Healthy cultures, reduced costs

Unhealthy workplace cultures can have costly consequences – but there are fixes to be found, say our 5 panellists
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 11/25/2014

This roundtable is sponsored by Sun Life Financial.

There Is no shortage of liability landmines and bottom-line-sucking HR issues in the workplace — bullying, harassment, violence and poor employee engagement, to name but a few. And in nearly every case, the underlying root cause is an unhealthy workplace culture.

“A toxic culture is often characterized by people’s inability to speak directly to each other respectfully and assertively, so problems become bigger and bigger and the toxicity just becomes embedded in the culture,” said Sharone Bar-David, president of Bar-David Consulting in Toronto.

“It’s often things that could be resolved with a little conversation early on, either person-to-person or from an alert supervisor or manager.”

The good news is that unhealthy cultures are quite fixable — it’s just a matter of a solid commitment from leadership, a little bit of legwork and ensuring resources are targeted at areas that will truly make a difference. That was one of the conclusions reached at a special roundtable discussion moderated by Canadian HR Reporter managing editor Todd Humber in partnership with Sun Life Financial.

An unhealthy workplace is an evolution, brought about through the prevalence of bystanders or an environment where people turn a blind eye to bad behaviour, according to Susan Wright, HR manager at Sabic Innovative Plastics in Cobourg, Ont.

“It becomes a creeping culture, then that becomes accepted.”

Productivity levels, employee engagement levels, injuries — these can all be indicators of an unhealthy culture, said Wright.

“We look at our disability data, we look at our absence trends, we look at our employee engagement survey data — which we do on an every couple of years’ basis. And we look at ad hoc pulse surveys to understand what people are thinking, feeling because… culture is what people say and do — we want to get a pulse on that on a regular basis,” she said.

“So we use very quantifiable and in some cases qualitative data as well to assess where we are from an organizational health standpoint.”

Tracking numbers, highlighting problem areas

Benefits providers can help organizations by tracking the numbers and highlighting problem areas.

“You need to understand your data and your demographics in your organization so that you can truly understand what’s working well and what’s not, and what do we need to do more of and where can we make the largest investment so we’re going to get the ROI,” said Sandy Fallon, senior vice-president of people at technology company Softchoice in Toronto.

“That’s really important so that we know we’re putting our money into the areas that are going to be most beneficial for our employees and what they need the most. So whether that be all the different carriers or EAP or (Ceridian’s) LifeWorks — whatever it is, it’s just important to get that data because… it’s really hard to find the time to actually do that internally.”

It’s also very telling to look externally at websites such as Glassdoor to see what employees are saying about your company, and their perceptions, said Fallon.

“Exit interviews, taking a look at exit interviews and understanding: Are we doing what we say we’re going to do, is our culture living up to what we think it is? “ she said. “So it’s that reality check that helps you understand and validate.”

Another sign of a toxic culture is a person not showing up for work or being actively disengaged, who constantly brings everyone else down, she said.

“That’s the other poison that you get.”

If problems of the same nature are recurring, and seemingly insoluble, that’s another indicator, according to Howard Levitt, senior partner at Levitt & Grosman in Toronto. And often management is the first to know.

“Perhaps the best sign of a toxic culture is a unionization campaign that you’re having trouble fighting,” he said.

This toxicity can lead to performance management issues and excessive absenteeism claims, particularly stress claims, said Levitt.

Legal concerns: Wrongful dismissal has nothing on negligence

The legal implications of a toxic workplace can be considerable. First of all, employees having disputes with their employer can sue for constructive dismissal, said Levitt.

“The second thing is negligence claims, and there have been some massive decisions in Canada on negligence — far greater than wrongful dismissal, which is really a relatively poor cousin.”

And if an employer knows an employee is breaking down physically, emotionally, psychiatrically — there may be complaints or symptoms — and has to leave the workforce, then the employer can be sued for constructive dismissal and negligence, he said.

“The individual who did it — if there’s a particular abuser, manager in the workplace who did it — can also be sued, and the damage can be up to payment until they’ve otherwise retired — decades, potentially.”

There’s also human rights liability and the social stigma to employers, said Levitt.

“That’s where employers face embarrassment if it ends up in a newspaper because no one wants that because that hurts the brand and that hurts recruitment,” he said.

“The other thing with the human rights commission is it goes on for years. Even with the new tribunal, it’s a lengthy process compared to other particular proceedings.”

Finally, there’s more amorphous harassment under occupational health and safety legislation, such as Ontario’s Bill 168. While violence is relatively rare, harassment is almost always in the eye of the beholder and an employer is liable if it knew about it and didn’t stop it, said Levitt.

“Employees can be liable individually; the penalties for a corporation can be one-quarter of a million dollars. For an individual, it can be jail for 12 months and only $25,000, which may not seem much compared to $250,000, but that can be ruinous for some individuals.”

A cure for unhealthy cultures

So, what can be done? How can an employer cure that which ails it and build a healthy culture?

Softchoice does everything it can to preserve its strong culture, said Fallon, and that includes attracting and recruiting the right kind of people who fit its values.

The company also did a branding initiative, talking to employees, vendors and partners in the industry, to find out about its culture and then it communicated back to employees about any changes it made.

“It’s really important that organizations build the pride in the organization around how great your culture is and they celebrate the win, celebrate all those wonderful things that are going on,” she said. “It’s important to make sure you go back and you thank the employees for their efforts and you do what you say you’re going to do, so that you continue to get that kind of feedback.”

Reinforcing values is also important to building a strong culture though, too often, those are defined at 30,000 feet, said Carmen Klein, senior director of organizational development and culture at Cadillac Fairview in Toronto.

