Today's workplace is full of horror stories about employees who work for toxic bosses, but what happens when a manager is in charge of a toxic employee? While termination seems like the simple solution, it's not always that easy. Learn what makes a toxic employee tick and how to take control of the situation.

What Toxic Workers Do and Why

In his 25 years as a senior administrative law judge for the state of California, Jim Tamm dealt exclusively with employment disputes. Now a senior consultant with Business Consultants Network and author of Radical Collaboration: Five Essential Skills to Overcome Defensiveness and Build Successful Relationships, Tamm says the bully is fearful about his own significance, competence, likeability or helplessness.

"They don't want to feel that way, so they behave in ways to let them avoid those feelings," says Tamm. "For example, a way of avoiding your own feelings of incompetence or insignificance is to become very critical of others, flood others with information to prove you are right, or jump to conclusions and personalize everything, hold a grudge, get hostile, think obsessively or any number of other inappropriate behaviors."

Bullies put out aggressive signals, often scaring the meeker party into submission, says Judith Glaser, CEO of Benchmark Communications and author of Creating We and The DNA of Leadership.

"If we want to mitigate against the bully, we need to teach leaders how to read the early signs of aggression and to counter them with a conscious request for 'respect,' thereby turning the bully into an equal partner," Glaser says.

Other workers are often afraid to tattle on the bully. A manager must remain in control and demonstrate leadership. If not, "the bully's boundaries and ego expand, and they impact more people than just the initial targets," says Glaser. "Speaking up is vital and sends a signal to the rest of the organization that they don't need to tolerate, accept or support bullying."

Tame Your Toxic Worker

Those who manage toxic but highly competent employees are in a tough spot, says Dr. Janet Scarborough, psychologist and career coach with Bridgeway Career Development. Managers need their employees to succeed in order to keep themselves looking good.

"The manager needs to find a way to motivate the bully to be different," says Scarborough. "There are two possibilities for how to do this -- either offer a reward of something valued by the bullying employee or create a negative consequence for the bully if he/she continues to be abusive. The manager just has to find out what would motivate the bully to change his or her ways, and since everyone is motivated by something, there is always a way."

To put the toxic employee in line, start with a tough talk. "Sit the employee down, and be crystal clear about the behaviors that must stop immediately and those that must start," says Sharon Jordan-Evans, president of the Jordan Evans Group and coauthor of Love 'Em or Lose 'Em: Getting Good People to Stay and Love It, Don't Leave It: 26 Ways to Get What You Want at Work. "Statements such as ‘you must stop spreading negative gossip about your coworkers' or ‘you must start helping your colleagues more in tight deadline situations' should be brought to their attention."

Jordan-Evans says you can ensure the employee is clear about expected behavior changes by asking him to paraphrase or repeat those changes. Provide a timeline within which you expect to see lasting change as well as consequences for noncompliance. She recommends saying: "We'll meet again in one month to discuss how you're doing on these changes. I'll expect by then that you're 90 percent on target. Six months from now, I'll expect 100 percent success regarding these changes. Your performance review will reflect this process, and your pay will be impacted accordingly."

This means no pay increase or bonus for failure to change, while success translates into a pay increase and/or bonus, Jordan-Evans adds.

Overall, the manager has an important role in taming a toxic worker. "The toxic person is making others' lives miserable," says Glaser, "The manager needs to take the high road -- bring the team together and reestablish a common goal the team can shoot for -- then to help each person see the role they can play in achieving it."