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Why bad management is detrimental to employee wellbeing

8 Jan 2020 By Vlatka Hlupic

Companies that put profit above people and encourage toxic working environments will struggle to flourish, explains Vlatka Hlupic

A healthy business requires a healthy working culture. Unsurprisingly, this culture should be meticulously built by forward-thinking managers and leaders. Leadership is less about directing people and more about the design of a setting in which virtuous and creative behaviour becomes natural and not exceptional.

Unfortunately, some companies today still operate as factories for making money, focusing on maximising short-term profit at any cost. They put quarterly returns for shareholders before people, forgetting that all profits come from their people, and people are not replenishable resources.

A toxic work environment can affect a person’s physical and mental health to the point of shortening their life. Research carried out by Jeffrey Pfeffer, professor of organisational behaviour at Stanford Graduate School of Business, found that any job can have a detrimental impact on employee health, not just those we associate with heavy machinery, volatile chemicals or extreme weather conditions.

Poor communication, inconsistency in following company policies and procedures, and toxic leaders within the system are just some of the factors that can impact on employee health physically, emotionally and relationally. In his book, Dying for a Paycheck, Pfeffer scrutinises leadership and management practices, particularly in the US, where he says such practices are destroying individual and organisational health. 

To prove it, Pfeffer and a team of academics surveyed a broad range of employee health and wellness research. They identified 10 workplace elements within the control of employers that significantly affect human health and longevity, including being fired or made redundant; not having health insurance; irregular shifts; working more than 40 hours a week; job insecurity; and poor work-life balance.

Pfeffer noted that workplace environments in the US may be responsible for more than 120,000 deaths per year, making workplaces the fifth leading cause of death in the country. Organisations of all kinds regularly permit – if not encourage – management practices that literally sicken and kill their employees.

In addition, Pfeffer found toxic work environments caused by bad management affected businesses globally. For example:

  • In the UK, 13.5 million working days are lost to stress-related absence every year.
  • In Australia, 75 per cent of workplace psychological injury claims come from work pressure, harassment or bullying.
  • In China, it is estimated at least one million people per year are dying from overwork.
  • In the US, job stress costs US employers more than $300bn annually.

My work follows the concept of 'levels' of individual mindset and corresponding organisational culture in the emergent leadership model, from Level 1, which is negative and seriously dysfunctional, through to Level 5, which is unbounded and passionate. Overall, there is undisputed evidence from the emergent leadership mModel and many other studies that a shift to a more humanised way of conducting leadership and management practices is a matter of survival, and ultimately a gateway to a healthy and thriving workplace culture.

Vlatka Hlupic is professor of leadership and organisational transformation at Hult Ashridge Executive Education, and CEO of The Management Shift Consulting

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