How Organizational Culture Shapes the Employee Experience

Company culture is more important than many leaders realize. When employees enjoy a positive organizational culture, they are happier and more engaged β€” and the whole company benefits.

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Many business leaders today are worried about their bottom line. Statistically speaking, 40% of CEOs worry that their business won't be economically viable in the future. Undoubtedly, many see selling more products, capturing new markets, creating better marketing strategies, and even investing in new technology as obvious answers to this critical issue.

One important aspect of their organization that leaders often overlook is company culture. Not only do they struggle to define it but they mostly see it as a "softer" aspect of their organization, wholly unrelated to profit. However, this could not be further from the truth.

‍Why should you strive for a strong organizational culture?

In many cases, organizational corporate culture is one of the most vital factors driving performance. Why is organizational culture important? It's what determines:

  • How engaged employees are
  • How happy they are at work
  • How well they work together
  • Their level of innovation and creativity
  • How long they stick around

Culture differentiates companies from each other and affects their ability to attract and retain top talent. All of these things directly affect your bottom line.

Are you a leader wondering how to take your business to the next level? If so, the employee experience is a great place to start looking for opportunities to make changes. A company's culture directly affects how employees feel about and operate within your company. For this reason, it's worth an in-depth look.

What is organizational culture?

There are several different definitions of organizational culture. However, one that many leaders can agree on is that culture is a set of core values and practices that inform how people behave within an organization. Whether employees are remote or work from the office, culture guides how people "do things around here."

While culture may be difficult to define, there is no doubt that it significantly impacts the employee experience. It affects how employees feel at work and how your employer brand is presented to the outside world. For this reason, assessing your organizational culture, what drives it, and how you can improve it should be a top priority.

How does an organization's culture impact employees?

If you've thought about your company culture for any length of time, you probably don't have to ask yourself, "Why is organizational culture important?" You know that your organizational culture is central to creating a great employee experience. It's what attracts talented candidates to your business and makes them want to stay.

However, knowing the ins and outs of how that happens is key to making the necessary changes to create a company culture your employees will love. Here are three critical ways that your organization's culture impacts your employees. You'll also discover how you can use culture to benefit both your company and those who work for you.

Positive company cultures boost employee performance, satisfaction, and engagement

Employee Performance πŸš€

It can sometimes be challenging for leaders to make the connection between company culture and employee performance. After all, shouldn't employees just show up and do their jobs well regardless of whether they feel comfortable at work? In an ideal world, this is how things would operate. However, employees are not robots, and they don't perform work in a vacuum. Everything going on around your employees affects the caliber of work they're able to offer you.

Research has shown that if you want innovation, you need a workplace culture that fosters psychological safety. This is simply a measure of how comfortable your employees feel being themselves without fear of retribution. When employees aren't worried about what might happen if they fail, they're more likely to speak up. They may even be able to offer creative solutions to company-wide problems. This, in turn, has the potential to drive greater levels of innovation in your company.

Additionally, a strong company culture tends to point and push everyone in the organization toward the same goal. Research from Gallup suggests that a 10% increase in how connected employees feel to the mission and purpose of the company decreases turnover by 8.1% and increases profitability by 4.4%. Employees simply perform better and work harder when they know their work is meaningful. They need to see clearly how what they do each day connects to the mission.

Employees are 55% less likely to look for other job opportunities when they feel connected to a positive company culture
Source: Gallup

It's also important to note that a good company culture fosters committed employees who are more likely to stick around. Research shows that employees are 55% less likely to look for other job opportunities when they feel connected to a positive culture. High attrition is not only expensive but it can also negatively impact employee performance.

If experienced employees continually leave the company, they take all of their knowledge and ideas with them. Those things cannot be passed down to newer employees who may need that mentorship to increase their own performance. Because experienced employees are better at their jobs, losing them can impact overall performance.

Employee Satisfaction 🌟

Some leaders may not believe employee happiness is important. However, research shows otherwise. A happy environment creates close working relationships. These are critical for building camaraderie and fostering communication and collaboration. Employees who have close relationships with others are 50% more satisfied with their jobs. They are also seven times more likely to be engaged and productive at work.

Happy workplace cultures also promote better performance among employees. In sales organizations, happy employees have been known to increase sales across the organization by as much as 37%.

A happy workplace culture also has benefits for executives and investors. Businesses on the Fortune 100 Best Companies to Work For list have tripled their stock market performance. Collectively, they beat the market by a factor of 3.66%. Some leaders may remain skeptical about whether improving workplace culture has real benefits. Still, the results continue to speak for themselves.

Employee Engagement πŸ‘¨β€πŸ‘©β€πŸ‘¦

When employees are happy, they are more enthusiastic about and engaged in their work. This engagement, in turn:

  • Decreases absenteeism by 81%
  • Decreases turnover by up to 43%
  • Increases customer loyalty by 10%
  • Increases productivity by 18%
  • Increases profitability by 23%
Those who feel well-connected to their company culture are 3.7x as likely to be engaged at work
Source: Gallup

Gallup research also shows that workplace culture is a huge driver of workplace engagement. Those who feel well-connected to their company culture are 3.7x as likely to be engaged at work and 68% less likely to feel burned out during the workday.

Clearly, engagement and culture are inextricably linked. Focus on building a culture that promotes engagement among your employees. When you do, it has the potential to impact your business and employees in many positive ways.

Growth 🌱

A culture of engagement encourages employees to work hard and pursue continuous learning. As they do, they're able to keep growing personally and professionally. This growth not only makes them better at their jobs but also allows them to take on mentor roles and share their knowledge with other employees. However, an employee's growth also benefits the company. This is because employees who grow professionally are better at offering skills and ideas to move the company forward.

