At one time or another, every employee has experienced what it’s like to be in a difficult workplace. Perhaps a manager makes a habit of reprimanding workers in front of others, or a supervisor insists that everyone do things a particular way. A sick employee might be told to report to work anyway. These and other tyrannical behaviors can quickly add up to a toxic environment.

Research shows that as tools for motivating workers, fear and intimidation come with a lot of risk; they’ve been largely discredited for some time. A tyrannical management style can lead to low self-esteem and performance as it eats away at team cohesiveness, increases stress and helplessness, and creates a feeling of work alienation, according to “Petty Tyranny in Organizations,” a paper written nearly a quarter century ago by psychologist Blake Ashforth, who’s now an Arizona State University professor.

And yet the use of fear as a motivator persists. Open office plans, transparent and flattened organizational hierarchies, and a tightened job market aside, fear continues to exert its influence in many workplaces. “All emotions have some type of function value. So fear does have a value,” says Wharton management professor Sigal Barsade. “The value, though, usually is to signal that something has gone wrong, something needs to be fixed, and it gives energy. And though those are positive outcomes, the problem with fear is it can also cause people to become rigid, less creative, unhappy, and it tends to be better in small doses.”

If the message the workplace culture is constantly sending to employees is to be afraid, that company may not be getting the most out of its workers. “Fear is a normal human emotion and—when held in check—can sometimes be a functional or even necessary way to ensure that people don’t become complacent,” says Wharton management professor Andrew Carton. “But when fear becomes an entrenched marker of an organization’s culture, it can have toxic effects over the long run. In addition to stifling creativity, it can inhibit collaboration and lead to burnout.”

The Netflix Way

Burnout, though, may be of little concern to some employers, especially in certain high-growth industries. Netflix, which has been praised for its progressive company culture, offers perks such as a high level of employee autonomy, makes sure business decisions are transparent to all employees, gives maternity and paternity leaves of up to a year, provides unlimited vacation, and generally adheres to a philosophy the company calls “freedom and responsibility.”

In a Knowledge@Wharton interview last year, Patty McCord, former chief talent officer at Netflix, touted the company’s unique culture that focuses on high performers. “We realized that when we had the right people, the right focus, and the right deadlines, people operated pretty independently,” she said. According to McCord, Netflix wanted to avoid “generic” company rules and processes that characterize many workplaces; these devolve into best practices, “which is what happens when we copy each other.” One example: Netflix differentiates between values and behaviors: The former are aspirational, while the latter are what one actually does. “It’s an important distinction,” she said.

The pressure to perform, though, is high, and Netflix has a culture that is quick to fire employees. So while these policies might make Netflix seem “very utopian in your head … in real life, it’s messier,” Shalini Ramachandran, a Wall Street Journal reporter who wrote an article on Netflix’s corporate culture, said recently on the Knowledge@Wharton radio show on SiriusXM channel 132.

One way Netflix creates a culture of fear is by making a public exercise out of firing employees. When a worker is let go, the company holds a meeting with team members detailing why. An email is sent out to potentially hundreds of other employees explaining what the employee did wrong. But the story that gets told is very much from Netflix’s point of view, said Ramachandran.

One instance cited in the Journal article involved a vice president who was fired by the CFO and an ensuing memo stating that he hadn’t been forthright with the company on a major employee issue. “That sounds pretty bad,” said Ramachandran. But it turned out the vice president was protecting an employee with a sensitive medical condition: “So that’s a little more nuanced. There’s one official narrative that might go to hundreds of people, but you might not be there to defend yourself.”

At its best, this practice can make every firing a learning experience for others at Netflix. “At its worst, it sows gossip and more rumors,” Ramachandran said. Netflix also employs a kind of keeper test: Managers continually go through the mental exercise of asking themselves whether they would want to keep workers if another company made them an offer. “If it comes to ‘I wouldn’t keep you,’ then you’re fired,” she said.

Is this culture likely to spread to other companies? “The Netflix culture is something a lot of people have admired,” said Ramachandran. “While it can be at its worst ruthless and demoralizing, at its best it can allow the company to transform itself multiple times and overturn entire industries”—as Netflix has done with DVDs, movies, and TV.

“A lot of current and former employees attribute [the nimbleness of Netflix] to its culture, because of … distributive decision-making power … and how fast you can move,” Ramachandran said. “One tech employee was telling me, ‘I can come up with an idea at 9 a.m. and get out the code for it by noon without approval.’ So this kind of moving fast is something this culture encourages.”

