CHRR 2010 Langbert Managing Psychopathic Employees1 PDF
CHRR 2010 Langbert Managing Psychopathic Employees1 PDF
CHRR 2010 Langbert Managing Psychopathic Employees1 PDF
Mitchell B. Langbert
The past three decades have seen one ethics debacle after another. No one knows if
business ethics have changed since the days of Jay Gould and the robber barons, but the
corporate scandals of recent years make it seem as though ethical standards are worse
now than in the nineteenth century. A 2009 PricewaterhouseCooper global crime survey
found that 30 percent of corporate officers have experienced fraud in the past 12 months,
with about half of the crimes occurring within their firms.1
What if a small but definable subset of the employee population were responsible for a
major share of corporate crime and ethical breaches? If so, then developing policies that
target them would improve the firm’s performance, not to mention its ethical climate. In
this article I claim that psychopathic employees constitute such a subset, and I suggest
human resource policies that can help firms cope with them.
Traditional management theories overlook the issue of corporate crime as well as the
deeper, underlying pattern that psychopathic employees pose. Even the accounting-and-
control literature on workplace fraud has neglected the possibility that some employees
tend to do wrong. The most influential model of workplace dishonesty is in Donald R.
Cresey’s Other Peoples’ Money.2 Cressey’s model of workplace theft focuses on
employees who occupy fiduciary roles and are motivated to embezzle by a lapse in
conduct (e.g., drug addiction). In contrast, psychopathy is a life-long pattern.
I recently asked the listserv of the Labor and Employment Relations Association whether
any participant knew of workplace policies concerning psychopathic employees. I
received several replies about policies concerning alcoholic, bullying, and violent
employees; and several that mentioned Harrison Trice’s notion of constructive
confrontation in Employee Assistance Plans.3 But none addressed the separate question
of psychopaths. Psychopaths can be alcoholics, can be bullies, can be violent, and are
anti-social—although the kind that flourish in the corporate world do not evidence these
characteristics—but understanding psychopathy requires a different approach.
© 2010 Cornell HR Review
What is Psychopathy?
Only about 1 percent of the general population is psychopathic, and a 2010 study found
that three to six percent of corporate employees may be responsible for the majority of
ethical breaches in corporations. Furthermore, corporate psychopathy tends to be
concentrated at the higher levels of organizations. Coincidentally, several of the
emotional aspects of psychopathy positively correlate with performance appraisal
dimensions, such as communication skills, creativity, and strategic thinking.6
2
© 2010 Cornell HR Review
believed himself, Fastow, and other Enron senior executives to be geniuses—“guys with
spikes”—who were capable of coming up with major breakthroughs even though literally
hundreds of their ideas failed and occasionally involved criminality.
In his book Without Conscience, Hare points out that the symptoms of white collar
psychopaths differ from those of the more general syndrome. They tend to be
manipulative, glib and grandiose but less anti-social than blue collar psychopaths.9
Skilling’s case illustrates this pattern. He emphasized mark to market accounting that
recognized earnings before they materialized because, he claimed, creativity was all that
mattered. He held to this claim even as Enron collapsed because of repeated failures in
execution.
Ordinary interpersonal skills can be manipulative. But psychopaths do not feel remorse at
lying or manipulating, and they will lie without limit. Psychopaths frequently contradict
themselves, and they enjoy harming and bullying others. They cause conflict and
turnover, and in the case of Enron, even when thousands of employees had lost their jobs
and their 401(k) benefits, Skilling believed he had done nothing wrong and passed a
polygraph testing this belief.
