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Evolving from a City of fear

Sun, 1st Feb 2004

WORKPLACE bullying is part of the dark side of organisational life. And it is taking on disturbing proportions. One study in 2000 found that 10 per cent of UK employees had been bullied - that is, suffered persistent, demeaning harassment - over the previous 12 months and 25 per cent had in the last five years.

When Mercer HR Consulting investigated two years later, it reported that one in five employees said they had been bullied in the last year - and even more in the case of middle managers, nearly 24 per cent of whom had been victims. Seventeen per cent of senior managers said they had suffered the same way.

The bullying of managers was particularly worrying, according to Mercer, because it suggested that the practice was endemic.

This suspicion is reinforced by the extraordinary incidence of bullying in occupations such as healthcare (28 per cent in the last year) and the City (50 per cent, according to a hard-hitting BBC documentary, The City Exposed , last year). Although they are at opposite ends of the earning and status spectrum, it's no accident that these professions are similarly disfigured: both are fiercely target-driven, fear-ruled cultures in which the pressure on managers to make demanding, if not impossible, figures is systematically transmitted down through the ranks.

In the public sector, abuse often takes the form of what might be called bullying by bureaucracy: making unreasonable demands of people doing repetitive work with no control over their working conditions (call centres spring to mind).

The City, however, has taken bullying to another plane. In parts of the Square Mile, management is just a euphemism for institutionalised bullying. The BBC programme and some lurid court cases have painted a picture of tyrannical, abusive, even pathological, behaviour that seems more more appropriate to a prison or the Mafia than to a twenty-first century workplace. Last year broker Cantor Fitzgerald had to pay a former employee nearly pounds 1 million compensation for months of obscenities, threats and public humiliation.

Depressingly, these extre-mes are often tolerated as the price to be paid for exorbitant salaries. In some cases they are worn as a badge of honour.

Cantor appealed against the judgment. One City head-hunter told the BBC: 'Why should it be changed? If you can't stand the heat, get out of the kitchen. This is a Darwinian City... If you are not fit enough to survive you will be killed off - and quickly.'

This, not to put too fine a point on it, is bollocks. Bullying is evidence of dysfunctional, out-of-control organisations and people, and carries huge direct and hidden costs. For individuals, these include loss of earnings, esteem and identity, leading in some cases to breakdown and even suicide. According to the 2000 study - by Umist, the University of Manchester Institute of Science and Technology - bullying victims had the worst health, mental and physical, the highest sickness absenteeism and intention to leave, the lowest commitment and job satisfaction and the poorest productivity.

More insidiously, says Lancaster Business School's Professor Cary Cooper, who co-wrote the report, there seems to be a 'passive bullying' syndrome where those who witness it are similarly demoralised.

It's hard to make precise calculations of the overall cost to organisations of this kind of behaviour. In a report for the International Labour Office on violence and stress at work, Cooper noted that to the direct cost of days lost should be added a possible drop of between 1.5 and 2 per cent in productivity, the cost of complaints and grievances, retirement costs and reputational damage.

He estimates that these could cost some firms the equivalent of between 5 and 15 per cent of turnover - 'for large companies the difference between profit and loss'. Cooper sees the City's bullying culture as the product of a high-stress, performance-driven environment, coupled with the fact that newly promoted managers are usually good brokers or traders with no preparation for managing people. 'As managers they assume they have to reproduce what was done to them,' Cooper says. 'This makes the City a perfect breeding ground for bullies.'

It's true that in many high-pressure occupations the 'stressometer' needle sometimes lurches into the red - newspapers are not for shrinking violets, and jour nalists are known to become boisterous on occasion. But there is a world of difference between robustness and sadism, and the line is increasingly being drawn by the courts. As new legislation takes effect, a host of damaging court cases against City firms is expected in the next few months.

That's one reason why things may start to change in the City (the public sector may be another story). The other is that in an unpredictable world extreme command and control, of which bullying is the extension, is a losing strategy.

Fear, it has been well observed, makes people stupid, and an organisation based on it is an evolutionary dead end. As with the first Neanderthals, good riddance.

The Observer, 1 February 2004


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