Doing nothing about poor behaviour from top performers is a workplace culture risk, warns employment lawyer Melini Pillay
Employers that tolerate poor behaviour from their high performers are paying for it in staff turnover, workers' compensation claims and reputational damage and many are choosing to do nothing about it.
Melini Pillay, principal at McCabes Lawyers, said the problem usually starts with a familiar line of thinking in leadership teams: the person is too valuable to lose. Clients love them, the growth plan depends on them and their output can exceed that of two colleagues combined.
The trouble, Pillay said, sits on the other side of the ledger. Junior staff turnover and discontent are often traced back to the same individual, through a lack of mentorship and leadership, and a habit of talking down to junior employees, sometimes without realising it and with no interest in changing.
The fallout can surface as workers' compensation claims or personal leave, while management watches good people leave without knowing how to respond.
The hidden cost of protecting high performers
Pillay said the damage does not stay inside the business.
"There's another silent cost to this behaviour – which is when these people join other businesses, they share the story of what it was to work at XYZ Pty Ltd, creating an undercurrent of unforeseen reputational damage," she said.
"These are also usually the businesses complaining about resourcing issues 'we pay well and yet we can't find people'. They often blame the generation shift in work attitudes or otherwise the war on talent."
Yet the most common response, Pillay said, is inaction.
"What do they do to fix the issue? Surprisingly, nothing. Nothing at all. Paralysed by the idea the 'problem person' will resign or otherwise behave worse they have resigned themselves to the idea they'll never change and what they need, is to find a workaround."
That inaction carries legal as well as cultural risk. Under work health and safety (WHS) laws, a person conducting a business or undertaking (PCBU) must eliminate or minimise psychosocial risks so far as is reasonably practicable, according to Safe Work Australia's model Code of Practice on managing psychosocial hazards.
Psychological injury claims are also climbing. Mental health claims have risen 161 per cent over the past decade, the largest increase across all major injury and disease groups, according to the Australian Institute of Health and Safety (AIHS), as covered in HRD's report on why mental health claims are now Australia's fastest-growing compensation category.
The AIHS names harassment and bullying among the most prevalent psychosocial hazards, and employers in Victoria now face explicit duties under Victoria's Occupational Health and Safety (Psychological Health) Regulations 2025.
Pillay argues that measuring success by output alone is a risk in its own right.
"We need to help businesses and individuals shift their mentality into understanding that there is risk in continuing to measure success by one single outcome of what you deliver from a cost perspective. For leaders or senior staff, it must shift into a combination of contributions to the business, including your capability, the business reputation, people engagement, talent retention and the overall workplace culture."
"Practically what does this look like, a frank conversation and a reality that no one can afford to be their own entity within a business anymore."
Why one-size-fits-all fixes backfire
Pillay said many businesses make the problem worse by trying to avoid singling anyone out. Rather than address one person's conduct, they roll out a new process for the whole team in the name of fairness.
"The result being, that the problematic individual stays with their issues and has something to hide behind and the people who are thriving become disenfranchised and disengaged and leave."
There is no shortcut around confrontation. "Unfortunately, it leaves HR and those they support in management with the stark reality of having to lean into difficult conversations," she said.
For HR leaders worried that tackling a senior performer's conduct will trigger a complaint, reasonable management action carried out in a reasonable manner is excluded from the definition of bullying under the Fair Work Act 2009 (Cth), a distinction explored in HRD's guide to how workplace bullying complaints are handled at the Fair Work Commission.
What does good HR look like?
Pillay said the signs of poor HR are easy to recognise: high turnover, reactive strategies, quick-fix morale boosts, inconsistent decision-making, poor communication, employee distrust, delayed pay reviews and the continued employment of known poor performers.
Good HR is harder to spot. "Good HR is often invisible and unseen," she said, adding that the practitioners most deserving of recognition – those quietly opening conversations and helping leaders earn the workforce's trust – rarely seek the spotlight.
"The hallmarks of good HR – poor performance is addressed directly and early, the workforce understand decisions even if they don't agree with them, investigations are quick, fair and clear, recruitment is thoughtful and engages more than just a leader, HRs input is valued more than by just those at the top end of a business, there are less public issues, people know where they stand; expectations are clear, culture is felt, people are valued."
For employers weighing whether to act on a high performer's behaviour, Pillay's point is that the cost of doing nothing – complaints, workers' compensation, disengaged teams and turnover without clear reasons – is already being paid.
