Workplace Conduct · Performance Management

Performance Managing the NarcissistA Manager’s Guide

The hardest employee files are rarely about capability. They are about conduct everyone can see, that no one has written down, and that punishes the manager who finally decides to act.

Sam Kemble · 31 August 2026 · first published August 2022

Framing

What is a narcissist?

Roughly one per cent of the population meets the clinical threshold for Narcissistic Personality Disorder as recognised in the DSM-5 — although honest estimates vary a great deal, with community samples running from near zero to just over six per cent depending on the instrument used. Where the disorder is genuinely present, it is a medical matter. Those living with it need support and accommodation under the guidance of medical professionals, and performance management — including any progressive discipline stream — is rarely the appropriate tool.

To be clear: the clinical disorder is not the subject of this article.

The subject is conduct. A pattern of behaviour in an otherwise capable employee that is corrosive to everyone working around them. Entitlement. Contempt for peers. A disproportionate reaction to any correction. A striking talent for looking excellent to anyone senior while the team quietly comes apart underneath.

In the first version of this article I put a number on how much of the general population carries narcissistic traits. I have taken it out, because I could not stand behind it, and because the number was never the point.

Here is the more useful truth. Narcissistic traits are continuously distributed. There is no line on the scale with narcissists on one side and everybody else on the other — every person you have ever managed sits somewhere on it. Be suspicious of anyone who offers you a percentage. The question was never how many. The question is what you do when the person at the far end of that scale reports to you.

Risk

Evolving Safety and Employer Liability Concerns

None of this comes from a place of judgment. But we do not get to look away when someone acts on these impulses in ways that damage the people around them.

This behaviour creates genuine workplace harm — psychological and emotional injury to co-workers, potentially compensable through Workers' Compensation legislation. It produces the ordinary, expensive symptoms long before it produces anything formal: turnover concentrated in one team and not others, sick time, grievances, disengagement, and the quiet resignation of the two or three people you could least afford to lose.

And it produces one more cost that managers consistently underestimate. A team that watches this conduct go uncorrected learns something specific about what the organization will tolerate, and they do not un-learn it. Inaction is not neutral.

Evidence

Where Narcissistic Traits Come From

The popular story is that narcissism is exploding and social media is the reason. It is a good story, and the evidence for it is weaker than the story.

The most careful cohort research — comparing university students from the 1990s through the 2010s, while correcting for measurement problems that earlier studies missed — found narcissism trending down, not up, including on the entitlement dimension people complain about most. I mention this only to set it aside. Nothing in this article requires narcissism to be increasing. It requires it to be present and expensive, and it is both. If you have one of these situations on your hands, you have one hundred per cent of a problem regardless of the trend line.

What the research does support is more interesting, and more useful.

Traits of this kind take shape early — generally established by adolescence — and the mechanism is not what most people assume. In the best longitudinal work available, children who were told they were more special than other children trended toward narcissism. Children who were treated with warmth trended toward self-esteem. Different inputs, different outputs.

That distinction is worth carrying into the workplace, because managers routinely get it backwards. Praise and inflation are not the same thing. Warmth is not the same as telling someone they are exceptional. And it is worth remembering the next time you are tempted to manage one of these situations by finding something — anything — to compliment.

Mechanism

Understanding the Narcissist

People with these traits think highly of themselves and need others to do the same. They want to feel superior and to exert influence over others, and they can be highly manipulative in pursuit of it. Confronted with obstacles, they become angry and resentful, and they look for a way to retaliate.

The important mechanism is this: their self-regard is positive but insecure, which makes them unusually attentive and reactive to feedback. Not all feedback — they are specifically hungry to learn that others admire and look up to them. Being admired matters more to them than being liked. They actively manage the impressions others form of them, making self-promoting statements and fishing for regard. And when they feel threatened, they respond with anger and go after the person who threatened them, even when doing so wrecks a relationship they need.

Detection

The Narcissist at Work

Now let us set the stage for the narcissist at work.

The presentation is typically self-centred, short on empathy, with disproportionate — aggressive or passive-aggressive — reactions to criticism. They expect things to go their way and may act out, or retaliate, when colleagues fail to reinforce their sense of special status. And they will not hesitate to depart from the truth, past or present, to defend their self-worth.

Two forms are worth separating, because managers reliably handle one better than the other.

The grandiose presentation is the one everybody pictures: confident, dominant, self-promoting, quick to claim credit. It is also over-represented in management ranks, and the reason is not mysterious — in an interview, and across the first ninety days, it is hard to tell apart from executive presence.

The vulnerable presentation is quieter, and it is the one managers miss. The same entitlement and the same fragility, expressed as grievance rather than swagger: defensive, injured, certain of being overlooked, acutely sensitive to slight. It does not look like arrogance. It looks like distress.

Across both forms, the first tell is asymmetry. People with these traits like to be associated with higher-status people, and they treat those above them on the org chart very differently from how they treat peers and subordinates. That inconsistency is why even seasoned managers miss it — at least for a while. More on that below, because it is the single most common way these situations go undetected for years.

