Being a part of an organization can be incredibly rewarding or incredibly draining. How employees see your company and its organizational culture will determine how well you’re able to bring qualified talent, while keeping them engaged and productive. No pressure, right?
And trust me..I would know a thing or two about this type of pressure! Throughout my years as the Chief People Officer at Gympass, my team and I have gone through incredibly tough times in which we either survived because of our culture or sank lower because people lost contact with it. At some point, we even had someone in our team randomly create a new set of values for the company – and others didn’t even find them strange, which shows how far we were from our roots, from our deliberately and carefully structured culture. I’m happy to say we now have a solid set of values that sets the right tone and mentality for us to thrive in any context.
Nowadays, people care more about the environment and their personal experiences with a company. It’s predicted that by 2025, millennials will make up 75% of the global workforce and the following generations like Gen Z are even more serious about work-life integration, company values, growth opportunities and additional work culture factors. And that’s why employers, more than ever before, need to be transparent with all stakeholders and truly focus on the overall culture experience their company provides to their dedicated teams.
Sounds stressful? Don’t worry; there’s no need to be discouraged.
Cultivating a positive culture is more simple than you might think. Company leaders and HR can be part of the solution by creating an appealing organizational culture that is first and foremost true to the beliefs of its leaders and what they wish for those around them, and what team members want to belong to. This will allow for a more natural and sustainable development of a culture that is good for your company and your teams. And that’s not even the best part: organizations are finding that satisfied employees perform better than ever, pulling in more success and revenue for the company—but more on that later.
We’re here to show you not only the benefits of a good organizational culture but the best way to go about building that culture.
Culture can mean a lot of different things for different groups or companies, so let’s get the organizational culture definition out of the way. Organizational culture is essentially how members of a company, business, or other groups act based on agreed-upon values, expectations, rewards and practices. For instance, our company believes that everyone is a leader – whether you’re an intern or a C-suite executive – all team members are expected to make impactful decisions on a daily basis given their scopes and responsibilities, as well as take ownership of their careers and how they show up to work everyday.
Culture is more than just written policies or “goals” that management brings up during meetings. Of course, great organizational culture may start with values, goals or a solid mission statement; but, the actual culture is more defined by the actions and behaviors of everyone within the company, especially in leadership positions – who have more visibility and should be role models of the behaviors that are expected from all. No empty assurances or glib guarantees—your real organizational culture is revealed in how people walk the walk (or if people only talk the talk.)
Do the leaders of a workplace hold themselves to the same standards as the employees? How does a team respond to a difficult situation? What happens when things are going well versus when a crisis arises? Do employees have the support to share their honest feedback and is open communication encouraged at all levels of the company? Is the company transparent on how it hires, promotes and even lays off employees? All of these scenarios reflect the authentic work culture, not the ideal one on paper.
You may not realize it, but your current workplace already has a type of organizational culture; the question is whether or not it’s a healthy one, and if it’s what you want for yourself. A strong work culture leads to high achievement and satisfaction throughout your organization. On the other hand, a poorly developed culture will yield unwanted results such as unhappy or flighty employees.
Why Is an Organization’s Culture Important?
We’ve touched on some of the basic benefits of being intentional about your work culture, like attracting a workforce that aligns with the company’s values. But what does that really do for your business?
Aside from gaining personal satisfaction, supporting others and enjoying the ethical high ground, organizational culture is also a business strategy. Your culture will influence everything you do, like client/customer work, how people collaborate, how money and other resources are used and more. Let’s take a closer look at the details.
Attract Top Talent
First and foremost, a strong and celebrated organizational culture is a beacon that draws in top performers. Truthfully, a good culture is a green flag for everyone, but if you want the best in the business, you need to offer more than just decent benefits or wages. Potential employees do their research on your company, too, so if you’d like your pick of the best, you’ll have to offer a consistent and coherent environment where qualified employees will want to work.
How much does culture really impact someone’s interest in your company? The answer is a lot. Research has shown that 86% of people looking for employment would not apply for or continue to work for a company that has a bad reputation with former employees or the general public—the reviews of your company reflect your culture and certainly affect the kind of employees who are willing to apply. This is especially true for great candidates because they know they have options! And it makes your life easier when candidates who don’t quite fit in with your culture can voluntarily opt-out.
Get More From Your Bottom Line
There are endless revenue advantages to having happy employees that are skilled at what they do and are engaged with your company. Having a culture that attracts high talent can lead to 33% higher revenue, and great hires that share your company values are going to reinforce your culture.
Which makes sense, right? Supported employees and safe environments increase communication and performance, which optimizes entire workflows and client results. People that care about the company and company values put greater personal effort into work, especially when employees feel valued themselves. Employees that are fully engaged will show up consistently with their best work, which is great for your company’s reputation and bottom line.
When you have a high employee turnover, it’s a sign that you aren’t meeting the needs of the employees you chose for your company. It could be that your competitors are offering something better, but “better” doesn’t always mean “more money”; in fact, it’s often related to employee benefits and our latest State of Work-Life Wellness report shows exactly this: 78% of US workers believe their wellbeing at work is just as important as their salary. Think about it – reimbursement for childcare, paid parental leave, flexible schedules, paid time off and volunteer time… who wouldn’t want access to these benefits? It’s expensive to hire, onboard and train new people compared to retaining qualified employees that you’ve already invested in.
