The Cost Of Bullies In The Workplace

Fast Company provides an excerpt from Robert I. Sutton’s book, The No Asshole Rule, which assists people in dealing with difficult co-workers and supervisors at work (as well has helps you avoid becoming the employee no one wants to work with). The excerpt:

The company decided that in addition to warnings and training, it was time to quantify the incremental costs of Ethan's bad behavior and deduct it from his bonus....The estimated costs were:

Time spent by Ethan's direct manager: 250 hours valued at $25,000

Time spent by HR professionals: 50 hours valued at $5,000

Time spent by senior executives: 15 hours valued at $10,000

Time spent by the company's outside employment counsel: 10 hours valued at $5,000

Cost of recruiting and training a new secretary to support Ethan: $85,000

Overtime costs associated with Ethan's last-minute demands: $25,000

Anger-management training and counseling: $5,000

Estimated total cost of asshole for one year: $160,000

Through my practice, I’ve come to realize the 5/90 rule: 5% of a company’s employees take up 90% of a company’s human resource department’s resources.  It is usually the same handful of employees that are causing discourse within the company, and these employees are probably not the company’s most productive employees. The most productive employees are too busy working to have time to create problems. 

I think if one could track these hours and costs, Sutton’s estimate would be very accurate. I would also like to add a few figures. If the 10 hours spent by outside employment counsel mentioned above was not enough to prevent a lawsuit from being filed, the costs associated with the time managers spent assisting outside counsel and the direct litigation costs could easily put the total costs well above $300,000. And the lawsuit might not even come from the jerk – it may come from his or her subordinate who thought that he was not treated with respect at the company, and that the company simply ignored his requests to help him deal with the jerk. 

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Daniel A. Schwartz - August 7, 2007 1:40 PM

I read the "No Asshole" book earlier this year and couldn't agree with you more. I often tell clients that keeping "difficult" employees around will only cause more headaches in the future. I had not thought about it, though, in the legal terms you put it here. A nice example to use on the "cost" of keeping around such people.

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