Australia Has a Problem With Toxic Leadership at Work — and It’s Costing Us Billions

An Australian worker motivation and productivity

Experts are urging workplace leaders to acknowledge the “subtle but corrosive” way that their leadership style can affect the mental health and output of their team. Fear appears to be the biggest driver of workplace motivation for Aussie workers, according to a new study.

An American research firm, commissioned by business leader Margot Faraci, surveyed nearly 2,500 managers and leaders in the UK, the US, and Australia. Their findings indicate that “toxic leadership” is fuelling thousands of Australian businesses, with nearly a third of managers harbouring “unconscious fear.”

“Fearful leadership is fuelling Australian, and worldwide, businesses,” Faraci said. “I’ve seen it for decades and the majority of managers aren’t often aware they’re leading with fear or coming from a fearful response

“Our fear of failure, our fear of being wrong or being outdone has devastating consequences for us personally, for our teams, and overall business performance.”

The survey indicates that fearfulness in leadership is creating less efficient and less psychologically safe working environments. The impact on productivity is thought to be costing the country $2.3 billion a year.

Fearful leadership is defined in the study as going beyond shouting or aggressive behaviour. It includes avoidance, complacency, decision fatigue, hesitancy to express viewpoints, micromanagement, poor feedback, drawing out the opinions of others, and blocking the growth opportunities of colleagues.

An image of Margot Farcai who has conducted a survey on Australian worker motivation and productivity
Image: Margot Faraci / Supplied

“Fearful leadership manifests in subtle yet corrosive ways in our daily interactions,” Faraci said. “Fearful leaders might prioritize short-term gains over long-term employee well-being, inadvertently fostering a tense and anxious work environment. These actions stem from an unconscious fear of losing control.”

Concerningly, the report states that 69% of managers believe that creating stress or fear is a good method for driving motivation within their teams. As a result, those who engage in the technique invoke declines in office morale and strained workplace relationships. On average, 9.5 hours of productive work time is lost per week thanks to these additional stresses.

Faraci identifies the recent reversal of pandemic allowances for workers as motivated by fear. Companies forcing workers back to the office and back to their desks where they can be observed by managers, especially under threat of penalty or unemployment, is about fear over loss of control and a lack of trust in their workforce.

Post-pandemic, more and more workers are being made to accept diminished working conditions on a level with that seen in 2019. Another recent survey found that Australian workers are doing 280 hours of unpaid overtime per year thanks to harsh management styles. Cost of living pressures are exacerbating the conditions, leaving many feeling unable to turn down work out of fear of losing their jobs.

In response to these changing conditions, the survey, entitled ‘Love Leadership’, advocates that employers break the cycle and acknowledge their fearful position in order to foster healthier, more productive working environments.

“The opposite of leading with fear is leading with love,” Faruci states. “Love includes trust, compassion, vulnerability, respect, and other sentiments needed to create psychologically safe environments. It takes a level of self-awareness to reach a love-based response”.

The notion of a paradigm shift in the way workers are treated is part of an ongoing global debate about traditional work culture and the values of younger generations entering the workforce. Typically, it is Gen Z who are copping the brunt of this flak, with criticisms levelled at them for requiring too much praise to do standard tasks. Other studies have shown that praise a few times a month is sufficient to keep younger workers motivated and the Love Leadership survey further emphasises that it is fearful managers who fail to acknowledge the work of their teams.

“Globally, we need to see love as this massive, powerful force we have, rather than something that’s only romantic between two people,” Faraci said.

“Love is nothing to be afraid of, especially in the workplace. Love needs to be redefined so that everyone understands it is the most powerful force on earth that we have.”

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