If a company’s leadership has intentions from the beginning to operate a fast-growing business in an unethical and illegal manner, while maintaining a positive public image, I have observed one possible sadistic model that can be successful, at least on a short term basis.

The CEO needs to be a well-liked, mild-mannered, suave, polished and articulate business person.  His second in command, on the other hand, should be a domineering, short-tempered, intimidating, executive bully who doesn’t take no for an answer.  It’s his way or the highway and he drives the truck that runs over you. The second in command essentially takes direction from the CEO and barks out orders and creates fear across the organization.

The second in command is seen as someone to be feared and most people will never cross him nor question the direction of the company, even if it is unethical or illegal.  All this while the CEO looks like the good guy and the company is considered an excellent corporate citizen.  It’s the corporate version of good cop, bad cop.  Dr. Jekyll and Mr. Hyde in the C-Suite.  This leadership model is confusing to employees on the inside but the public never notices the sadistic practices of the operation.

Welcome to Evil Inc.

According to the 2007 National Business Ethics Survey published by the Ethics Resource Center, the second most observed ethical violation is abusive or intimidating behavior observed by twenty-one percent of employees.  That means one out of every five employees routinely observe the use of abusive or intimidating behavior in the workplace.

Abusive and intimidating behavior is evil, wrong and has no place in the business world. Bullies use the resulting fear to prevent employees from questioning unethical or illegal decisions or methods.  According to the Ethics Resource Center, almost thirteen percent of employees experience retaliation for reporting misconduct.  If you work for Evil Inc. the leaders get what they want and nobody dare stop them. Employees and middle management lack the nerve to question their methods because fear is the weapon of choice at Evil Inc.

Evil Inc., however, is not a long-term going business concern.  Typically the business owners, who are narcissistic and ruthless, run the business long enough to make as much money as possible for themselves before the company folds.  One day everything seems fine to the public then suddenly the company files bankruptcy or closes its doors.  Their voodoo business act is over. The curtain falls on their bipolar management style and operations stop as quickly as they started.  Sadly, the last chapter of Evil Inc.’s story is never a happy ending.

Do you know why patients sue their doctors? Poor bedside manner.  The manner in which doctors behave alongside their patients is the biggest predictor of future malpractice lawsuits.  A physician who treats a patient with respect and courtesy, along with open two-way communication, is unlikely to be sued, even if the doctor makes a mistake in a diagnosis or surgery.  A doctor with a toxic bedside manner who makes a similar mistake, however, should call his attorney and begin working on his defense.

In an effort to find quick, proven ways to predict the probability of malpractice lawsuits, an insurance company discovered a proven method in managing risk; quickly observe how doctors treat their patients. “Patients file lawsuits because they’ve been harmed by shoddy medical care and something else happens to them,” points out Malcolm Gladwell, author of “Blink,” a book on how we make instantaneous decisions without thinking.  These quick and perceptive judgments are quite accurate according Gladwell. The concept, called thin-slicing, is the ability of the unconscious mind to make precise judgments based upon thin slices of experience.

“What comes up again and again in malpractice cases is that patients say they were rushed or ignored or treated poorly,” says Gladwell. “People just don’t sue doctors they like,” states Alice Burkin, a leading medical malpractice lawyer.

This same concept is likely true for employers.  Companies who treat their employees with respect, dignity and fairness, earn the trust of their employees.  Employees typically will not file a lawsuit against an employer who has treated them well.  A company whose leaders have a poor cubicle-side manner, on the other hand, should make sure their liability insurance premium is paid and that they have a good labor attorney.

Toxic work environments create an atmosphere of fear, hatred, mistrust, contempt and brutal office politics. It is only a matter of time when these toxic company cultures begin springing up a crop of wrongful termination claims, sexual harassment charges, constructive discharge lawsuits, race discrimination allegations, unethical executive conduct investigations, insider trading reports by the press, and much, much more.

