Applauz Blog

7 Signs of a Troubled Company Culture (And What to Do About It)

Published: September 21, 2021

Last Updated: June 8, 2023

  10 min read

By: Michelle Cadieux

Are your work culture issues harming employees' well-being? Here are a few signs of a toxic company culture, and what you can do about it.

You've probably heard of workplaces with impressive offices, benefits, and even lavish social events. But, despite the polished exterior, the work culture is toxic; employees are burnt out and chronically disengaged.

Why does this happen?

When you walk into a new job, you don't go in as a blank slate. You bring all of your ideas, beliefs, and expectations about the world (and work) with you. These are your guiding principles shaped by your culture and experiences. 

In many companies, cultures become destabilized or dysfunctional when these hidden (and often harmful) beliefs manifest in people's behaviour. And ultimately influence the collective way people treat their work, but most importantly, each other.

Going beyond the surface

While social events and HR programs are important, it's equally vital that companies understand that a healthy, wellness-focused culture cannot be supported if harmful work practices or norms continue to be accepted.

In other words, taking stock of the workplace is critical. This entails companies asking themselves if their culture condones behaviours that undermine employees' long-term health and well-being.

Using this list, leaders will be able to identify if their work environment is troubled or supports harmful beliefs.

These signs serve as a window into the hidden assumptions, beliefs, or expectations that lie at the heart of the issue.

To achieve lasting cultural change these core beliefs need to be challenged and replaced with healthier values.

Interestingly, all of these cultural woes can occur even in a remote work setting. This further proves that company culture is more about intangible factors like how people work together than physical objects in the office.


7 Signs Your Company Culture Is in Trouble (And What to Do About It)

Employees worry they will be unfairly penalized for disconnecting

Lack of work-life balance is often cited as a common factor that drives excessive workplace stress. Employees have an individual responsibility to learn how to unplug and disconnect from work, of course. 

However, this is easier said than done. This is especially true if everyone in the workplace is operating on the same "always-on" or "urgency culture" mentality. Achieving work-life balance becomes even more difficult with this unspoken expectation hovering in the background.

Think about it like this: how would it feel if all your colleagues (and your boss) were answering emails and IM messages at all hours of the day, or maybe even while on vacation! 

Employees are not explicitly told to meet these expectations, but if they're aiming for a raise or promotion, they'll feel pressure to keep up with this standard, even if it's at the expense of their mental well-being. 

If you are actively trying to build a healthy and balanced work culture, these habits and practices must also be addressed. If this behaviour is left unchecked will undoubtedly have an impact on the long-term well-being of your employees and the climate of your organization.

A climate of “busyness” pervades. Working long hours is common. 

According to a recent WHO study, long working hours (55 or more hours per week) kill hundreds of thousands of people every year. One global study found that 745,000 people died in 2016 from stroke and heart disease as a result of working long hours.

It’s a harsh reality; a culture of overwork and constantly appearing busy is the norm in many organizations.

Why does this problem occur even though we know these environments are so detrimental to workers’ well-being? Not only causing unnecessary stress and burnout but even illness and death!

The belief that working long hours and appearing busy equates to higher productivity is one that is held by many organizations implicitly.

This notion is a remnant of the industrial age. During this time, the amount of time a worker spent on the factory floor directly impacted the output produced. 

Similar to the example above, no one explicitly tells employees to work that much, but if that’s the unspoken norm within the business at large, employees will feel pressure to conform. And the culture of “busyness” and long hours will continue.

Once again, a climate of busyness can be a culture killer, leading to unnecessary stress, burnout, and turnover.

It is something that leaders will have to dismantle from the ground up if their goal is to build a strong, healthy culture and drive greater employee wellness.

People are afraid to speak up or be honest with leadership

If employees are fearful to offer feedback or speak up about something that is bothering them, your workplace culture may be in trouble. 

Hesitance to speak up can result from an atmosphere of fear and intimidation in the workplace. So what creates this type of work environment?

The following implicit norms may be ingrained in your culture and could contribute to a lack of psychological safety within the workplace:

  • When an unspoken norm of "vulnerability equals weakness" is entrenched in your culture, workers may be afraid to express their feelings or show signs of perceived “weakness,” such as admitting to feeling overwhelmed or stressed and needing a break.
  • If your leadership operates on a mentality of “employee opinions don’t matter,” employees may rarely get asked for their opinions. Or, employees' feedback might be gathered merely for formality, but leaders and decision-makers will not take any action on it. Worse case: employees who speak up are ignored and covertly punished. 

