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What Is Organizational Culture?

Written by
Laura Saracho
Laura Saracho

When describing organizational culture, what words come to mind? Maybe…respect, engagement, diversity, or appreciation?

The importance of organizational culture is rarely disputed, yet there are mixed messages regarding its definition. Let’s explore this a bit further. 🔎

What does organizational culture really mean?

Michael D Watkins of the Harvard Business Review writes: “there is little consensus on what organizational culture actually is, never mind how it influences behavior and whether it is something leaders can change. This is a problem, because without a reasonable definition (or definitions) of culture, we cannot hope to understand its connections to other key elements of the organization, such as structure and incentive systems. Nor can we develop good approaches to analyzing, preserving, and transforming cultures.”

Ask people what their views on “organizational culture” are, and you’ll likely get endless variations. Can it really be objective at all?! 🙆

Let’s see if we can find a common ground.

SHRM explains that organizational culture sets the context for everything a company does. Because industries and situations vary significantly, there is not a one-size-fits-all culture template that meets the needs of all organizations.

Further, organizational culture can be defined based on values from assumptions of these common societal attributes:

  • Human nature. Are people inherently good or bad, mutable or immutable, proactive or reactive? These basic assumptions lead to beliefs about how employees, customers, and suppliers should interact and how they should be managed.
  • The organization's relationship to its environment. How does the organization define its business and its constituencies?
  • Appropriate emotions. Which emotions should people be encouraged to express, and which ones should be suppressed?
  • Effectiveness. What metrics show whether the organization and its individual components are doing well? An organization will be effective only when the culture is supported by an appropriate business strategy and a structure that is appropriate for both the business and the desired culture.

If we’re getting technical, here is another definition straight from a textbook. 📖

Organizational culture refers to a system of shared assumptions, values, and beliefs that show people what is appropriate and inappropriate behavior.

An organization’s culture provides a roadmap and guide for employees to know how to behave, and communicates the values the company aims to embody and emphasize. How easy are you making this orientation process for employees? Are there ways you can look closer at how organizational culture is impacting your team?

Ways organizational culture impacts your business

Syncing your culture and brand 👍

Brand. Yep, it’s another term that gets thrown around a lot. Businesses that have a strong organizational culture typically have reputable and positive brand identities as well. Why? Because these organizations are taking the time to define their reasons for existence, discuss the values they strive for, and explain how they operate.

Recognizable and memorable brands communicate the driving forces behind their efforts, including the individuals who make them great. Having consistency and clarity in your organizational culture lays the foundation for creating a brand story you’ll be proud to tell.

Denise Lee Yohn explains, “You have to make your company’s core values your own and then operationalize them. You should apply them to your organization by fleshing them out into a full set of core values that fit your organization and your specific brand identity."

Finding top talent 👀

It’s no secret that one of the top recruiting tools these days is leveraging your organizational culture. In a competitive hiring market, the places where employees feel valued, accepted, and appreciated will be some of the most sought after. Organizational culture should be at the forefront of how you are describing your ways of working to job candidates as well during the onboarding process.

A good organizational culture can be your best recruiting tool, as word of mouth and reviews become even more valuable for job seekers. On the other hand, not prioritizing your organization’s culture framework and communication can have a detrimental effect on recruiting and retention strategies. Companies with a reputation for healthy cultures like Southwest Airlines, Johnson & Johnson, and LinkedIn, experienced lower-than-average turnover during the Great Resignation.

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Improving work performance 📈

A common challenge for HR and People Ops teams is motivating employees to perform at the highest level while consistently providing support and meaning each day. It has to be a balanced system between how the employee feels and the quality of work they can produce. When your organizational culture is aligned with employees’ motivation and expectations, higher work performance will generally be the outcome.

There are many tools for developing and sustaining a high-performance organizational culture, including hiring practices, onboarding efforts, recognition programs, and performance management programs. Getting the right mix for these tools is very important. Nearly one in three newly hired employees' leaves voluntarily or involuntarily within a year of hiring (a number that continues to rise). Yikes. 

Want more? Check out the essential guide to employee engagement

What a strong organizational culture looks like

A strong organizational culture is known to be decisive, customer-oriented, empowering, and people-oriented. In general, three things will be fairly evident to spot a healthy and positive organizational culture:

  1. Employees know how top management wants them to respond to a situation.
  2. Employees believe that the expected response is the proper one.
  3. Employees know that they will be rewarded for demonstrating the organization's values.

Your company’s leaders must embody and live out your organizational culture to their best ability. It’s important to reemphasize core values, internal processes, and communication styles throughout the company. Consistency is essential when implementing new ideas or policies and addressing concerns.

A strong organizational culture helps build trust between leadership teams and each employee. Trust among your teams can reduce disagreements or unnecessary conflict and create better decision-making company-wide.  

How to identify and adapt your organizational culture

Where do you start to identify your culture? It’s best to understand three concepts that make up your organizational culture. Here are some examples from SHRM on how to sustain a culture. Having an understanding of how these affect each individual and are aligned with business outcomes and principles can make defining and managing your organizational culture much more effective.

  1. Social culture: group members' roles and responsibilities.
  2. Material culture: examine everything that people in a group make or achieve and the ways people work with and support one another in exchanging required goods and services.
  3. Ideological culture: group values, beliefs, and ideals—the things people view as fundamental. It includes the emotional and intellectual guidelines that govern people's daily existence and interactions.

Each organization is unique and there are endless ways for you to choose the kind of culture that fits you. Just know that over time, your culture will most likely change and adapt to your workforce.

Say you undergo a recent merger or acquisition. This is definitely a time when organizational culture evaluations come into play. Be sure to have regular ways of identifying how your culture might be shifting or needs to evolve. No company culture is perfect and you may experience some peaks and valleys along the way.

Be sure to get regular feedback from your workforce. Put together an instrument like a survey or rating system that’s designed around your company’s values, goals, and assumed cultural impact. It’s important to get a pulse from everyone on the team to uphold a strong and healthy organizational culture and be empathetic to each individual's experience. This practice can also help you identify areas of improvement or communication breakdowns that need a closer look.

Psst: Check out Bonusly's employee feedback platform, Signals.

Your People Ops or Human Resource teams should conduct routine audits as well to identify where your organizational culture is thriving…and where it could use some adjustment. Stay consistent with the ways and timing of when you collect information to have better evaluation metrics and historical value to measure your improvement over time.

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Takeaway

Your organizational culture sets the tone for your team to dream big and support one another. Make sure you are taking the steps to stay current with the latest tools and insights for being top of mind for new job seekers and keeping your high-performing talent.

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Laura Saracho

Laura is the content marketing manager at Bonusly and is passionate about employee engagement and uncovering creative, data-driven ways to drive impact. She loves writing and going on excessively long trail runs.

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