Pay attention to the signals, good and bad, displayed by your employer’s leadership.  Their cubicle-side manner could be foretelling the future.

CEO’s find the truth hard to handle at times.  Especially regarding employee relations issues, and their resulting effects on morale, quality and productivity.  For example, the CEO may have a hard time believing one of their top performers is a certifiable asshole who is damaging the company’s morale and causing a deterioration of trust in leadership.

The good news is there is a five step program for ridding your company of corporate assholes who have burrowed themselves inside your organization.

Step #1 - Admit assholes are bad for business. Recognize that assholes are bad for the organization. Yes, take that truth syrum and walk over from the dark side to the light.  Believe it or not, there are some CEO’s who think a few assholes scattered throughout the organization actually increase productivity. If this is the case, why not give those assholes some chains and whips to help their cause and instill greater fear.  If fear really works, why not increase the fear for greater effect? Nonsense!  You know it and I know it; assholes must be terminated.

Step #2 - Understand assholes are expert kiss-ups. Understand that assholes are masters at managing up, kissing up and brownnosing, all while causing terror down the corporate ladder.  While you are feeling good about your asshole, he is instilling fear in your organization. As the CEO, the asshole who is your direct report typically makes you feel good when you are around them.  It feels good to have your back end massaged by these clever manipulators.  They are experts at massaging your backside in order to protect theirs.

Step #3 - Adopt, model and promote your company’s code of conduct. I recommend your company also adopt an Anti-Bullying and No-Jerk policy.  Why?  The Workplace Bullying Institute and Zogby research indicate that 37% of American workers have been bullied at work.  That is almost 4 out of 10 employees.  Bullying is four times more prevalent than illegal harassment, yet most companies overlook it.  Because this has become such a prevalent workplace problem, a number of respectable companies have adoped No Jerk Hiring Policies:

“No Jerk Policy” Hall of Fame Companies

Barclays Capital | SPM Communications | Lloyd Gosselink Attorneys at Law

IDEO | Sterling Foundation Management | Gold’s Gym | van Aartrijk Group

Robert W. Baird | The Wine Buyer | Mozilla | Washington Mutual | SuccessFactors

Arup | Goldcorp | Hamilton Canada

Step #4 - Require thorough investigations and no cover-ups. Make sure human resources completely investigates claims of workplace bullying by corporate assholes.  The typical response will be for HR to conspire with or feel pressure from the asshole manager and eventually assist in the firing of the targeted employee or employees.  This allows the evidence to be terminated and walk out the front door.  In other words, assholes like to eliminate their dirty laundry.  Require HR to document the behavior, obtain witness accounts and submit a full written report to the CEO office.  Identify patterns of behavior and provide support to human resources when they recommend bullies and assholes undergo counseling.  Finally, terminate jerks if they don’t straighten up, regardless of their position in the company.

Step #5 - Communicate to stakeholders your company is a Jerk Free Zone. Communicate to employees, applicants and stakeholders your company is a Jerk Free Zone.  Don’t even permit customers to treat your employees terribly.  If you want to create a high-performance team environment, protect your employees.  Sure, develop lofty goals for your team members and create high performance expectations.  Driving out fear in the workplace will almost ensure your organization will be successful. Do this and success will follow you wherever you go.

Success is a team sport. It takes the entire team, from entry level employees all the way up the ladder to the executive suite, to run the company engine on all cylinders.

The environmental factors leading to a company’s failure, on the other hand, typically flows down from the top. It is unfortunate the number of senior executives ready, willing and able to quickly assign the blame of failure squarely on employees. However, the entire workforce doesn’t show up to work and uniformly decide to screw up the company. The common scenario is that leadership begins to make decisions that begin to negatively alter the course of the organization, ultimately leading to its demise.

What are leadership actions that are potential signals the company is headed for trouble? Here are some clues your company could be headed for rough waters.

