Company Culture – Meaning, Benefits and Strategies

JULIAN LUTE

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We all know how it feels when there is a lack of trust in our organization. That feeling of someone always breathing on your neck, someone always lurking from behind, ready to pounce on you as soon as the opportunity strikes. But can you measure trust (or distrust) in your workplaces? Does it depend on how many CCTV cameras you have in operation, or maybe the amount of virtual meetings you schedule in your calendar?

How can you say that a workplace culture is good or even great, and is there really such a standard? When we talk about workplace culture, we look at how things are done in the workplace-that involves the tangibles like your system, and the intangibles like your behavior. In short, it is an overall feeling which may seem relative to some, but, with 3 decades of research and after analyzing thousands of employee surveys across the globe, Great Place to Work explains what seems to be an abstract concept and turned it into something quantitative and measurable.

We unpack the basics of what a company culture is, right in this article.

Ask 10 people to define “company culture” and you’ll get 15 different answers. But after studying great workplaces for over 30 years and listening to how employees describe their workplace experience, Great Place to Work® has decoded the psychology behind company culture.

What is company culture?

Company culture is how you do what you do in the workplace. It’s the sum of your formal and informal systems and behaviors and values, all of which create an experience for your employees and customers.

At its core, company culture is how things get done around the workplace. “How” includes both the formal systems, and the informal behaviors.

For example, your company may use instant messaging software to communicate throughout the day (system), and it may also be okay to yell at a coworker to get your point across (behavior). Your systems and behaviors give employees the “rules of the road” for interacting with the business, and each other.

Company culture is often something you can feel, even as an outsider.

I can recall the first time I walked into the lobby of a company on our Fortune 100 Best Companies to Work For® list. As I approached the door, employees who were walking in and passing by made eye contact and said “hello.”

The employee behind the desk greeted me warmly, offering me a cup of coffee and a comfortable seat. There was a distinct, positive energy in the building. My first experiences as a guest gave me a taste of how they “do things around here.”

How to identify your company culture

The best way to understand a company’s culture is to ask employees. This could be through an employee experience survey platform like Emprising™.

You’ll hear some people describe a company culture with statements like “people are willing to talk to each other, share what they know and take the proactive step to get you in touch with the right person,” or “people always come first”.

Cool perks like unlimited vacation time and innovative policies may help shape company culture, but they do not make a great workplace. The experience of your people does.

Where does organizational culture come from?

Of all the ingredients that make up your organizational culture, the most important variables are how:

•  Employees communicate with each other

•  Decisions are made

•  People are hired, promoted, and let go

•  Employees are recognized

•  Employees celebrate their work and each other

Every company does each of these things, but as in most things, it’s not what you do, it’s how you do it.

Why is company culture important?

Company culture is important because it directly affects company performance on key metrics including finances, employee retention, innovation and customer service.

1. Financial returns

According to research by Great Place to Work and FTSE Russell, annual returns for the 100 Best Companies have had a cumulative return of 1,709% since 1998, as compared to a 526% return for the Russell 3000 Index during the same period.

2. Employee retention

When a workforce is diverse and the company culture is inclusive, equitable and rewarding for all employees, people are willing to stay at the company a long time. Millennials, for example, are 11 times more likely to leave their company than Gen Xers if their needs for purpose at work are not met.

3. Innovation

When employees experience inclusive leadership behaviors and systems, they are better poised to speak up, share ideas and adapt to change. This is what we call a culture of innovation or Innovation by All™.

4. Customer service

Studies confirm that employee happiness translates into employee efficiency, creativity and productivity. This, in turn, has the same effect on customers.

In our own research on the average U.S. workforce and how they compare to Great Place to Work-Certified™ companies (companies where employees rank the company culture highly), we found that employees at Certified workplaces are 34% more likely to rate their customer service as “excellent.”

4 keys to building an effective company culture

1. Start where you are

Whether you have five employees or 50, there’s no better place to start than where you are. Initiate conversations with your employees about what makes your workplace distinct.

They’ll give you the language around what makes your culture tick. For marketing agency Brains On Fire, these initial conversations formed the basis of their company values.

2. Define the boundaries

Effective company culture doesn’t happen by accident, so once you have a pretty good understanding of what’s working in your workplace, apply your aspirational vision.

What is the experience you want to your employees to have? What do you want customers to say about your company? What behavior is inbounds and what is out-of-bounds?

Based on employee feedback, Brains On Fire created a series of “golden rules,” or team values to encapsulate their principles and guide employee behaviors, such as “clear is kind” and “de-escalate versus escalate.”

3. Model the way

This is where leaders must step up to move beyond words into action. Your mission, vision and values often reside on the wall, but the company culture is HOW you achieve those ends.

If integrity is a core value, make sure everyone knows what it means to ACT with integrity. If transparency is a core value, make sure you demonstrate WHAT transparency looks like.

And remember, you’re either building, breaking or rebuilding trust in every interaction with employees, so make your early ones count.

4. Measure your progress

Even our best intentions may fall short of producing the desired employee experience, so make sure you’re getting regular feedback.

Your people want to share their thoughts and recommendations for change, and the more you ask them, the more they’ll offer their best thinking to help continuously improve your business. Monitoring and analyzing employee feedback trends via an employee survey platform like Emprising will help guide your strategic HR decisions.