In Snakes in Suits, the authors argue that corporate psychopaths follow a pattern that
involves pawns, patrons and patsies.10 Psychopaths recruit pawns such as lower-ranking
employees or peers, whom they can manipulate. Patrons are higher-level managers whom
the psychopath wins over. The patsies are pawns and patrons whom the psychopath has
abused. Frequently, psychopaths are charming and can be expert at grasping others’
psychological needs. They are excellent at the kind of impression management that is
essential to corporate success. Because the psychopath seems charming to higher-ups and
co-workers, he or she can counter accusations. In Skilling’s case, Andrew Fastow and
Kenneth Lay played the roles of pawn and patron. Kenneth Lay and Enron’s board were
convinced the special purpose entities were legitimate and that Enron’s investments were
performing well.
Because psychopaths lack empathy, emotion and conscience, they have no qualms about
harming their employer or their boss. Not all want to climb the corporate ladder; many
seek power or the thrill of manipulating others.
3
© 2010 Cornell HR Review
Tests for psychopathy, like Robert D. Hare's Psychopathy Checklist Revised (PCL-R),
require a trained psychologist to administer and cannot be applied in staffing or employee
assessments. Other assessments, such as integrity tests and biodata, are unlikely to work
because psychopaths are naturals at gaming tests. Psychopaths have no qualms about
inventing fictitious biographical information. They see themselves as having integrity and
are likely to depict themselves as so. They enjoy lying.
Babiak and Hare recommend that firms use structured behavioral interviews to ferret out
psychopaths.11 In structured interviews, the interviewer asks the interviewee to describe
his or her responses to past problems. Every interviewee should be asked the same
questions involving either how they reacted to past circumstances or how they might
react to future circumstances. HR would then review answers for inconsistency. Multiple
interviewers should compare answers to the structured interview questions. A candidate
who is flattering to a higher level interviewer but condescending toward a lower level
interviewer may be psychopathic. Thus, interview processes should include lower level
employees. Applicants who are rude to them should be rejected.
Monitoring systems can be simple. Some firms have adopted anonymous tip lines.
Discussion of teamwork and integrity in performance appraisal forms might contribute.
Companies should also encourage open-door policies.
Training can be helpful. A training program that identifies the psychopathic pattern can
help employees recognize it. The content of the program would include a discussion of
the traits and characteristics of psychopaths; how they manipulate employees and
organizational control systems; why psychopathic behavior is often confused with good
or creative leadership, as in the case of Jeffrey Skilling; the pattern of pawns, patrons and
patsies; and how the firm can protect itself.
As well, matrix organization structures that encourage interaction across departments will
limit the ability of psychopaths to tell one story to one person and another story to
another. The more interactive the organization structure and the more porous departments
are, the more difficult it will be for psychopaths to manipulate, lie and deceive.
Unfortunately, there are no magic bullets. ℵ
4
© 2010 Cornell HR Review
1.
(2009). “Global Economic Crime Survey.” PricewaterhouseCoopers. Retrieved June 11, 2010,
from http://www.pwc.com/gx/en/economic-crime-survey/key-findings/economic-downturn-fraud-
risk.jhtml#.
2.
Cressey, D. (1973). Other People’s Money. Glen Ridge, NJ: Patterson Smith.
3.
Trice, H. & Roman, P. (1979). Sprits and Demons at Work: Alchohol and Other Drugs at Work.
Ithaca, NY: ILR Press.
4.
Hare, R. (1993). Without Conscience: The Disturbing World of the Psychopaths Among Us. New
York, NY: Guilford Press.
5.
Babiak, P., Neumann, C. & Hare, R. (2010). “Corporate Psychopathy: Talking the Walk.”
Behavioral Sciences and Law, 28: 174-193.
6.
Ibid.
7.
McLean, B. & Elkind, P. (2004). The Smartest Guys in the Room. New York, NY: Penguin Books.
8.
Eichenwald, K. (2005). Conspiracy of Fools. New York, NY: Broadway Books.
9.
Hare, R. (1999). Without Conscience: The Disturbing World of the Psychopath Among Us. New
York, NY: Guilford Publications.
10.
Babiak, P. & Hare, R. (2006). Snakes in Suits: When Psychopaths Go to Work. New York, NY:
HarperCollins.
11.
Ibid.