#1 - Me, Me, Me: When leadership decisions are guided by “what’s in it for me?” This is a sign leaders are less interested in the long-term viability of a company and more interested in their own personal short-term gain. If this is happening it’s like working at Titanic Inc. A good indication this is happening is when company decisions are made based on how it will affect executive compensation and their incentive payouts.

#2 - Communicate is a Four Syllable Word: When the leadership starts to communicate with employees on a “need to know” basis, start running for the exits. When employees read important company news in the newspaper rather than the company newsletter, develop an exit strategy. A lack of communication typically indicates leaders are hiding bad news, making decisions without sufficient input, or possibly courting a new buyer for the company, unaware of the financial benefits of teamwork, making a play on a new company with excessive staff levels, or simply do not like people and avoid employees at all cost.

#3 - Executive Bullies at Work Here: One time I was told by the president it was my fault there was bad Karma in the company. Funny thing I was not the one yelling, screaming and cursing at employees on a daily basis. Employees were being physically and mentally destroyed by an executive bully and I wanted to put a stop to it. As a result, I became the bad guy for trying to curtail an out-of-control executive’s behavior. Now I was considered disloyal to the company. My career was put on ice by a new supervisor where frustrating my every move was his daily goal.

#4 - Lack of Vision: When senior leadership does not make time to adequately explain the vision and mission of a company, employees will lose interest in the company and not engage in the important work of the company. Sometimes executives are afraid they will share their valuable secrets if they talk to employees about their mission, vision and values. Some executives think employees should just know this stuff without the president taking time to explain it. “If you are so smart, why do I have to explain this human resource crap to you,” is the general feeling. People perish due to a lack of vision, states the scriptures. Companies file Chapter 11 due to lack of vision.

And #5 - Who is the President? Besides the need to trust and respect their leaders, employees need to know who is running the company. I once worked at a company where the president was rarely seen walking around in the office. We would go months and months before seeing him. There is a comfort feeling knowing you have an active, engaged president who cares for employees at the helm of the ship. If the president is rarely seen and seldom walks around to visit with employees - except for maybe the Christmas Party - this could be quite unsettling to the workforce. This same president loved to meet with local charities and press gatherings but avoided his own employees. It’s like a football coach going absent from practice and the sidelines during games and only appearing in front of the team when it is time for the news conference. If you have leaders who hide in their execu-caves, the next thing missing might be your paycheck.

Most American workers want to put in a good day’s work. There is a deep desire created in all people to be productive, creative, innovative, inventive, and to leave this world in a better condition. However, our American corporate culture is losing the battle for the hearts and minds of employees and has fallen far from the mark. Rather than working to win the hearts and minds of employees, corporations are driving a stake in the soul of the American worker.

After a two-year feasibility study, the non-profit organization Winning Workplaces identified in their Case Prospectus the cruel realities we face in our current work environment.

• The American workplace, a source of our nation’s strength, is also at the root of considerable burdens for many individuals, families and communities.
• Trust and respect in the workplace is breaking down, with less than 40% of employees believing or trusting their senior managers.
• Employees are feeling less control over their jobs.
• Opportunities are shrinking in the workplace.
• Employees are often forced to choose between work and family due to company demands.
• Workers are becoming more detached from their employers due to globalization and outsourcing.
• Work is dominating the life of the American worker.
• Employees spend, on average, 46 hours a week on their job, not counting time online at home or linked to a BlackBerry away from the office at night or on weekends.
• When jobs are satisfying and challenging, it invigorates employees in other areas of their lives.
• When the workplace deflates, frustrates and demeans people, workers are robbed of their energy and desires needed to optimize performance as spouses, parents and citizens.
• Up to 66% of employees say they regularly experience high levels of stress on the job, a significant and growing public health concern leading to drug abuse, mental health problems, accidents and absenteeism.

There is no better time than today to help companies create great workplaces.

