Toxic managers can ruin a business from the inside out.

Toxic managers don’t have a clue how their behavior affects their employees, or don’t care. They are self-interested, have big egos and don’t respond well to feedback about their behavior.

Here’s an example. Lindsay had just started college and landed a job as a waitress at a nice restaurant. Paychecks came on Fridays when Lindsay wasn’t scheduled to work. She was told during training to pick up her checks after 8 p.m. because managers were too busy to be interrupted during the dinner rush.

For her first paycheck, Lindsay drove the 10 miles and waited in the parking lot until 8 p.m. She then went to the manager’s office and asked for her check.

Elizabeth, the evening manager, told her the rule had changed and that she would have to come back after 9 p.m. – even though Lindsay was standing in front of her, and it would have been easy to hand her the check.

Lindsay went shopping for an hour and came back at 9. When she walked into the manager’s office this time, Elizabeth said brusquely, “When I said come after 9, I didn’t mean at 9:01.” But she gave Lindsay her check.

When Lindsay told her co-worker what happened, he said, “Nobody can stand to work for Elizabeth. That’s why people quit as soon as they find another job”

It is sometimes said a business is only as good as its managers. That might be amended to “only as good as its worst manager.”

An insensitive manager like Elizabeth can do enormous harm to a business by undermining employee morale and motivation, and ultimately causing the most capable employees to go elsewhere.

If the best employees leave – because they are the ones who have other options – the business is left with those who feel trapped because they have nowhere else to go.

How do you recognize a toxic manager?

Toxic managers are not hard to spot. But when they go unnoticed by senior management, it’s usually because they get their jobs done efficiently enough, and the morale problems they cause don’t reach the attention of anyone higher up.

Therefore, the first step for senior leaders is to observe how their managers interact with employees, and how employees respond to them. Following are a few characteristics of toxic managers to look out for:

• They say and do things that are demeaning to others.
• They are not interested in listening to others’ input.
• They always have to be right.
• They are not willing to hear or discuss an opinion different from their own.
• When mistakes happen, they are more focused on blaming than on problem-solving.

How should you handle a toxic manager?

How to deal with toxic managers depends on how uncompromising they are and how generous you are.

If you think you can get through to these managers, you can try coaching. Start by giving frank feedback about what you’ve observed and what others are saying about the managers’ behavior. Don’t soft-pedal it.

Ask these managers if they are willing to make major changes. If they agree, tell them what you expect. Be specific.

Schedule regular meetings to discuss their progress. In the meantime, keep your eyes and ears open. Ask people whose judgment you trust how these managers are doing.

On an annual basis, allow all employees to anonymously provide feedback about the company, manager and work group. The rating scale can start to alert senior management about problems. A portion of the manager’s yearly review process should be associated with the feedback. The feedback can then be collected and training plans developed to address areas of concern and to enhance areas of strength.

The bottom line is that you need to be ready to part ways with toxic managers if they get defensive about your feedback or don’t follow through with the necessary changes.