These actions will result in employees not feeling safe or bothered enough to express their opinions. As a result, they will often become disengaged, passive and not even bother giving feedback because they know ultimately it won’t change anything.

These environments low in psychological safety create a troubled culture that can take a toll on employees' mental and emotional health. Ultimately, high turnover can become a problem for businesses that don’t actively address these important underlying issues.

People know there is a problem, but no one is talking about it (or taking action)

One of the most telling signs of a problem with the culture is that employees covertly gossip about it; HR knows there is an issue, but nobody is bringing it to light. 

For example, if an unprecedented amount of employees are taking burnout leave, but no one is talking about the most important thing -- why it's happening. In short, the working conditions that caused people to burn out in the first place are not being addressed.

This issue also stems from a lack of psychological safety within the organization. It may be difficult for HR and managers to bring up these concerns to senior leaders because of the risk of skepticism or pushback. Some leaders might not even want to recognize the problem at all!

In a recent article about toxic workplace cultures, Dr. Leslie Hammer, psychologist and professor, explains how this reality is why many businesses fail to remedy their cultural issues. 

According to Hammer, despite the introduction of modern HR programs, lack of wellness is still a massive issue for most businesses. 


It's because many leaders are not taking responsibility for their well-being problems. They leave it to HR to create new programs or benefits and put the onus on employees to fix their own well-being with these programs. Most companies do this because it's the "easy" route, she explains. Yet, it's not the correct route for lasting cultural change.

"Few business leaders ever want to admit they're the problem, or that their supervisors lack empathy skills, or that their business model may harm employee well-being despite being financially successful. Fear of failure and the enormity of looking inward are what stand in the way of "total worker health" becoming the norm rather than the exception."

Employees are battling over resources and time

Think about employees who are spread too thin, perhaps doing the work of two people. This is a scenario that is far too common in even seemingly healthy work cultures.  

These demands impact the employees’ individual stress levels, of course. But what leadership often fails to acknowledge is how these increased demands influence the collective climate of a business. In other words, the way employees interact with each other.

Let me explain. When teams or individuals are overburdened, they will naturally begin to protect their valuable time. This can start people down a slippery slope of endless negotiating over these limited resources. Having insufficient resources can also cause bottlenecks that slow down productivity and efficiency. As a result, this type of work environment can lead to a loss of trust and collaboration as employees feel frustrated and exhausted by these barriers to productivity.

Creating a strong culture requires ensuring employee workloads are reasonable and sustainable. But also providing enough resources to allow them to do their jobs effectively.

When employees have enough time and resources to get things done, they are more likely to be in good spirits, and help each other and collaborate easily without issue.

As a result, effective teamwork has a net positive impact on the relationships between employees and, in extension, your company's work culture at large. 

Biased-decision making is a problem 

In a popular Gallup survey of 7,500 full-time employees, they found the top reason for burnout being “unfair treatment at work.”

“Unfair treatment” can mean a lot of things in the workplace. But what it often boils down to is bias. And bias is simply an implicit assumption.

For example, one can harbour implicit biases (or assumptions) about people of a certain race, age, gender, or background. As a result, their behaviour at work will be affected by these biases. Ultimately, these beliefs will influence which people are hired, promoted, given raises, etc.

Research shows that organizations that check these biases by intentionally building diverse cultures are more innovative and financially successful. 

Case in point: Research by Mckinsey shows companies in the top quartile of gender and ethnic diversity were 25% and 36% more likely to financially outperform those in the bottom quartile.

On the other hand, biased decision-making and lack of transparency in the workplace can lead to many employees feeling unfairly treated. When employees feel frustrated and resentful, this harms their relationships with each other, thereby harming your company culture and ultimately hurting your bottom line.

As a result of a workplace atmosphere in which employees feel unfairly treated, the following point may emerge.

Employees are secretly rooting against each other

An excessive amount of negative gossip among employees should raise a big red flag. It’s a sure sign that something troubling is brewing under the surface of your culture. This is especially true if coworkers are gossiping about each other behind their backs.

On the other hand, in a healthy work environment, employees lift each other up. As a team, they will celebrate each other's successes, collaborate easily, and trust each other. 

So how can a workplace become so cold and toxic? The above issues and expectations can create an unhealthy environment of competition that causes employees to feel like they're pitted against one another rather than working together towards a common goal.

  • Vulnerability equals weakness mentality 
  • Always be “on” mentality
  • Rewarding “busyness” rather than results
  • Biased decision-making
  • Workload exceeds resources available

In environments like these, one can often sense an invisible power struggle underlying many interactions. Competition between employees is subtly encouraged.  When this behaviour is present, people may take credit for each other's work, go behind each other's backs to get things done or spread harsh rumours among themselves. All of these factors contribute to dysfunctional organizational cultures. 