Communication πŸ’¬

Engaged employees are more likely to communicate well with their colleagues. For example, employees who are truly engaged in their projects can see problems coming down the pipeline. As a result, they can initiate proactive communication to help turn things around before they have a negative impact.

Also, note that your company's cultural norms for communication can affect employee engagement. Poor communication from a supervisor can hinder employees from getting pertinent information. If they don't receive it in time, they may not be able to do their jobs well.

If a manager's communication is harsh and devoid of empathy, it can dampen morale and cause employees to disengage. The opposite can happen when higher-ups make communication a two-way street and listen to employees' ideas and concerns. When that happens, it shows that you value employee contributions. As a result, they're more likely to stay engaged.

Collaboration 🀝

Collaboration in the workplace is what connects employees to each other. It reminds employees that everyone is working toward the same goal and that it matters that everyone gets there together. However, employees often need to have a safe culture for them to share ideas and feedback with others. This is what will truly move the needle on the most critical projects.

Without this type of positive culture, employees may opt to keep their ideas to themselves. Unfortunately, this can crush your collaboration efforts. It can also lead to employees feeling disengaged from each other and from the work. That disengagement will be further detrimental to productivity and a spirit of camaraderie.

How does leadership influence organizational culture?

Business leaders must realize that a solid company culture won't build itself. It takes time and effort. The culture of a company is what sets the direction and tone for how employees at every level work and behave. Therefore, those at the top should decide on and be committed to modeling the culture they want to see.

Leadership πŸ’Ό

Leadership influences organizational culture by defining the company's values. These can simply be defined as the beliefs and principles that make up the core of your business. In other words, your values drive the "why" behind your actions.

Suppose that your company values honesty, trust, accountability, and a commitment to customer service. In that case, these values will be reflected in how employees engage with each other, with management, and with clients. If you want to change organizational culture, your values are a good place to start.

Additionally, company leadership influences organizational culture by rewarding values-aligned behavior. When an employee works hard to uphold cultural values, it's important to ensure those at the top recognize them for it. Where possible, ensure that promotions are about more than just talent. Evaluate employees who are up for promotion on whether their behavior is in line with the company's mission and culture.

HR πŸ§‘β€πŸ’»

Human resources professionals play an important role in influencing company culture. This is especially true because the human resources department is so heavily involved in curating the employee experience. First, you'll want to ensure that you are putting the company's values front and center with every communication. Take time to ensure that your language and tone reflect this commitment.

Because HR professionals work closely with employees, they are best able to see where the gaps are and what opportunities they present to improve company culture. Make note of these areas. Then, suggest initiatives to help the company promote behavior that is more in line with its stated values.

Finally, remember that you're the professional responsible for hiring candidates. As such, you should make sure that you are selecting candidates with qualities that will support the company's values and culture. It may take time for any new employee to get acclimated. Yet, you will likely have much more success with those who already display traits you want your employees to have.

Workplace culture is important to the employee experience

So, why are organizational cultures important to pay attention to? Ultimately, workplace culture is the main driver of the employee experience. All business leaders must cultivate the desire to build a strong culture in their company on a foundation of trust, safety, and empathy. Making sure employees are happy and engaged at all levels should be the primary focus.

As you go about creating (or revamping) your culture, make sure you stay committed to the right things. Remember that communication and collaboration are key to keeping employees moving forward. A culture of continuous learning fosters growth and ensures that innovation and creativity can thrive. This, in turn, will have positive impacts on your bottom line and, in some cases, that of your stakeholders.

Always keep in mind that your company culture will be unique to your business. Make sure you're building culture with your values in view. When you're able to show employees how everything they do furthers the mission, you'll have a thriving workforce that is ready to help you take your company to a new level.

If you're looking to build a better workplace culture, it starts with getting your team on board. Invest in employee experience and your desired culture by booking team building experiences with Confetti!

Navigating the Workplace Revolution: Company Culture in a Distributed Workforce
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Frequently Asked Questions

What are the different types of organizational culture?

The 4 most popular types of organizational culture are:
1. Clan Culture: Places a strong emphasis on collaboration, teamwork, and a supportive, close-knit working environment.
2. Adhocracy Culture: Focuses on adaptability and innovation and encourages risk-taking and a dynamic approach to problem-solving.
3. Market Culture: A more competitive environment that values achievements, results, and focuses on the external market.
4. Hierarchy Culture: Operates like a well-oiled machine that prioritizes structure, stability, and an organizational hierarchy.

How does leadership impact organizational culture?

Leadership plays a major role in shaping organizational culture by acting as cultural ambassadors and guiding employees in a way that's aligned with the company's ethos and values. Strong leaders encourage open communication, collaboration, and trust in the workplace.

On the other hand, poor leadership can contribute to a toxic work environment.Β 

How does organizational culture impact the employee experience?Β 

A positive organizational culture creates a sense of belonging, shared company values, and a supportive work environment. Employees are more likely to be engaged and motivated when they are aligned with the company's culture.

A negative organizational culture can lead to dissatisfaction, unwanted stress, and disengagement.

Do businesses change their organizational culture?

Yes, sometimes organizations do undergo cultural change. This is often a result of changes in leadership, external factors, or the constantly evolving market. Cultural change is a gradual process that requires alignment and commitment throughout the organization.

HR professionals are the key players in facilitating and managing these changes, making sure the shift aligns with the company's values and maintaining a positive impact on the employee experience.Β 

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