The Netflix culture also motivates high performance. “When you are looking over your shoulder wondering, ‘Well, am I a keeper or not?,’ you always strive to be your best. Now, of course, it can also wear you down, and that’s another part of it,” Ramachandran added. “A refrain that was commonly repeated to me was, ‘It was the best place I ever worked, and the worst.’”

Emotions as Noise?

In some circles, the conventional wisdom is that fear can be enormously helpful for spurring change. But fear and other negative emotions can backfire under certain circumstances, especially when creativity is necessary. “Fear leads people to panic and narrow their attention to such an extreme degree that they may overlook opportunities that unexpectedly present themselves,” says Carton. “Employees may become so consumed by the specter of a specific negative outcome that they suffer a form of cognitive paralysis and lose the imagination necessary to conjure novel paths to success.”

Perhaps most problematically, fear can inhibit learning, “which is essential for evading the very catastrophes that some people believe a culture of fear can help avoid,” Carton adds. He points to a study by Harvard professor Amy C. Edmondson that found hospital employees who operated under a culture of fear reported fewer errors than those experiencing “psychological safety.” But in the study—“Learning from Mistakes Is Easier Said Than Done: Group and Organizational Influences on the Detection and Correction of Human Error”—Edmondson found this was a result of employees being afraid to report errors.

“In reality, they actually committed more errors,” says Carton, “in part because they didn’t learn from their colleagues’ past mistakes. It was likely they were never even made aware of those mistakes, as their colleagues were worried about the consequences that would ensue if their mistakes were discovered. Thus, fear may appear at first to be a mechanism that helps people stay alert to the unacceptability of failure, but it can, ironically, be a source of failure instead.”

Many companies, though, don’t see it as their job to actively manage emotional culture in the workplace. Why not? “It’s because people just tend to view emotions in general as noise, an ancillary matter that gets in the way of the facts of the situation,” says Barsade. “What many managers and leaders don’t understand is that emotions aren’t noise; they’re data—and they’re data about not only how employees feel but also how they think and will behave.”

Hope vs. Fear

While some people are motivated by fear, others are paralyzed by it. “The problem is, negative emotion often breeds other negative emotions,” says Wharton management professor Stephanie Creary. “Fear can manifest into anxiety, depression, and hopelessness, and an environment in which these negative emotions are prevalent can become a very hard one in which to work and be productive. Hope, on the other hand, can breed happiness, confidence, and all sorts of positive emotions that are much more tied to positive performance and well-being.”

A single worker in a workplace where fear is the reigning emotion can try to build personal support for dealing with it. But, says Barsade, “If you can’t find support that creates a mini-emotional culture of compassionate love around you—consisting of affection, caring, compassion, and tenderness—trying to weather that culture of fear is difficult.”

Workers might also take comfort in realizing that there’s safety in numbers. Going to management as a group to confront a climate of fear is more effective than going one-on-one. “If I’m in a company where it feels like all we’re doing is being coached in what we shouldn’t do, I would prefer to hear what it is we should be doing,” says Creary. “One person might approach the manager and say, ‘I’d love to hear more about what we can do than not do,’ but that might not be as effective as a collective conversation. A better approach could be to hold a group conversation with a manager to explain that fear is creating toxicity and threatening productivity and effectiveness, and then suggest ideas for how to improve the culture and what the positive consequences of doing so might be.”

The salient questions for organizations that deploy fear are whether they’re using it intentionally, what it’s ultimately achieving, and at what cost. “At Netflix, as in any company’s case, to have a culture work for them, the culture has to be in alignment with the strategy and structure, and in Netflix’s case, it seems they have aligned it with their strategy and have created a structure to support it,” says Barsade. “The question is, are they actually retaining the best talent?” she continues. “Motivation is a long game, and are they really gaining the best motivation and outcomes? With regard to the people they’re losing in their ‘keeper’ test—are they only losing the people they don’t want to keep? People who don’t line up with the culture might also be leaving. And perhaps an employee might not be a keeper in six months, but maybe in a year, they are.”

Sometimes, though, it might just be time for the employee to turn the tables on the employer. You can fight the larger culture for only so long before you’re forced to do what Netflix itself does, says Barsade: “Do a keeper test of the organization and decide whether to go or stay.”


Published as “Does Fear Motivate Workers?” in the Spring/Summer 2019 issue of Wharton Magazine.