Our citizens need great workplaces to be fully productive. Our children need their parents to work in physically and mentally healthy work environments to prevent toxic workplace residue from coming home. Our society needs great workplaces to reap the rewards of successful employees and organizations. Non-profit organizations benefit from the increased volunteerism that happens as a result of great work environments. The health of our nation depends on the creation of great workplaces where employees are treated respectfully. And business owners need great workplaces to survive global competition and enjoy long-term financial success.

Organizations where the employees have identified their workplace as a great place to work are far superior economically and socially. The Great Place to Work Institute has shown in its research it pays to provide a great workplace.

Win the hearts and minds of your employees and you will outperform your competition and increase the return to your shareholders.

There is an erroneous business idea that one must be edgy, short-tempered and tough to get things done. Here’s a news flash for those who have operated under this paradigm; jerks are out - nice people are in. Toxic workplaces are out - great places to work are in.

For a business to enjoy long-term financial success, leaders and employees must restrict their inner evil desire to beat people down in order to lift their egos up. Long-term success is derived from treating people kindly and respectfully. Work with others the way in which you want to be treated. We have known this truth since grade school but some difficult personality types have suppressed this right way to live and work.

I won’t return to a hotel where the staff is rude. Although I usually stay at a hotel for only one or two nights, I will not go back if one employee is rude to me. Yes, one employee!

A restaurant can have the best food in the city but if their employees are edgy or rude, I won’t go back. I don’t need the aggravation.

We avoid cranky people in the service business. How about when you are looking for an employer? When you are interviewing, researching and selecting a new employer, you may work for the company ten years! You want to know if that place is filled with friendly or angry people, don’t you?

In the very near future, it will be common for employees to avoid companies whose leaders and/or staff are rude. Toxic work environments will be measured and reported online. The dirty secrets that companies used to conceal will soon become public knowledge.

The work climate is changing in a positive manner because great workplaces are part of a healthy workplace component. Employee productivity is directly tied to environmental factors, including the toxicity of the culture. In the near future, jerks will find themselves out of business or unemployed.

Before going on vacation, my wife researches hotels and resorts by utilizing www.tripadvisor.com. This valuable site rates a destination’s hotels, from best to worst. The site provides actual guest photos and comments. The site has saved us from bad properties a number of times. It prevents us from selecting the wrong hotel. In many cases, TripAdvisor.com has helped us select the best hotel.

Similarly, in the distant future, job applicants will likely be granted access to a website that rates employers from best to worst. Why? The best employers need a place where their excellent qualities can be showcased. Companies who employ bullies and tyrants need to be made public so the best people don’t take positions in toxic work environments.

This will be a win-win situation. Great workplaces will win by showcasing the actual work experience of their employees. Employees will win by having the tools to prevent a job change to a toxic work environment.

One by one, a long line of unsuspecting recruits accepted, and eventually quit, the marketing assistant position. The problem was the department manager. Although clever and politically connected, her devilish ways wreaked havoc on her people. Each time the position opened up, recruiters would search for the right candidate with Teflon skin and stone-cold emotions. Most victims, however, transferred to another department or altogether quit within a few short months.

It didn’t usually take more than a week or two before the next new recruit would schedule their first meeting with our employee relations manager to solicit advice in dealing with their bully boss. With a leadership blind spot the size of Nova Scotia, the marketing manager was convinced each new recruit was a complete idiot. She never accepted individual responsibility for her own department’s revolving door.

Then there was the employee who had a nervous breakdown during the lunch hour.

After just a few weeks on the job, the assistant had to be hospitalized in a mental health facility after she was found by police, dangerously parked on a busy expressway. Apparently she mentally shut down after experiencing weeks of severe anxiety trying to cope with the maddening manager.

As the HR director, I expressed my deep concern to the president that it would be completely unethical to hire one more potential target for this inhumane manager. Her evil management style literally caused the employee’s nervous breakdown.

You think this decision would be a no-brainer, right? Wrong! Although she was the queen of caustic culture, the president felt she was technically competent and too valuable to terminate.

