Lessons from Goldman: when good employees go bad

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A disgruntled employee can cause havoc for a company – Goldman Sachs has proven that in the last week – but even on a smaller scale unhappy workers can be damaging internally and externally.

When former Goldman Sachs employee Greg Smith wrote an opinion piece for the New York Times about the “toxic” environment he probably didn’t expect to cause the company’s shares to drop 3.4% – a staggering $2.15 billion of its market value.

Some former executives for Goldman Sachs say Smith’s tirade can’t be taken entirely seriously because he was a junior employee who may be venting frustration about his career or pay.

Even if this is true, the impact for the company has not lessoned. Few situations are as extreme, but disgruntled employees can still do damage internally and externally.

“Often the way it’s talked about is with respect to perceived injustices at work. It often can be the result of a toxic environment but then they can also create a toxic work environment that’s  really hard for other employees to work with,” says Kate Rowbotham, Queen’s School of Business assistant professor of organizational behaviour. “Someone who is unhappy can plant a seed – that frustration can be contagious almost.”

Unhappy employees can also damage a company’s reputation by talking to clients, lowering the standard of service they give and talking online about their complaints. A common early sign is withdrawing helping behaviours – where they simply offer less support to their colleagues.

“Organizations run on the goodwill of their employees. To not have those kind of voluntary behaviours that really help an organization can be damaging in ways that can build to have a strong impact.”

Rowbotham, who specializes in organizational deviance and work place and employee perceptions, says the key sign to watch for is a change in behaviour. If a usually efficient and helpful employee is slipping or withdrawing HR leaders could take the opportunity to talk to the worker.

“That really means having a good HR team, that knows their employees and can recognize what’s characteristic and what’s not. There could be something else going on at home, it could be a mental health issue or another stress.

“If you can address it in a compassionate way you might be able to stop it before it becomes really damaging.”

- Caitlin Nobes

  • Anna on 2012-03-21 3:27:42 AM

    From experience, it's also about taking your staff seriously. HR people need to be able to hear someone say "This isn't working for me" without going on the defensive. Is the complaint valid? How do we address it? If Smith had been able to bring up his concerns two years ago who knows how it might have ended.

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