“Your average worker or employee doesn’t know how to operationalize those, so how does that translate into what I do differently when I walk into the workplace every day? So it’s operationalizing those values so people understand what to do.”

Levitt cited one employer that posts its values everywhere — in emails, on coffee mugs, on walls, form letters and contracts — and everything is discussed in the context of those values.

“They make my life really easy… when I have a case because I start off with that letter of employment where they agreed to those values — in the context of a case of cause for discharge where the behaviour’s antithetical to those values — and they agree to it there and I get them to admit that they know the values,” he said.

“Everybody can recite them and if they say they can’t, it’s not credible because everybody can, all the other witnesses can. And it makes the context of a cause much more egregious than it would be otherwise, and the people behave accordingly because they really do live those values. And it’s anomalous if they don’t.”

As part of its drive for continued organizational health, Sabic is incorporating the new National Standard of Canada for Psychological Health and Safety in the Workplace. It also tries to engage and involve committees, whether it’s health and safety or employee advocacy, said Wright.

“There’s true ownership and involvement on an ongoing basis to understand the issues and concerns of employees so that you can proactively deal with situations before it gets to a place where you have toxicity, where you have terminations that should not happen, where you might have different incidents or issues on a sliding scale of a violence... continuum.”

The company takes a holistic approach by having programs and services available to employees through its benefits programs and EAP services, in addition to its talent management strategy and learning and development culture, said Wright.

“(This ensures) that we’ve got competent supervisors, competent leaders so that we are not in a situation where we could be seen as negligent, in terms of promoting somebody into a position (they) might not understand and have good emotional intelligence as it relates to leading people.”

Leadership issues

To convince the C-suite of the need for transformation, the data piece is absolutely important, said Klein. And then it’s about layering in stories, connecting with people in their network.

“Through experience in talking about culture with the very senior leaders, depending on the organization, they just don’t understand what that is, so talking about ‘changing culture’ becomes this big fluffy thing,” she said.

“So the more tactical you can bring that definition down to your senior leaders, that would be great. And sometimes… (they) might actually be part of the problem as well.”

You have to start at the top, said Klein. That means defining the desired behaviours that are essential to leaders.

“And then, with that, start to bring that down into the organization — so which leaders are demonstrating it, which ones are not, do we have time to build them up, to build their capability up to be the leader that we want them to be or is the time so toxic, we’ve got to pull them out and put someone else in?” she said.

“So it’s seek to understand and assessing your leadership, one by one, and starting to embed those into your talent processes, into your performance reviews, into your recruitment strategy, into your assessment tools that assess external talent, so any leaders that are coming in… whether they be people leaders or a person who’s on your front line operating that equipment, are they demonstrating those leadership values that are so important for us, those behaviours.”

Too often, leaders aren’t trained properly, they don’t gain the skills from the organization or previous jobs for dealing with issues like this, said Bar-David. Research has shown low-level behaviours such as bullying and incivility can affect productivity and inter-team collaboration, and a lot of these behaviours are demonstrated from the top, she said.

There’s also human nature — people are complex and don’t always want to see or deal with issues.

“The other element is our own inner world and our inner psyche. We humans, whether we’re management or not, we try avoiding situations that have to do with conflict, anything that could potentially make us less likeable or enter conflict in general. In Canada, we have a culture of being nice so anything that goes against that is problematic,” said Bar-David.

“So even if you have built the competence organizationally, we still have all these internal barriers within us, as managers and leaders, to actually take the action that’s necessary on the ground — fear of things backfiring, etcetera — and that I think is the emotional intelligence part that is crucial.”

Employee health is core to organizational success
Sun Life Financial

The Canadian HR Reporter roundtable on organizational health provided an excellent overview of how important it is to have a healthy workplace environment, and how fragile that healthy balance can be. Firstly, this panel of experts focused on what defines a great workplace — the culture, the people and the leadership — and how open communications and employee trust are critical to maintaining a healthy and productive organization.  

Secondly, they examined elements that can erode even the best of workplaces, including “creeping culture” and micro-cultures that can develop on the peripheries of an organization and might not be visible to HR and leadership until serious issues arise. All agreed it can start with the smallest negative action or incident and grow quickly from there.  

The panel discussed best practices that really nourish a healthy work environment including: formal training for managers to recognize and be able to respond to red flags; the importance of communication with employees and providing a safe forum for feedback and reporting; engaging employees in processes to support positive workplace culture; and ensuring everyone knows and understands the values of the organization and keeps them front of mind in their day-to-day activities. All confirmed that a healthy workplace starts at the top and leadership must be committed to walking the talk. 

The group then looked at what happens when the environment becomes toxic — who is likely to first notice issues, and how best to start the process of detoxification. They also examined the toll a toxic environment can take on employee health and well-being.  The collateral damage to both presenteeism and absenteeism was discussed, as well as costly consequences such as rising disability claims. 

The panel concurred that it’s the “how” that makes the difference —the right leadership decisions and commitments, a thoughtfully designed benefit program that includes an Employee Assistance Program to support employees, and the implementation of — and commitment to — strong, transparent strategies and policies. 

Sun Life sponsored this roundtable because our vision is to create a healthy Canada — one organization, one employee at a time. We believe employee health is core to the foundation of establishing a positive work culture and supporting optimal organizational success. We are committed to organizational health, which means everything from the physical and psychological well-being of employees to the employer’s bottom line.  

And we connect the dots in between to ensure employers can measure and understand the value of the investments they make in the health of their employees.  

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