Why do companies put up with bullying managers? According to the 2007 Workplace Bullying Institute-Zogby Survey, bullying is inhumane but not illegal. Results of the survey showed the following reasons workplaces continue to employ health destroying bully managers.

• Forty percent (40%) of targets do not come forward.
• In 80% of cases, bullying is legal.
• Sixty-two percent (62%) of employers either do nothing or worsen the situation by retaliating against the target.
• Seventy-three percent (73%) of bullies are managers - senior managers and HR reflexively side with management when disputes arise.
• Bullies derive 73% of their support from executives, peer managers and HR.
• Executives are afraid to act. They have a disproportionate fear of lawsuits brought by the bully if they dare investigate or sanction the bully.
• Bullies invented their reputation as indispensable high-performers in case they were ever exposed. Target complainants are then not believed.
• Employers don’t actually know how to stop it. They forgot the lessons learned from having to correct and prevent illegal discrimination.
• Employers don’t recognize bullying as violence in the workplace. The problem is erroneously defined as “conflict,” and the wrong solutions are applied.
• Our society is highly aggressive and competitive. Bullies embody these two popular tactics. Hostility is more normative than the exception. So, bullying, abuse and psychological violence at work is positively embraced more often than despised.

Before taking a position with a new company, how does one avoid a toxic company culture? Applicants are well within their rights to interview current employees to obtain honest feedback on the company culture. If you are not allowed to interview existing employees of your choice, this could be a sign your future employer is hiding a toxic workplace. For those in the job market, the following are potential clues a workplace has a noxious work environment.

• Employees are not allowed to voice their honest opinion on workplace issues.
• Employees fall in or out of leadership’s favor without explanation, and as a result, are included or excluded from company events, projects or meetings.
• Employees with opposing viewpoints are not welcomed visitors to the executive suite.
• Employees are fired without warning or explanation, nor are they given the opportunity to address the real issues leading to their departure.
• Receptionists and assistants tend to be beautiful, attractive eye-candy for chauvinistic executives.
• Overweight people are routinely urged by leadership to exercise and made to feel inferior to their slender coworkers and leaders.
• Employees are expected to assume heavier workloads and work excessive overtime while legitimate requests for headcount increases are denied, all while the company is promoting the importance of work/life balance.
• Employees with excellent reputations are abruptly fired or transferred because their performance is suddenly unsatisfactory.
• The human resources department is viewed by leadership as an administrative function or transaction facilitator rather than a partner in developing great people and work environments.
• The human resources department merely follows orders from leadership and is afraid to question company practices.
• Rude behavior is routinely allowed.
• Employees who treat people with trust and respect are considered weak and not management material.
• Tough, no-nonsense supervisory behavior is rewarded.
• Executives are assigned reserved parking spaces.
• The CEO and his/her executive team rarely walk around the office to visit with employees.
• Company information or news is not consistently shared with the entire workforce.
• Employees routinely read breaking news about their company in the local newspaper or online news services rather than from internal company publications.
• Press releases are distributed to public media outlets prior to employee distribution.
• Political views of the leaders are expressed to employees, and the employees are expected to blindly support and/or vote for those causes.
• Executives have their own restrooms.
• The company has a code of conduct policy but does not provide regular training to leaders or employees.
• Employees are expected to intuitively know what is expected from them without explanation and can be disciplined for not following these unwritten rules of conduct or performance.
• Employees who raise legitimate company issues are summarily terminated without cause.
• Executives hire C-level and professional staff outside the approved recruiting process and do not carefully consider the recruit’s management style or their potential impact on company culture.

Your chest is pounding. Anxious feelings resurface as painful office altercations replay in your mind causing a sick feeling in your stomach. Your shoulders and neck begin to tighten and ache. Your mind ruminates over last week’s noxious encounter with a bully manager and his evil recruits. Although Sunday is supposed to be a restful day to invigorate your mental and physical wellbeing, you find yourself mentally clocked-in at the office, clocked-out at home, and woefully dreading the next day to begin. Sound familiar?