So with a greater emphasis on work-life integration, mental health and job satisfaction, people are no longer tolerating toxic work environments or corporations that take advantage of their employees. Culture absolutely affects job satisfaction and is actually one of the primary reasons that people stay at their job—that kind of loyalty is difficult to buy with money alone.
Remember: when your employees feel safe, empowered, accepted and valued at work, they will perform better and develop a healthy sense of loyalty. Without that care, your employees will jump at a better opportunity, which you don’t want to underestimate, either. More and more businesses are enjoying the monetary and emotional payoffs of happy employees by upping their cultural benefits, so if an employer starts falling behind in this area, your good employees will always find a better situation elsewhere. Learn more about retaining employees by reading 9 Ways HR Can Turn the Tide on the Great Resignation.
What Shapes Organizational Culture?
Values and Mission
Yes, earlier we cautioned against relying solely on your mission statement to create an organizational culture but not because setting goals, having a vision and establishing values aren’t important. Every organization needs solid guidelines that direct the actions of the company. What kind of emotions and reactions will be encouraged or discouraged? How do your values and policies influence your effectiveness? Do the work environment and corporate expectations actually support the values and priorities the company claims to have?
Potential employees will look at your values to see if they align with their own, and current employees should be encouraged to embody those values in their work life (management and self management included). Work, communication and decision-making should be informed by the driving goal and associated values, especially when it comes to practices and policies. Good organizational culture is reflected in all aspects of the company and helps everyone stay aligned on the same path, same goal and same purpose.
There is typically an overarching culture that is implemented company-wide, but there are also smaller subcultures scattered across a company, too. These subcultures often enrich the dominant culture and add to the employee experience, but you also don’t want subcultures to threaten the core values or vision of the company.
A design team in a company may value creativity and innovation more than the sales team, who may prioritize consistency and communication. Maybe one office prefers to schedule group workouts during the week to bring people together, while others prefer a collective happy hour or a potluck. Some do volunteer work to help the community around the office, others join forces to send resources to a far away group of people in distress. . This is all understandable and even good – individuals that are culturally accretive will find their own ways to express themselves within the larger cultural environment. On the other hand, it’s always important to notice and take action on subcultures that undermine the primary culture, like if one branch has an overly authoritative management style that undercuts your flexible people-oriented culture. These might be traps that ultimately kill your culture if no deliberate action is taken.
Connections Between Team Members
No workplace is completely free of stress or difficult scenarios. There are waves of demanding shifts, frustrating clients or customers, or even outside factors like a worldwide pandemic. To endure difficult times, teams must be bonded by strong, sincere connections to one another.
Team building activities are an easy way, even remotely, to help people connect and optimize communication. Not only will this boost creativity, help resolve conflict faster, and promote diversity and tolerance, it will also create an open and safe environment – increasing trust between team members and reinforcing that everyone is valuable.
Opportunities for Learning and Development
Work is more than just clocking in and clocking out—at least, it should be if you want a successful organizational culture! Try and offer activities that help employees grow and develop, like providing a way to learn a new skill or opportunities to improve physical and mental health.
Encouraging employees to learn and develop new skills gives them an opportunity to grow personally and within the company. It also shows that a company cares and is willing to invest in their growth and their impact on the business. Employees that are taken care of feel valued and seen. Learn more about building a well-nourished workforce and collect the benefits in the long haul.
People get a taste of your organizational culture as soon as a potential employee shows interest in applying for a job, starting with the job posting and onboarding process.
Companies should hire for culture, not just skills, and reinforce the importance of that culture throughout the orientation process. Ask questions that will reveal what kind of values a potential employee shares with the company (while also being open to diversity that strengthens your culture). This not only gives new employees a sense of the culture but also gives them realistic expectations for their behavior and practices with the company.
Most people want to be recognized for their efforts, even if it’s on a small level. Knowing each employee and making efforts to notice their work can make a huge impact on culture. A culture of positivity and encouragement will actively recognize excellent employee work, behaviors and successes, especially when those efforts are rooted in the values of the company. Recognition can also become a source of inspiration to other employees of what (and how) to do to be recognized for their work.
Measuring Organizational Culture
How do you know whether or not your culture is meeting the needs of your employees? Even more important, how do you determine what you need to improve? Again, the answer is pretty simple: go straight to the source, while being truthful with yourself about what you want from your leadership team.
You also can look for the telltale signs of a struggling organizational culture: high employee turnover, low productivity, weak engagement, limited participation, feedback on lack of consistent decision making or fairness and poor company reviews from previous employees. If you can get a clear picture of company culture weaknesses from actual employees, past and present, the more likely you are to create an environment that produces success.
When it comes to your company, culture rules. People want to know what is expected of them and need to find the right fit for their personality, personal priorities, etc. A company that is transparent about its values and actively works to live by those standards will attract, empower, and retain the best employees for its services.
I know that was a lot but now you’re practically an expert on organizational culture… right? The truth is, evaluating your company culture is kind of like trying to blindly self-diagnose your own health—it’s time-consuming and a little discouraging at times. And I feel your pain. Luckily, you don’t have to figure this all out on your own: talk to a wellbeing specialist today to discover new ways to take care of and engage with your employees.
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- Your Best Employees Are Leaving. But Is It Personal or Practical? (August 28, 2018). Randstad US. Retrieved September 8, 2022 from https://www.randstadusa.com/business/business-insights/employee-retention/your-best-employees-are-leaving-it-personal-practical/.
The Gympass Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.