The literature

Summaries from Experts

As industrial relations and human resources practitioners, we are not psychologists. We rely on the research of others rather than personal expertise. Indulge a brief pause to hear from people who study this properly.

One caveat about what follows. These writers are describing the clinical end of the scale, and they use the noun — the narcissist — because a diagnosis is what they are writing about. I am not, and neither are you. Take the descriptions and leave the category.

Manfred Kets de Vries describes the entitlement plainly: when narcissistic individuals do not receive the special treatment they believe they are owed, they become impatient or angry. Their self-serving frame makes it hard to recognise or identify with what others need. Empathy does not come naturally. And being thin-skinned, they handle criticism badly — feeling hurt quickly, overreacting, becoming defensive.

Theodore Millon captured the reconstruction of history that follows. The narcissist transforms failures into successes and builds elaborate rationalisations to inflate their self-worth. Millon and Roger Davis put it more sharply still: narcissists remember the past, in their words, "as they would have wanted it to occur, not as it actually happened."

Keep that last one close. It explains why the account you are given in a performance meeting so often bears no resemblance to the events six people witnessed — and why arguing about the facts of the incident is usually a dead end.

Millon is also why the distinction holds. His own framework puts normality and pathology on a single continuum — "one slowly fades into the other" — with diagnostic thresholds that are "not discrete discontinuities, but instead are largely social conventions." Each disorder in his scheme has a parallel style well inside the normal range. The less severe presentations may show no psychiatric comorbidity at all and may never meet the functional impairment threshold, except during a crisis or an unexpected failure — losing a job, going through a divorce. These people are often outwardly successful and hold their ego stability together. The entitlement and self-centredness are still there, and still produce exploitative, unempathetic behaviour toward the people around them.

That describes a great many people who will never see a clinician, and who are sitting in workplaces right now.

Practice — Containment

Containing the Narcissist

If you have an employee behaving this way, remember it is a complex problem and a multi-pronged response will be necessary. Before coaching tactics, spend a moment on containment — which is really harm reduction. Keep firmly in mind that it is your other employees who will absorb the damage.

There is power in numbers.

A strong team environment can neutralise the behaviour and create a forum for peer feedback, supported by leadership. Feedback arriving from a group is often better received than the same message from one individual, because the need for affirmation drives engagement with the group's norms. Structure the work so there are witnesses; this conduct thrives in isolation and in one-to-one dynamics where there are none.

Do not hand over a platform.

Avoid placing someone with these traits on a team they can dominate, or in a role — chair, lead, gatekeeper — where they control a group. It does not satisfy the need. It funds it. This is the most common well-intentioned error I see: a manager tries to channel the ambition into a leadership role and instead installs the problem one level up, where it is considerably harder to remove.

Refuse the special arrangement.

There is always a request for an exception and always a reason the exception is justified. Granting it does two things at once — it confirms the entitlement, and it tells everyone else that the rules are negotiable for some people and not for them. The resentment that follows is aimed at you, and fairly.

Your job is to manage the individual while maintaining the physical and psychological safety of everyone else. A manager's biggest worry should not be losing this employee. It should be that the other team members resign, worn out by the catering that has become normal. Until the behaviour is consistently self-regulated, this is a balancing act: manage the individual, protect the team, and keep the rest of your people patient enough to stay.

Escalation

When things go awry…

Micro-blunders are a normal feature of organizational life. Even the tamest environments involve:

• inadvertent slights between co-workers;
• unequal or inequitable distribution of credit for work well done; and
• real or perceived blame when outcomes differ from expectations.

Offices are not sterile lab environments. They are human, and therefore messy — some considerably more than others. Slights, real and perceived, are not a question of if but when.

Those who lack the mindfulness and coping skills to regulate their reactions will start running into trouble at exactly these moments, even in a reasonably healthy workplace. Reactions become disproportionate. Colleagues start to notice.

Kristin Neff explains why the ordinary slight lands so hard. A threat to the mental representation of who they are, she writes, "feels like an actual, visceral threat" — and the response is correspondingly total, on the scale of someone defending their life rather than their argument (Self-Compassion, p. 151). Retaliation can be fast and furious. Narcissistic anger serves a function — it deflects negative attention away from the self and onto others, who can then carry the blame for everything being felt.

James J. McDonald Jr., writing as a lawyer, drew the practical conclusion: when the narcissist ultimately fails, the fall is long and hard, and litigation is a likely result. Which is precisely why the performance problems, the disruptive conduct and the treatment of others must be thoroughly documented as they occur.

Organizations and managers need thoughtful, deliberate practices for these situations. What follows is mine.

Practice — The File

Performance Managing

Managers: Prevent the Narcissist from Hiding Out on Your Blind Side

How this employee treats their superiors will differ remarkably from how they treat peers and subordinates. Guard against the possibility that one of your direct reports is operating out of your line of sight.

Suppose an employee always seems to have the right answers for you, but consistently generates relationship trouble with co-workers and the people who report to them. Reserve judgment and do some investigating.

People with these traits are skilled people-pleasers toward those in elevated positions. They will be good at sending you comforting signals about their own performance. There are reasons organizations promote them before their character becomes apparent. "Trust but verify" is an overused phrase that happens to fit. It is worth real effort to understand the perspectives of the colleagues and subordinates having a hard time with your employee.

