84. Handling a High-Performing but Toxic Employee
How to manage difficult personalities without losing top talent.
Imagine this - A top performer consistently exceeds targets and delivers exceptional results. However, they belittle colleagues, resist feedback, and create tension within the team. Over time, you notice -
Team morale declining, as coworkers struggle to work with the difficult employee.
Increased turnover, as valued employees leave due to the toxic atmosphere.
Collaboration issues, as teamwork is hindered by conflict and tension.
Leadership credibility being questioned, if bad behaviour is tolerated for the sake of performance.
While high-performing employees bring immense value, toxic behaviour can erode company culture, productivity, and team cohesion. Left unaddressed, even the best talent can do more harm than good.
HR psychology tells us that toxic behaviours often stem from ego, unchecked ambition, or poor emotional intelligence. If management fails to act, it signals to the team that toxic behaviour is acceptable.
The challenge? How do you balance retaining top talent while ensuring workplace harmony and respect?
The Solution – A Three-Part Approach - Identify, Address, and Reinforce
Managing a high-performing but toxic employee requires recognising the impact, addressing behaviour with accountability, and reinforcing positive workplace culture.
1. Identify the Signs & Impact of Toxic Behaviour
Before taking action, leaders must assess how the employee’s behaviour affects the workplace.
A. Recognise Common Toxic Traits
Consistently undermines or belittles coworkers.
Resists feedback, coaching, or collaboration.
Displays arrogance or entitlement in the workplace.
Causes team tension, low morale, or workplace conflicts.
Red Flag - If employees avoid working with the individual, productivity and engagement may suffer.
B. Measure Performance vs. Cultural Impact
Is the employee’s output worth the cost of their negative behaviour?
Have other high performers left due to toxic interactions?
Are complaints about the employee frequent and consistent?
HR Psychology Insight - High performance does not excuse bad behaviour—long-term success requires both results and respect.
C. Assess Leadership’s Role & Accountability
Has management enabled toxic behaviour due to performance?
Have past issues been addressed inconsistently or ignored?
Are clear behavioural expectations established and enforced?
HR Best Practice - Failing to address toxicity damages leadership credibility and fosters a culture of fear or resentment.
2. Address the Toxic Behaviour Professionally
Once toxic behaviour is confirmed, it must be addressed fairly yet firmly.
A. Provide Direct & Constructive Feedback
Schedule a private conversation to discuss specific concerns.
Use a fact-based, non-emotional approach to describe behaviours and their impact.
Encourage self-awareness by asking, “How do you think your behaviour affects the team?”
Red Flag - If the employee immediately becomes defensive or dismissive, stronger interventions may be needed.
B. Set Clear Expectations & Boundaries
Establish non-negotiable behavioural expectations.
Explain that performance must align with teamwork and professionalism.
Outline consequences for continued toxic behaviour.
HR Psychology Insight - Employees with unchecked toxic traits often push boundaries until clear limits are enforced.
C. Offer Coaching & Support for Change
Provide mentorship, communication training, or emotional intelligence coaching.
Encourage collaborative projects to improve teamwork.
Give a structured timeline for behavioural improvement.
HR Best Practice - Some toxic employees can improve with guidance—but change must be genuine, not just performative.
3. Reinforce Workplace Culture & Accountability
To prevent future toxicity, leaders must maintain a strong and fair workplace culture.
A. Ensure Consistency in Handling Toxicity
Do not tolerate double standards for high performers.
Apply fair and consistent discipline for all employees.
Reinforce that results do not justify harmful behaviour.
Red Flag - If exceptions are made for certain employees, team morale and trust in leadership may erode.
B. Promote Positive Workplace Values
Recognise employees who demonstrate collaboration and respect.
Reward those who enhance, rather than disrupt, team dynamics.
Reinforce cultural values in performance evaluations and promotions.
HR Psychology Insight - Employees should be rewarded for both their contributions and their ability to work positively within a team.
C. Be Prepared to Let Go When Necessary
If behaviour doesn’t change, termination may be the only solution.
Protect the organisation’s culture and morale by prioritising team well-being.
Ensure a structured offboarding process to minimise disruption.
HR Best Practice - No single employee, regardless of performance, should be indispensable if they harm the broader team.
Reflective Scenario – What Would You Do?
A high-performing employee consistently meets targets but disrupts team cohesion with condescending remarks and resistance to collaboration. Coworkers have expressed frustration, and some are considering leaving.
Using the strategies above, you might -
Hold a private meeting to address the specific toxic behaviours.
Set clear expectations for respectful communication and teamwork.
Offer coaching or training to help develop better interpersonal skills.
If no improvement occurs, consider disciplinary action or termination.
By enforcing a balance between performance and workplace culture, SME leaders can retain top talent while maintaining a healthy, motivated team.
Golden Nugget - "Great results never justify toxic behaviour. A truly valuable employee drives both success and positive team dynamics."
By applying awareness, structured intervention, and reinforced accountability, SME owners can ensure high-performing employees contribute to workplace success without compromising company culture.