Why Bullying could be costing you sales and eroding your profit

A report released by Massey University in late 2009 revealed that 18% of persons surveyed in four industries reported that they had been the victims of bullying in the workplace. Yet anecdotal evidence tends to suggest that employers turn a blind eye, either because they are in denial that it is actually occurring (preferring instead to believe that the bully is a firm manager) or they lack the training to respond adequately to the problem. 

However, turning a blind eye could be costing sales and eroding profit.

When bullying occurs

Whilst bullying can occur in many scenarios, in the majority of cases workplace bullying occurs between people in an organisation who are at different levels in the hierarchy. The bully uses his or her position in the hierarchy to exert unwelcome power and coercion over the victim to achieve what the bully wants the victim to do, sometimes with success, but often not. This is the style of the tyrannical leader. 

In contrast, true leaders don't have to exert power in order to persuade people to follow them. Their followers follow out of free choice because the leader is seen as an ally, coach, or mentor to them. Both the leader's and the follower's goals are aligned to those of the business.

Both tyrannical leaders and true leaders can achieve success which is why identifying bullying can become problematical for the business owner or the manager. However, the tyrannical leader's success comes at a cost, and it is this cost which the business owner needs to stop.

The cost of tyranny

The extent to which an employee can withstand a tyrannical leader will depend on the individual's ability to implement coping strategies. One coping strategy may be simply to leave the bullying environment and resign. This represents a cost for the business owner who then has to recruit and train a new person. If the same thing happens again, the cost of recruitment and training become burdensome on the business and starts to eat into the profits.

Another coping strategy may be to make a complaint. That inevitably will suck up administration time in your business as you or someone else has to deal with the complaint. Once a complaint has been made the likelihood is that either the bully or the victim will leave the business, thereby causing further recruitment and training costs. If the complaint is not handled properly, a personal grievance may arise which in turn may entail legal fees and a possible negotiated payout to the victim or to the bully.

Alternatively, the victim may do nothing and endure the bully. This in turn will increase stress and will lead to a downturn in productivity, increased absenteeism, and may also affect the morale of other staff who witnesses the bullying firsthand. As a consequence, the workplace becomes disengaged. Statistics on disengaged workforces reveal that a disengaged workplace produces 60% less sales than a fully engaged workforce.

So what do you do?

The simple answer to this problem is not to turn a blind eye. To be proactive you must do three things:

1. Have systems in place which identify whether bullying is occurring. Since bullying causes stress and stress is a hazard under the Health & Safety (in Employment Act) 1992, you have a legal as well as a moral obligation to do this;

2. Create a culture in your organisation which prevents bullies operating effectively. By doing so, you can show that you have taken steps to prevent bullying in your workplace in accordance with your obligations under the Act;

3. Have procedures in place for responding to complaints of bullying. Not all complaints will be genuine so you will need to determine which are and which are not, and have systems in place for dealing with those that are genuine. If you don't have these systems in place, then the likelihood of you receiving a personal grievance is significantly increased with the further likelihood that you will need to invest more money in legal fees.

Putting all these systems in place may seem like a lot to do, but the starting point is to acknowledge that bullying is a problem for New Zealand businesses. The recent research by Massey University indicates that it is a greater problem than we may think and if every business owner can be alert to the problem then the chances of New Zealand business stamping out bullying are all the more increased. Once you have acknowledged the potential problem the second step is to resolve to do something about it and the starting point is to assess your organisation and see whether it is an organisation whose culture allows bullying to flourish or whether it is an organisation that does not tolerate such behaviour.


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