Concrete Actions You Can Take to Improve Your Workplace Culture

Recognize that cultural change starts at the top.

Culture is more than just perks and programs developed by HR. The only way to accomplish culture change is if all parties take ownership of the issue and are committed to fixing it. This means addressing the harmful workplace conditions or norms that have contributed to worker illness or poor employee well-being. And most importantly, replacing them with safer ones. 

Set realistic expectations around work-life balance.

Suppose you want to build a strong, balanced culture where employee wellness is a priority. In that case, your company needs to set rules and practices around work-life. Setting new boundaries can mean enforcing official "blackout periods" between certain hours where employees cannot send or reply to messages or emails. Or it can mean setting new expectations by praising people for disconnecting instead of praising those who are "always on." Google's recent "Well-being Manifesto" is an excellent example of how businesses can start to explicitly set new, healthier standards and norms for their people. 

Reward outcomes, not politics or busyness

Harmful workplaces are tangled in a web of politics. In other words, delivering value and results isn't enough to get ahead. Toxic systems reward the wrong things -- external appearance, the impression of busyness, or just being similar to others. Systems like these set up certain employees to fail from the start, for example, employees from different backgrounds or those who are quieter and reserved. There is no question that a workplace such as this would harm one's mental health and cause chronic turnover problems.

Be transparent and control for biased decision-making

It's easy for bias to creep into important work decisions, like who to promote or give raises to. And worse, when companies are secretive about why certain decisions were made, it can leave employees feeling suspicious, upset, and frustrated. This negative attitude can stoke the fires of cultural trouble. Controlling for bias is essential to managing perceptions of fairness, and in turn, keeping your employees happy and not pitted against each other. For example, at Google, major decisions (like promotions and raises) cannot be made unilaterally. They are made by a committee of managers. And a similar calibration process is applied to employee evaluations. These steps are critical in ensuring transparency and maintaining employees' perceptions of fairness. 

Provide people with enough resources to do their jobs effectively.

Social events aren't enough to build a well-functioning work culture. It's also about ensuring that employees have enough time and energy to do their best work and cooperate effectively with their peers. For example, getting one employee to do the job of two people might save you money in the short term. Still, suppose that employee is stretched to their limit and is, as a result, highly unpleasant to work with. Or worse, they (and their team members) become disengaged as a result. In that case, you might find yourself with a burnout and turnover problem that will surely have a more significant impact on your business's bottom line in the long run. 

Take action on employee feedback. Praise those who speak up. 

If employees who bring forward an issue to management are only shut down or ignored, how do you think that employee will feel? Building a psychologically safe culture and engaging with employees means sincerely listening to what employees have to say. It also means appreciating them for bringing forth difficult conversions and taking action to make things right when are where you can.

Intentionally increase diversity.

By hiring and building teams with diverse beliefs and backgrounds, you can help mitigate cultural imbalances or dysfunctions. However, many people are unaware of their biases, let alone willing to admit them to others. Consequently, attaining this goal can be difficult. However, it is a goal that has shown to be incredibly fruitful for businesses. As we mentioned earlier, research shows that creating more diversity in your workplace positively impacts culture, ultimately, your bottom line.

Be stern with "bad apple" behaviour.

Exclusion, gossip, manipulation, intimidation, and other problematic behaviour spread like viruses. You can rapidly ruin your company's culture and harm the collective productivity and engagement of your people if you choose to overlook harmful behaviour. Research has even shown that it doesn't take many "bad apples" to spoil the barrel. One study from Harvard showed that avoiding just ONE toxic hire or letting one go quickly translates into a $12,500 cost-saving. In short, a single bad apple can be financially costly for your business.

Final Thoughts

The most common mistake companies make when attempting to improve culture or prevent burnout is only to make superficial changes such as having more social events or adding new HR programs.

While surface-level changes are naturally the easiest to implement, they are often short-lived since they do not solve the underlying cultural issues.

Sadly, there is no silver bullet for building a great work culture. All employees, not just HR or even leaders, must pursue these small, deliberate changes to create and maintain a more balanced and resilient culture. 

That said, you can start building a great culture from the ground up by peeling back the layers and taking a close look at the beliefs, norms, and expectations that drive your organization. The first step is identifying which beliefs are leading to problems and replacing them with healthier practices and standards. By doing this, you can gradually improve your culture and keep people happy and healthy in a real and lasting way

Category Tags

A Happier Workplace


Subscribe and join our community of curious HR Professionals and Managers.