The recent news that Uber Founder Travis Kalanick will be stepping down as CEO hasn’t come as much of a shock to the public. A number of scandals rocked the hypergrowth company this year, revealing the toxic organizational culture that has grown internally. The scandal that began Uber’s spiral downward came on February 19 when Susan Fowler, a former engineer, wrote about her Kafkaesque experience at the company.
Sadly, this is not an isolated story. The most common reasons cited by women who leave the tech industry are a lack of opportunities for advancement, a hostile work environment and dissatisfaction with senior leadership. In fact, studies show that 40% of women with engineering degrees quit or never enter the profession, with the vast majority leaving due to hostile work environments. But how do so many young tech companies, like Uber, develop these types of toxic atmospheres and what can we learn from cases like these? Here are 4 common mistakes Uber made and how companies can overcome them:
1. Toxic people
It’s not only technical skills that are needed in a manager, the ability to coach, empower and help employees develop are essential. It goes without saying that there are certain behaviors, including sexual harassment, which are never acceptable. So many tech companies are focused on holding onto their star employees but if you allow toxic people to remain and wreak havoc on your team (especially in management positions) you’ll create an environment in which your workforce will not be able to grow, innovate, share their ideas and ultimately will leave.
Don’t sacrifice your future top performers for current ones who are keeping others down. As Fowler explained, Uber had become a competitive “Game of Thrones” style environment in which people were undermining their superiors, peers and reports to get ahead. When a highly competitive and unethical work environment emerges, it’s even more likely that toxic behaviors will be overlooked or ignored. The fact is that these behaviors start somewhere.
Indeed, according to an article in Harvard Business Review, “It’s better to avoid a toxic employee than hire a superstar”, 46% of employees who have worked with toxic workers had a higher chance of being fired for misconduct. If this kind of behavior is silently accepted, especially when displayed by managers, it can lead others to emulate toxic and unethical practices resulting in the very common instances of “boy’s clubs” we see in the tech world.
This means that not only are toxic managers creating a hostile environment for female employees, they also implicitly encourage toxic norms to develop within the rest of the team.
Keeping on toxic employees can result in $12,500 in turnover costs. When taking into account litigation fees, fines, low employee morale and unhappy customers the resulting cost could be up to $25,000 or even $50,000. Though the study found that toxic workers are often high performers, with star employees only adding an extra $5,300 to a company’s bottom line, the long term consequences of keeping them on seriously outweigh the extra revenue they can bring in.
2. Checks and balances
In her blog post, Fowler explained that she was given the choice to either be moved to a different team or possibly face receiving a negative performance review from her manager. As we also saw in the case brought by Ellen Pao against Kleiner Perkins in 2015, when women report an incident about their manager they’ll often face backlash in their performance review. If their manager (or managers) is the only one reviewing their performance, speaking out can easily result in the victim being blocked from any future opportunities.
Rather than simply having one top down review, allow each person to receive feedback from multiple perspectives including peers and reports. Having 360 degree reviews allows for checks and balances enabling people to receive a wider range of perspectives on their performance. Upward feedback is another essential and something that should also be taken into account. As Fowler mentioned in her blog post, her’s had not been the first complaint against the manager in question.
Another incident Fowler mentioned in her post was the denial of her request for a transfer, despite having two excellent past performance reviews. The first time her request was denied she was told first that there were “undocumented performance problems” blocking her transfer. After waiting for the next round of performance reviews, she was informed that her review and score had been changed without her knowledge. For the review process to be fair and effective it must be completely transparent. Changing a performance review or including “undocumented performance problems” only creates mistrust and the potential for it to be used as a tool against, rather than for employees.
A number of studies have shown that bias and inequality can often become entrenched through vague feedback and intransparent performance review practices. A number of studies have shown that while men are described as confident and assertive, when women display the same behavior, they are more often described as abrasive, irrational and aggressive. What’s more, women are more likely to receive critical feedback without any suggestions of ways they could improve or develop.
Managers must be trained to give feedback that is truly constructive and objective. This includes basing comments on specific examples and facts, rather than vague character assessments. One way to do this is to focus on verbs rather than adjectives. Furthermore, it must always be actionable. If feedback doesn’t include some way the person could improve, it’s a sign that it could be based on subjective conclusions.
Employees should always be allowed to respond to feedback and be given complete information about the reasons why they were given a particular score. If a manager is genuinely giving their employee feedback that is meant for improvement this will be followed up by regular 1-on-1 coaching conversations.
Each individual’s past feedback and performance reviews should be kept in a documented report that is accessible to both the manager and the employee. This should stand as the official report which HR can reference in the event of an incident.
There should always be a direct way for employees to contact and speak freely with HR, without fearing potential backlash. This case clearly shows the power of the Glassdoor Age, with CEO Travis Kalanick now coming out to say he had no idea of what was going on in his company and calling on the Chief of Human Resources to investigate the claims.
Today employees have the power to bring everything from sexual harassment to unequal pay to the public view via personal blogs, Glassdoor and other platforms. In one day the case was already picked up by the New York Times, Fortune and Bloomberg. Rather than working against individuals, HR should be genuinely helping to stamp out negative practices and create a positive work atmosphere.
Sweeping this kind of behavior under the rug can impact a company in multiple ways: increase turnover (especially of female employees), deter talented female hires, lower engagement and morale, push back talented employees from advancing within the company, and ultimately impact a company’s bottom line with customers becoming disenchanted with the scandal which will sooner or later hit the headlines. Taking these points into account and learning from cases like Susan Fowler’s will help companies create a positive work culture that encourages, rather than undermines diversity.
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