Put it as a rule: if your assessment of an employee is dramatically better than the assessment held by everyone who works beside them, that gap is itself the finding. Go and understand why. The last thing you want is to enable someone whose conduct you never see, operating under your authority, leaving a path of destruction behind them.

Be wary of requests for special treatment. It is a common signal, and conceding will reinforce the behaviour while generating resentment across the team.

If performance intervention is required, take a structured approach and be clear about which stream you are on. Stick to a linear discipline path — step one, step two, step three — unless new facts genuinely justify a change of course. A transparent and frankly boring performance management approach will serve you well later. Take notes. Keep a personal file. These matters do not lend themselves to culminating-incident justifications, largely because of the subjectivity that attaches to interpersonal strife. If it goes sideways, it is likely to get litigious.

Three things carry most of the weight: do not reinforce the behaviour by giving in to demands for special treatment; maintain a principled, rules-based approach; and keep your performance management messaging straightforward.

Failure to do this leaves you exposed. Once you become a threat, they will retaliate — and they will exploit whatever weaknesses you revealed to them while handling the file.

Practice — What to Say

Having the Discussion

State the issue, knowing it will likely be taken very personally

Have an HR staff member witness the exchange.

Be direct. Take extra care to separate the behaviour from the person as you explain the concern. Something like:

The most common failure I see at this stage is a manager who softens the message so thoroughly that the employee leaves the room sincerely believing they were praised. With someone who has an unusual capacity to hear criticism as something else, ambiguity is not kindness. Say it plainly, once, and confirm it in writing.

Describe what you will MONITOR, and book a follow-up meeting

Then hold the review on the day you said you would hold it.

Continue to check in, and offer positive feedback wherever you see authentic effort to change. Remember that these patterns are usually set by adolescence; adjusting a communication style built over decades takes sustained effort. Where the behaviour does not change and is causing safety concerns or psychological harm to colleagues, escalate dispassionately using sound progressive discipline practice. Keep good records. Have witnesses available for the critical conversations.

And do not run the file alone. Make sure your own leadership knows it exists well before it becomes urgent. Managers who handle these matters privately are the ones left isolated when the counter-allegation arrives.

Escalation

When the Counter-Attack Comes

Expect retaliation, and plan for it rather than reacting to it.

When someone whose self-image depends on being seen as exceptional is formally told they are falling short — and grasps that the informal management of impressions has stopped working — escalation is a more likely response than compliance. In a labour relations setting it takes recognisable forms:

• a grievance;
• a harassment or bullying complaint naming the manager;
• a human rights allegation;
• a stress-related claim;
• an approach to someone senior, over your head;
• a threat of defamation; or
• a sudden accommodation request, timed precisely to the discipline.

Note what is usually absent from the response: any version of "I did not do that." The attack lands on the file and on you — the complaint is malicious, the manager has a vendetta, others do worse and nothing happens to them, nobody ever raised this before. Which is exactly why nobody ever raised this before must not be true.

None of these responses is proof of anything, and none should be treated as proof of bad faith. Each must be investigated properly, on its own merits, by someone who is not the manager being named. That is the entire point of building the file the way described above: a complete, contemporaneous, conduct-based record is what allows a sound process to survive a complaint made in response to it.

What you should not do is let the counter-allegation halt the performance management. Investigate it genuinely, and continue with the part of the process the investigation does not undermine. Suspending everything the moment a complaint is filed teaches a very fast lesson about how to make discipline disappear.

Companion piece

A Note on Lateral Violence

There is one situation that looks almost identical to this from the outside and requires an entirely different response.

Gossip, exclusion, shaming, backstabbing, undermining a colleague — these are the surface behaviours of narcissistic conduct, and they are also the surface behaviours of lateral violence: aggression turned inward within a group that is itself under pressure or subject to systemic oppression, rather than directed at the source of that pressure.

Same behaviours. Different engine. Different remedy entirely. And if you run the performance management playbook in this article against a lateral violence problem, you will discipline a symptom, miss the cause, and quite possibly make it worse.

Managers need to be able to tell them apart. I have written about lateral violence separately, because it deserves more than a section.

Conclusion

Do the boring version, early

Most of this reduces to a single discipline: describe conduct, apply the standard evenly, write it down as it happens, and do not flinch from the conversation.

That is not a specialised technique. It is ordinary good management, applied to a situation that punishes managers who are vague, inconsistent, or conflict-averse. What makes these files hard is not that they demand something exotic — it is that they expose, quickly and expensively, whatever the manager was already avoiding.

Promoting and allowing space for healthy discussion in your workplace, and ensuring the safety of all your employees — psychological safety included — lets managers and organizations meet this issue with maturity and compassion. The alternative is well understood: the conduct continues, the good people leave, the team draws its own conclusions about what the organization tolerates, and the eventual termination lands on the worst possible record. Years late, thinly documented, and straight into a complaint that the whole thing was personal all along.

Do the boring version, early.

And keep some humility about all of this. It is almost the case that if you can't spot the narcissist in the room, you're probably it.