Unfortunately, this is a common Sunday afternoon mental exercise American workers relive at the beginning of many work weeks. Sadly, the recurrence of fear and trepidation on Sunday is well-founded. Researchers discovered a few years ago the deadliest time of the week is Monday morning as workers return to their job. There are twenty percent more incidents of heart attacks on Mondays due to the stress of returning to toxic company cultures with abusive managers.

Although brave soldiers have sacrificed and the United States have spent billions to stop violence against defenseless countries and our world allies, our nation has not gained control of the increasing psychological violence inside the borders of the American workplace. Civility, trust and respect seem to be losing ground to schoolyard-type bullies who work in the corner office. Competition for promotions, raises and bonuses can bring out the worst in people. If results at any cost are rewarded, company managers and employees may resort to bullying behavior to get things done; an unethical, inhumane, but perfectly legal management technique in America.

Although it is illegal to discriminate against women or minorities based on sex or race, it is perfectly legal in the United States for an unreformed-schoolyard-bully-turned-executive to yell, scream, berate, curse, belittle, exclude, or be downright cruel to employees. According to Dr. Gary Namie, Workplace Bullying Institute, “Bullying is mostly legal. Employers can ignore it with little risk. However, it is four times more prevalent than illegal status-based discrimination.”

Some companies encourage and reward bullying tactics that force employees to cower and passively accept their role to do what you are told. Typically, an employee who complains of such bullying behavior to human resources will eventually be terminated in a matter of days, weeks or months. Although human resources should review, investigate and resolve each employee relations issue in an objective manner, human resource professionals and friends of the bully tend to turn against the target of the bullying behavior.

When company leadership adopts, models and promotes positive people practices and initiates the process of creating a great place to work, the toxic levels inside the organization will begin to fall and employee energy and engagement will begin to rise.

Anyone can have a bad day and lash out at a coworker. Civilized people will later apologize for their poor behavior. On the other hand, there are certifiably rude people in corporate America who have made incivility, rudeness and verbal abuse a way of life in business. The companies who employ these violent neanderthals in business suits should beware of their negative consequences.

In a recent behavioral study reported by Harvard Business Review, it was determined that workers on the receiving end of verbal abuse became impaired in their ability to perform tasks. According to researchers, “their studies indicate that after exposure to rudeness, people think hard about the incident—whether just ruminating or trying to formulate a response—and those thought processes take cognitive resources away from other tasks.”

“The mere thought of being on the receiving end of verbal abuse hurts people’s ability to perform complex tasks requiring creativity, flexibility, and memory recall,” according to Christine Porath of the University of Southern California’s Marshall School of Business and Amir Erez of the Warrington College of Business Administration at the University of Florida.

The study also found the environmental impact of rudeness to be very profound and overreaching to even those outside the receiving end of the abuse. Researchers stated, “Verbal abuse affects more than just those who experience it directly; it apparently can harm innocent bystanders.”

If you want your company culture to deteriorate with increasing doses of fear, risk aversion, inability to make decisions, and lack of communication, employ or promote rude people. In other words, trying to create a great workplace while employing rude people is a recipe for failure.

It is common for business leaders to allow executives, rainmakers, and movers and shakers to behave in a rude manner, including verbal and psychological abuse. Leaders falsely believe the rude rainmaker’s contributions overcompensate for the toxic venom they spew in the office. Some mistaken leaders believe a toxic tyrant’s abuse causes employees to work harder.

Do you want to build an energized, profitable and high-performance organization? Require your leaders to take a stand against rude behavior. At times doing the right thing is difficult—it calls for strength of character—but it brings great rewards. The CEO must weed out abusive employees no matter their position in the organization. By doing so, the organization can return to an environment conducive to creativity, flexibility, productivity and profitability.