You might have heard the saying, “one bad apple spoils the barrel.” Apparently, it’s true for misbehaving employees too.
A new study looked at the finance industry and what happens when you introduce a bad employee — someone who’s committed some kind of misconduct — to a new team. It turns out that bad behavior can spread.
Will Gerken, one of the co-authors of the study and a professor at the University of Kentucky, joined us to discuss his team’s findings and the consequences this can have for a company. Below is an edited transcript.
Sabri Ben-Achour: So being a bad employee is contagious, apparently. How contagious is it?
Will Gerken: So in our context, we’re looking at the financial advisory industry, which has been in the news somewhat for having some problem with misconduct. And the issue that we see is when you’re exposed to a colleague that’s engaging in these bad business practices, you become about 40 percent more likely to engage in these bad practices yourself.
Ben-Achour: What about good employees. I mean does it go the other way where you meet up with a good employee and they they make a bad employee better?
Gerken: Yeah, so this is a good question. What ends up going on is the employees that are behaving well before they’re exposed to this, they kind of update their own beliefs about kind of the consequences of bad behavior. And so if they see a peer that’s engaging in these practices, and maybe they end up getting an extra bonus because they’re aggressively selling their clients or they get punished but not very severely, they update their own beliefs about these types of behavior, which then causes them to be more likely to engage in bad actions themselves. But on the other side, we don’t see a whole lot of kind of a reduction of misbehavior when you put a bad employee in a good environment. They kind of keep their stripes, as the expression goes.
Ben-Achour: What should people who make hiring decisions who are in charge of putting people together — what should they take from your findings about contagiousness of bad behavior?
Gerken: I think the biggest takeaway in practice for hiring managers is that you need to worry about the spillover effects of having a bad employee. It’s not enough to say, “Hey, I can I can manage this one bad employee.” The cost of a bad employee is not just the internal cost of dealing with that employee, but potentially tainting the culture of all the people that that co-worker works.