicity in the workplace? 

Fighting an entrenched, negative culture can feel like an uphill battle. “So that’s why I recommend a method used in combat operations,” says Shell. “It’s called the OODA loop.” 
The OODA loop stands for observe, orient, decide and act. It’s a tactic that would traditionally be used by combat pilots to win battles.

The same concept can be used by HR leaders in addressing toxic workplaces.  

  • Observe – “HR professionals need to see a toxic workplace for what it is and identify it.”

    This could mean finding out who the ineffective leaders are and identifying your allies – those people who under more productive leadership would thrive.
  • Ownership – “I switched ‘orient’ for ‘ownership’ because I believe this is an important step for anyone that finds themselves in a toxic environment. For HR professionals, it means understanding their role, and what they can do to begin cultivating workplace trust and respect in the organization.”

    While HR professionals may not own all the conflict, understanding one’s role, responsibilities and duties is critical to fostering long-lasting change. 

    “Ownership also means figuring out if you’re averse to interpersonal conflict,” adds Shell. The Conscience Code features a personal assessment for conflict capability HR leaders can take to determine willingness and aptitude to deal with difficult conversations and potential confrontation.

    HRPA has a wealth of resources on conflict resolution throughout the year including webinars, and related articles and programs on e-Learning. There’s also a “Toxic Leadership” assessment in our Knowledge Bank. Login to access these resources.
  • Decide – “This is the strategic part. Now it is time to ask yourself if this something I handle on my own or does the situation need to be escalated? Should I consult those in higher positions within HR to get input?”

    This is when you come up with the first few steps you need to take to transform your destructive organization into a values-based one. The change needs to be explicitly clear and purposeful and should ensure everyone is considered. If it aligns with your role, it may also mean figuring out how to approach toxic individuals in seniority (that could be with an ally) to find out whether their abusive conduct can change. 
  • Act – “Now is the time to act. That doesn’t mean you need to blow the whistle or alert the biggest local news outlet. It may mean, as mentioned before, talking with the person who is going to advise you about what to do next. Or maybe you go directly to person perceived to be the problem and offer them a face-saving way to engage you in dialogue. You can suggest there have been ‘misunderstandings,’ and state that you’d like a conversation with them about what you’re hearing from some of their employees. Sometimes it may mean going outside the business unit for support.”

    Remember, HR leaders have a duty to ensure that they are compliant with the laws that govern employee rights and obligations. If a company breaches these regulations, your organization is at risk of serious consequences including financial and reputational damage. 
  • Loop – “The loop is critical because it’s when you see what happens, adjust, and make the necessary changes in strategy before starting the OODA loop process again.”

    In other words, decide, act, evaluate, adjust and repeat.


    Bottomline: Toxic work cultures are the enemy of productivity, health, and growth. They stifle team development and keep people from performing at their best. 

    Acknowledging you’re in a dysfunctional workplace is the right start. But to completely uproot a toxic work culture means committing to act with integrity. It’s about ensuring you remain an ethical and compliant professional ready to take the steps needed to build a healthy work environment.


Interviewee Bio:


G. Richard Shell
G. Richard Shell

Chair of the Legal Studies and business Ethics Department at the Wharton School of the University of Pennsylvania

Richard Shell is a global thought leader and senior faculty member at one of the world’s leading business schools, the Wharton School at the University of Pennsylvania. He serves as Chair of Wharton’s Legal Studies and Business Ethics Department, the largest department of its kind in the world. His forthcoming book, The Conscience Code: Lead with Your Values. Advance Your Career addresses an increasingly urgent problem in today’s workplace: standing up for core values such as honesty, fairness, personal dignity, and justice when the pressure is on to look the other way. Shell is a skilled communicator across many diverse audiences. His students have included everyone from Silicon Valley entrepreneurs and Fortune 500 CEOs to FBI hostage negotiators, Navy SEALs, and United Nations peacekeepers. In addition, he has worked extensively with public school teachers, labor unions, nurses, and hospital administrators to help them become more effective professionals.

Shell’s previous award-winning books include Bargaining for Advantage: Negotiation Strategies for Reasonable People (3rd Edition, Penguin, 2019), The Art of Woo: Using Strategic Persuasion to Sell Your Ideas (with Mario Moussa, Penguin/Portfolio, 2007), and Springboard: Launching Your Personal Search for Success (Portfolio, 2013). Collectively, they have sold over 500,000 copies in 17 foreign language editions. He has written for and/or been featured in The New York Times, The Wall Street Journal, Washington Post, Fast Company, Inc., Financial Times, U.S. News & World Report, Time, USA Today, HuffPost, Real Simple, Bottom Line Personal, and Men’s Health.

G. Richard Shell
G. Richard Shell

Chair of the Legal Studies and business Ethics Department at the Wharton School of the University of Pennsylvania

Richard Shell is a global thought leader and senior faculty member at one of the world’s leading business schools, the Wharton School at the University of Pennsylvania. He serves as Chair of Wharton’s Legal Studies and Business Ethics Department, the largest department of its kind in the world. His forthcoming book, The Conscience Code: Lead with Your Values. Advance Your Career addresses an increasingly urgent problem in today’s workplace: standing up for core values such as honesty, fairness, personal dignity, and justice when the pressure is on to look the other way. Shell is a skilled communicator across many diverse audiences. His students have included everyone from Silicon Valley entrepreneurs and Fortune 500 CEOs to FBI hostage negotiators, Navy SEALs, and United Nations peacekeepers. In addition, he has worked extensively with public school teachers, labor unions, nurses, and hospital administrators to help them become more effective professionals.

Shell’s previous award-winning books include Bargaining for Advantage: Negotiation Strategies for Reasonable People (3rd Edition, Penguin, 2019), The Art of Woo: Using Strategic Persuasion to Sell Your Ideas (with Mario Moussa, Penguin/Portfolio, 2007), and Springboard: Launching Your Personal Search for Success (Portfolio, 2013). Collectively, they have sold over 500,000 copies in 17 foreign language editions. He has written for and/or been featured in The New York Times, The Wall Street Journal, Washington Post, Fast Company, Inc., Financial Times, U.S. News & World Report, Time, USA Today, HuffPost, Real Simple, Bottom Line Personal, and Men’s Health.

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