A company’s culture is the shared values, beliefs, and practices that shape how an organization operates and its employees behave. You can think of it as the personality or atmosphere of the company, and it directly impacts the productivity of employees and the organization’s overall success.
Companies should prioritize building a good company culture because it impacts employee engagement, satisfaction, and retention. When employees feel valued and respected, they are more likely to be productive, motivated, and committed to achieving the company’s goals. Additionally, a positive company culture attracts top talent.
Company Culture Deep Dive
Here’s a deeper dive into how a company’s culture can affect employees and their employers, along with some practical tips for improving your organization’s culture.
Effects of Company Culture on Employees
Employees are “in the trenches,” so to speak, and they’re most affected by the company’s culture – both positively and negatively.
1. Job satisfaction and motivation
An employee’s job satisfaction and motivation to work are directly related. A positive workplace culture lets employees feel included and appreciated for their contributions. Happy and satisfied employees are more likely to go above and beyond their job descriptions, leading to better performance and productivity.
Meanwhile, a toxic work environment can cause employees to feel directionless, underappreciated, and isolated, reducing job satisfaction. In fact, employee satisfaction is 102% higher in companies with a supportive and thriving culture.
2. Productivity and engagement
The increased motivation from a strong company culture can drive employees to be more productive and engaged with their work. It helps them take ownership of their outputs instead of thinking about them as working just for the wages. A strong culture can also have workers adopting a company’s goals as their own, improving their desire to achieve them.
A weak and undirected company culture can leave employees feeling like just another cog in a corporate machine. This feeling is part of the driving cause of the trend of quiet quitting – employees only doing the bare minimum amount for their jobs. The US Bureau of Labor Statistics found that at least 50% of the workforce falls into this category. Think about it. Would employees be satisfied with a company that ignores their input and doesn’t care about their needs? If you found yourself working for such a company, would you be motivated to put in more effort? Not likely.
3. Mental and physical well-being
Stress can cause a variety of physical and mental health issues. For example, stress can cause depression, anxiety, and other mental health issues. It can also lead to unhealthy coping habits, like poor diet and substance abuse.
A company’s culture can affect the job-related stress an employee feels. For example, a highly competitive, petty culture can add unnecessary stress for employees and hinder their performance and work-life balance.
In a positive work environment, employers respect their employees’ time, their mistakes are corrected instead of ridiculed, and they cooperate instead of competing. They are less likely to feel overworked and experience employee burnout, which can lead to better physical and mental health.
A healthy workplace culture that minimizes unnecessary stress is highly beneficial for employees’ mental and physical well-being. Employees who see their company caring for their needs are more likely to feel satisfied with their employers.
4. Teamwork and collaboration
A positive company culture can promote unity and cooperation among employees, improving their collaboration. Working together can help employees solve problems that individuals can’t overcome alone.
While competition can improve motivation and promote innovation, too much of it can damage employee unity. For example, if a highly sought-after promotion or reward is up for grabs, desperate employees might sabotage others, hurting the company overall. “The whole is greater than the sum of its parts.” This adage holds for companies – a driven and united workforce working towards a common goal is much more effective than the scattered efforts of individuals. The application of this adage can significantly improve job satisfaction among employees.
5. Creativity and innovation
As previously mentioned, healthy competition can make employees more innovative as they try to create unique solutions to problems. However, if a company doesn’t listen or is quick to shut down suggestions, it can make employees with good ideas not want to speak up.
The next game-changing idea can come from anyone, so a strong company culture encourages feedback, which drives employees to want to innovate and be creative. Employees appreciate opportunities to think outside the box when solving problems. It helps them feel like more than just a body that produces work, but a person who’s part of something greater.
Effects of Company Culture on Employers
A strong company culture can significantly benefit employers as well.
A good company culture’s most simple positive effect is increased employee productivity, which boosts profits. Motivated and driven employees waste less time, put in more effort, and ultimately improve the success of an organization.
2. Retention and loyalty
A good company culture saves employers the expensive onboarding and training processes necessary for repeatedly replacing staff members. Happy employees are less likely to seek out other jobs and are likely to stay longer. While some turnover can be healthy for a company, frequent resignations can damage a company’s reputation and morale. They can also leave gaps in a management structure that can be expensive to fill quickly. Employers should invest in their employees long-term, as they are the backbone of any company’s operations.
3. Recruiting and marketing
Word of mouth is the most effective vehicle for spreading information, as 64% of marketers would agree. News about a company poorly treating its employees won’t stay within the company and will spread quickly. This information can damage the company’s image, turning away talented applicants and potential customers. Conversely, positive testimonies from employees can attract more customers and applicants. A good work environment is one of the factors that younger applicants look for the most, and top talents have the power to be picky.
4 Tips for Building a Strong Company Culture
Cultivating a strong company culture can take a long time, especially if a business already has a negative reputation. That’s why it’s best to take these steps now and consider them an investment in your employees.
1. Communicate goals and values clearly
Clearly stated goals and missions can help create a shared sense of purpose. It’s hard to put effort into a job that seems meaningless. By communicating company values, employees understand what the company stands for and its goal, which can inspire engagement and motivation.
2. Provide opportunities for growth and development
Employee morale suffers when workers feel like they’re in a dead-end position. Companies can circumvent this issue and improve an employee’s feeling of belonging by providing avenues for growth. Some examples of these opportunities include mentorship programs, training, and promotional opportunities.
3. Recognize effort, reward results
Not having your efforts recognized is a horrible feeling and can quickly dissuade you from working hard again. Employers must consistently and adequately give recognition to employees for their hard work and reward good performance. A good balance of rewards and recognition can motivate employees to work harder without causing them to become too competitive.