How Organizational Culture Impacts Employee Engagement and Performance

What is organizational culture?

Organizational culture is a set of practices, values, and behaviors that employees experience in a workplace. An organization’s culture is usually defined by the leadership and imbibed by the employees.

Culture may include everything starting from the vision and mission, shared beliefs, rewards and recognition processes, to the style of communication and feedback, language used, and written and unwritten rules and customs followed within the workplace.

There is a direct relationship between organizational culture and employee engagement, which is why this is a widely researched and discussed topic in the HR fraternity.

Why does culture matter?

If you look at the big picture, a society’s culture determines how people behave, respond, and interact with one another and how fast the society can grow as a community. This definition holds true for organizational culture too.

Here are some reasons why organizational culture matters.

• It helps create and maintain a unique identity for the organization
• It provides a sense of belonging and stability to the people in the organization
• Organizational culture helps retain top performers and valuable talent
• It creates a culture of engagement and increases employee productivity
• It keeps people happy and excited about the workplace

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How culture affects employee engagement

About 87% of the organizations agree that employee engagement and culture are two of their most vital workplace challenges. The easy solution to this is to work primarily on improving organizational culture. Then, the engagement part will automatically fall in place!

The culture that is prevalent within the organization is organically going to affect employee engagement every single day. How engaged employees are at the workplace depends on how happy and in-place they feel about the culture.

An example may help you understand this better.

There are offices where communication has always been a problem. These offices have a very strict and  rigid structure where employees are encouraged to communicate only with their direct managers and no one else. If you look at it closely, such organizations usually have a high turnover rate, meager productivity, and lots of internal feuds and negativity. As a result, employee engagement levels are  very low.

In contrast, organizations that practice an engaged culture see their employees happy, productive, and open. As a result, such workplaces are able to retain their top talent and grow at a much faster rate.

In simple terms, a positive work culture promotes productivity, engagement, and improved employee experience. A hostile work culture, in contrast, can affect productivity levels, increase turnover rate, and lead to employees feeling disconnected from their work and workplace.

The impact of organizational culture on performance

When an organization promotes a culture of transparency, has clear expectations, provides continuous feedback, and offers the right recognition, employees can easily understand what is expected of them. A culture that allows employees to be open, honest, and independent nurtures efficiency and cooperation within teams.

Together, well-defined organizational culture and employee engagement activities can make employees feel like they are valued and cherished within the organization, which affects their performance positively.

Studies strongly indicate that organizational culture is a competitive advantage that most companies ignore or are not aware of. But when used right, this can retain your top layer of talent, boost performance and productivity, and create self-reliant, independent, and responsible employees.

We already discussed that the right culture improves employee engagement. Now, experts say that engaged employees are up to 21% more productive!

Want to know more about how employee engagement can improve performance? Check out our blog.

Creating a culture of engagement by working on your current organizational culture will produce tangible results in terms of employee performance and productivity.

Here is a list of some of the vital cultural values that most leading companies advocate to improve employee engagement and performance.

How to improve organizational culture?

Your employee culture is a direct reflection of your workplace culture. For example, do you see your employees coming in late to the office, taking time to respond to emails or messages, trying to put down peers, or not putting in the right efforts to be productive?

Improving organizational culture may bring about a difference. When employees see the leadership making changes to how the organization functions and putting forth sustainable and holistic beliefs and values, they change their attitudes.

Here are some proven ways to create an environment of engaged culture.

1. Analyze your current rewards and recognition program and make changes to it. Create a culture of instant and hearty recognition. Read our blog to understand how effective your current R&R program actually is.
2. Share your success. Make employees a part of the success by keeping them informed, rewarding them, and offering bonuses appropriately when the company does well.
3. Revisit your current organizational culture and employee engagement Talk to your employees or create surveys to understand what you can do to make this better.
4. Invest in peer relationships. Experts believe that when the management takes a step back and allows employees to engage, converse, and even collide with one another, this can improve and naturalize employee relationships.
5. Create an environment of flexibility. Let employees have the freedom to step out for a personal task or work from home when needed. This improves employee morale and experience.
6. Stay true to the culture you propose. Nothing puts off employees like a management that doesn’t honestly believe in the culture it suggests. Only invest in a culture that the leadership entirely agrees to.

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How to build a high-performing workforce?

There is no secret formula to building a high-performing workforce. Instead, the efforts have to start from the time you hire someone.

Here are a few tips that may help you build a high-performing workforce.

• Be clear about your work culture even when you hire people. Employees who can align with the work culture will stay with you for a longer time.
• Invest time and energy on analyzing your current employee engagement and culture.
• Define goals and directions and keep your employees informed about the organizational goals at every point. This will give them a clear idea of what they should be doing to move forward.
• Make feedback a regular part of every workday. Feedback needs to flow in all directions and the management should help employees change their style to align with the work requirements.
• Recognition is one of the best ways to foster performance. Does your current R&R process match industry standards? If not, investing in the right tools can make a difference.
• Provide your employees with ample training and development opportunities. Again, this is an investment for the organization and will reap benefits with time.

Conclusion

Organizational culture and employee engagement go hand-in-hand. The strength of your corporate culture determines how successful you are as an organization. It is the foundation on which your employees will stand for the entire time they work for you.

A structured, transparent, and progressive work culture will help improve employee engagement and, as a result, improve employee performance levels too. So, if you want to build a high-performing workforce, the first thing you should invest in is improving your workplace culture. Changing organizational culture and employee engagement strategies is not an easy feat. However, it is definitely worth the investment.