The Cost of Toxic Work Environments

In his new book, Dying for a Paycheck, Jeffrey Pfeffer, of the Stanford Graduate School of Business, argues that toxic work environments have a profound impact on employee health and corporate profitability. Extensively researched and thoughtfully written, Pfeffer lays out the hidden costs of high stress, toxic work environments.

When people are fearful, anxious or worried it is difficult to think clearly, maintain focus and make objective decisions. In high stress situations, people often over-react to perceived threats, come across as hostile or become aggressive. It is not hard to imagine the impact on the bottom line if everyone in the company is so stressed that they cannot think clearly, or if they are more concerned about self-preservation than finding the best solution to the challenges they are facing.

Rob Chapman, CEO of Barry-Wehmiller says, “According to the Mayo Clinic, the person you report to at work is more important to your health than your family doctor.”[1]A manager who heaps scorn, is abusive or acts capriciously not only de-motivates employees, but has a significantly negative effect on employee’s health. In fact, a study of employees in England showed that lack of job control was a greater contributing factor to heart disease than smoking![2]

In the most extreme examples, toxic work places can have life and death consequences. “Between 1992 and 2010, there were almost fourteen thousand workplace homicides… more than were killed by fires and explosions, getting caught in equipment or machinery and exposure to harmful substances combined.”[3] The toll is staggering, yet managers too often allow toxic environments to continue.

Pfeffer suggests two easy, low-cost solutions to toxic work environments: (1) increased autonomy and (2) social support. Employees with greater levels of autonomy (the ability to make decisions, influence policies and be held accountable for results) are more engaged, less stressed and more productive. Companies that encourage a healthy sense of community find that their employees rebound after encountering obstacles, overcome personal and professional setbacks, are happier and more engaged.

We suggest that while interacting with people at work, you increase others’ autonomy by extending trust to them, refraining from micro-management and increasing their authority to make decisions. Also, invest time in building a sense of teamwork with co-workers knowing that the investment in others helps create an environment in which people grow personally and professionally.


[1] Pfeffer, Jeffrey, Dying for a Paycheck: How Modern Management Harms Employee Health and Company Performance – And What We Can Do About It Harper Business, New York, 2018, p. 9

[2] Idid, p. 149.

[3] Ibid, p. 11.