Descriptive words about problematic workplaces tend to be used interchangeably. But they really refer to different situations that require different solutions.

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In this article, we’ll differentiate among the descriptors “unhealthy,” “dysfunctional,” and “toxic” so you’ll be better able to recognize them and respond to any impacts they’re having on your organization. Then we’ll discuss strategies to avoid a problematic workplace from the get-go.
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UNDERSTANDING 'UNHEALTHY'

An unhealthy workplace is one with conditions that negatively impact employee well-being but the conditions don’t necessarily stem from intentionally poor behavior.

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For example, if your workplace is unhealthy, your team members may experience poor communication, lack resilience, face unclear expectations, and deal with inconsistent leadership.

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An unhealthy workplace can make employees feel stressed, overworked, or disengaged. Fortunately, the environment will probably improve with better systems or support or leadership changes brought about by improved leadership development, clarifying roles and expectations, or strengthening communication and feedback loops.
 

​​​​​​DEFINING 'DYSFUNCTIONAL'

In contrast to an “unhealthy” workplace, a “dysfunctional” workplace is one where processes, roles, or relationships are poorly managed. This often results in employees experiencing confusion and work getting done inefficiently.

 

What are the warning signs that your workplace might be dysfunctional? Watch for silos between teams, unclear decision-making, frequent conflicts, complaints about too many meetings, people declaring they’re “too busy,” or leaders who avoid accountability.

 

When those warning signs are present, a dysfunctional workplace will often be less productive than it could be, and employees may feel frustrated or directionless.

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Fortunately, though, these issues typically stem from such systemic problems as the following:

 

• Isolated teams that do not communicate. These can lead to inefficiencies, duplicated efforts, and conflicts that could ultimately impact member service.

• Excessive bureaucracy. This can lead to bottlenecks, delays, and missed opportunities.

• Unclear roles, responsibilities, and performance expectations. Having this problem can result in employees and leaders avoiding taking ownership. The symptoms of this include blame-shifting, unresolved issues, and a culture of frustration.

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TRANSLATING 'TOXIC'​

In contrast, a toxic workplace is home to harmful behaviors that actively damage employee well-being and morale. These damaging behaviors can include bullying, harassment, discrimination, manipulation, or unethical practices. When such behavior is present, employees may experience anxiety, burnout, or even trauma.

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Toxic environments often require a significant intervention to change. This could take several forms:

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• Leadership accountability and action. Leaders need to acknowledge issues and ensure real consequences for toxic behavior.

• Policies and reporting. Employees must feel safe reporting toxic behavior without fear of retaliation. Strong policies and fair processes for addressing issues are non-negotiable.

• Structural changes. If toxicity is baked into the culture, systemic changes like leadership shifts or process overhauls are necessary for long-term improvement.

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DOUBLING DOWN ON THE DIFFERENCES

To recap, the terms unhealthy, dysfunctional, and toxic workplaces describe different levels of workplace challenges. Here’s a summary of how they compare:

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• Unhealthy = Strains on well-being are present (e.g., overwork, lack of support).

• Dysfunctional = Poor systems or processes cause confusion and inefficiency.

• Toxic = Harmful behaviors create fear, distrust, or distress.

 

A workplace can start as unhealthy or dysfunctional and slide into toxicity if issues aren't addressed. Identifying the level of concern with your workplace can help you choose the right solutions—from improved communication to leadership changes or culture rebuilding.

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PREVENTING SUCH PROBLEMS IN THE FIRST PLACE

We’ve clarified the differences between unhealthy, dysfunctional and toxic workplaces and identified some key ways to treat these problems when they crop up. Preventing an unhealthy, dysfunctional, or toxic workplace starts with being intentional about culture, leadership, and systems from the beginning. Here are key ways to build a strong, healthy work environment:

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Hire and Promote the Right Leaders. Leaders shape workplace culture more than anything else. Prioritizing emotional intelligence, accountability, and ethical leadership in hiring and promotions helps prevent toxic behaviors from taking root.

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Set Clear Expectations and Accountability. Employees and leaders should have a shared understanding of behavior expectations, company values, and performance standards. A strong culture of accountability—where actions align with values—helps prevent dysfunction.

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Prioritize Psychological Safety. Employees should feel safe to voice concerns, share ideas, and make mistakes without fear of retaliation or humiliation. Encouraging open dialogue and addressing issues early prevents problems from escalating.

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Foster Healthy Communication and Collaboration. Clear, respectful, and transparent communication reduces misunderstandings, office politics, and resentment. Leaders should model constructive feedback, active listening, and inclusive decision-making.

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Proactively Manage Workloads and Expectations. Chronic overwork and unclear priorities breed disengagement and resentment. Ensuring fair workloads, realistic deadlines, and resources for success prevents burnout and frustration.

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Address Issues Early and Consistently. Toxicity often builds up when bad behavior is ignored. Leaders must be proactive in addressing conflicts, enforcing policies, and ensuring all employees—regardless of status—are held accountable for their actions.

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Invest in Employee Well-Being and Development. A workplace that values growth, learning, and well-being is far less likely to become toxic. Offering leadership development, mentoring, and wellness support fosters a culture where people thrive.

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Leaders reach out to me when they’re struggling with organizational problems like these and others. I take the time to fully understand what’s going on and work alongside them to create practical solutions that fit their organization.

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These solutions all promote alignment—and help leaders connect strategy, culture, and people so that everyone moves in the same direction toward good results and a lasting positive impact. If you’re looking for support in developing a workplace where both employees and your business can grow and succeed long term, I’d be honored to assist you.​

 

Carolyn Reeves, MS, SPHR, ACC, CUDE, is a workplace consultant and leadership coach who partners with leaders to build high-performing teams and positive cultures. With over 20 years of talent development experience—including 16 years in a senior position at a $30 billion credit union—she provides practical, real-world guidance, always focused on what drives lasting success: people.​