Why do employees work for your organization? Why are they satisfied and productive, or unhappy, with one foot out the door?
Your pay and benefits? The free snacks and company outings?
In many cases, it’s something you can’t see, a factor that might not directly show up on any metrics, but one that’s vitally important: your culture.
Your organization’s culture greatly affects every aspect of your operations: productivity, retention, the bottom line, everything.
How Culture Affects Organizations
How employees feel about where they work directly affects their productivity. If an organization doesn’t have a healthy company culture where employees can do their best work, they won’t feel productive or put in discretionary effort—that extra effort people put in when they’re feeling good about where they work.
It’s not that employees don’t want to do their job or to do a good job, but in a toxic or difficult-to-navigate culture, they’re often not able to do the things they need to do to perform well.
Warning Signs of Cultural Issues
High turnover and absenteeism rates are clear signs of culture issues. People know when people are leaving or absent from work. But not all signs of poor culture are so apparent. One of the least obvious is the organization’s core values.
Core values need to be in line with the organization’s strategy.
- In a highly regulated industry, for example, a core value could be, “We need to do it right the first time because there’s a lot of risk if we don’t.” As a result, the company might take longer to complete the job, but they get it right the first time. So that’s part of the value and culture.
- A less-regulated company in a highly competitive environment might have a culture that tolerates—or even encourages—failure. Employees may be empowered to act, with the understanding that, even if they make a mistake, the company will learn from the experience, fix it, and move on.
If a company doesn’t have core values, that’s a sure indicator that the culture won’t be healthy. People won’t know how to operate or behave.
Another downfall occurs when the organization isn’t living up to those core values. This is particularly true when behavioral performance metrics are either not in place or do not align with core values. Behaviors that are not measured do not change.
Employees who don’t treat each other with respect raise another red flag. Calling people out in a meeting rather than having a private conversation afterwards. Not giving people the freedom to make mistakes and learn from them. Such behavior should also factor into performance appraisals and promotions. A manager may say, “I’m being tough because I have high expectations,” but employees may perceive that manager as unprofessional, disrespectful, and bullying.
Best Practices in Establishing and Maintaining a Healthy Company Culture
A strong, healthy company culture starts from the top and shapes the values of everything the organization does.
Employees recognize the empty words of “we’re like a family here” when people are treated badly or aren’t recognized. Conversely, they see, feel, and are motivated by a strong corporate culture that encourages people to go beyond, do their best work, and not fear making mistakes.
Best practices to assess and improve corporate culture include the following:
- Anonymous surveys and other activities, such as focus groups conducted by a third party, to evaluate the current corporate culture
- Action plans to help executives and HR professionals address any issues uncovered
- Ongoing monitoring to better understand employee morale and engagement
- Periodic evaluations to measure changes in attitude and culture
The final best practice is one that many organizations find challenging to implement: recognition.
Recognition should extend beyond the annual awards banquet where the top performers or strongest salespeople get awards. It’s also important to recognize other people in the company who are doing important work. If you only recognize half the employees, then you’re not recognizing or engaging the other 50%. You can recognize people for achieving a specific milestone or for collaborating well with others if that’s one of your values. It can be as formal as recognition and a small gift card at the quarterly all-hands meeting, or as casual as a shoutout by an executive on a Slack channel.
The Lindenberger Group can help organizations analyze their current corporate culture and build an action plan to improve it. For more information or to discuss your HR needs, please contact us at 609-730-1049 or send us an email.
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