Assess and transform your company culture

Change involves introspection, so, naturally, the best leaders put a lot of focus on reflection. If you want to analyze your company culture and measure your progress, reach out to us about our survey and assessment tools for transforming company culture.

JULIAN LUTE

Author

Great Place To Work identifies Best Workplaces™ in Asia by surveying over 1 million employees in Asia and the Middle East about the key factors that create great workplaces for all and analyzing company workplace programs impacting over 4.7 million employees in the region.

To be considered, companies must first be identified as outstanding in their local region by appearing on one or more of our Best Workplaces lists in Greater China (including China, Hong Kong and Taiwan), India, Indonesia, Japan, Kuwait, Philippines, Qatar, Saudi Arabia, Singapore, South Korea, Sri Lanka, UAE, Vietnam during 2021 or early 2022.

Companies rank in three size categories: Small and Medium (10-499 employees); Large (500+); and Multinational. Multinational organizations are also assessed on their efforts to create great workplaces across multiple countries in the region. They must appear on at least two national lists in Asia and the Middle East and have at least 1,000 employees worldwide with at least 40% (or 5,000) of those employees located outside the headquarters country.

Great Place To Work identifies Best Workplaces in Asia™ by surveying 2.1 million employees in Asia and the Middle East about the key factors that create great workplaces for all and analyzing company workplace programs impacting 5.9 million employees in the region.

To be considered, companies must first be identified as outstanding in their local region by appearing on one or more of our Best Workplaces lists in Bahrain, Greater China (including China, Hong Kong and Taiwan), India, Indonesia, Japan, Kuwait, Oman, Philippines, Qatar, Saudi Arabia, Singapore, South Korea, Sri Lanka, UAE, Vietnam during 2022 or early 2023.

Companies rank in three size categories: Small and Medium (10-499 employees); Large (500+); and Multinational. Multinational organizations are also assessed on their efforts to create great workplaces across multiple countries in the region. They must appear on at least two national lists in Asia and the Middle East and have at least 1,000 employees worldwide with at least 40% (or 5,000+) of those employees located outside the headquarters country.

For All™ Methodology

Great Place To Work, the global authority on workplace culture, determined the Philippines Best Workplaces™ 2023 List by conducting annual workforce studies through our Trust Index Survey™ and Culture Management platform Emprising®, representing the voices of over 450,000 employees across the Philippines.

Employees responded to over 60 survey questions describing the extent to which their organization creates a great place to work For All™, meaning that the company empowers all individuals to reach their full human potential. Eighty-five percent of the evaluation is based on what employees report about their experiences of trust and reaching their full human potential as part of their organization, no matter who they are or what they do. We analyze these experiences relative to each organization’s size, workforce makeup, and what’s typical in their industry and region. The remainder of the evaluation is an assessment of all employees’ daily experiences of the company’s values, people’s ability to contribute new ideas, and the effectiveness of their leaders to ensure they’re consistently experienced.

To ensure surveys truly represent all employees, we require enough people in each organization to respond that results are accurate to a 95% confidence level and 5% margin of error or better. We review any anomalies in survey responses, news, and financial performance to ensure there aren’t any extraordinary reasons to believe we couldn’t trust a company’s survey results.

For All™ Methodology

Great Place to Work, the global authority on workplace culture, determined the Philippines Best Workplaces™ 2022 List by conducting annual workforce studies through our Trust Index Survey™ and Culture Management platform Emprising®, representing the voices of over 130,000 employees across the Philippines.

Employees responded to over 60 survey questions describing the extent to which their organization creates a great place to work For All™, meaning that the company empowers all individuals to reach their full human potential. Eighty-five percent of the evaluation is based on what employees report about their experiences of trust and reaching their full human potential as part of their organization, no matter who they are or what they do. We analyze these experiences relative to each organization’s size, workforce makeup, and what’s typical in their industry and region. The remainder of the evaluation is an assessment of all employees’ daily experiences of the company’s values, people’s ability to contribute new ideas, and the effectiveness of their leaders to ensure they’re consistently experienced.

To ensure surveys truly represent all employees, we require enough people in each organization to respond that results are accurate to a 95% confidence level and 5% margin of error or better. We review any anomalies in survey responses, news, and financial performance to ensure there aren’t any extraordinary reasons to believe we couldn’t trust a company’s survey results.

Categories:
These organizations’ assessment is based 100% on employee responses to the Trust Index survey.

  • Small 10-99 Employees

For larger organizations with more than 100 employees, we also use our Culture Audit™ tool, asking organizations to share with us their practices, policies, and programs to create a great workplace For All™ and evaluate the approach they take.

  • Medium 100-999 Employees
  • Large 1000+ Employees

Why do you say in one place your national list scoring is based on 85%/15% and in another place that it is 75%/25%?

We are explaining two different things:
1.  The criteria we evaluate

  •  85% concerned with Trust and Maximizing Human Potential and
  • 15% concerned with everything else

2.  Where the data comes from

  • 100% Trust Index for organizations with less than 100 employees
  • 75% based on the Trust Index survey analytics and 25% based on responses to the Culture Audit for organizations with more than 100 employees.
For All™ Methodology

Great Place To Work, the global authority on workplace culture, determined the Philippines Best Workplaces™ 2023 List by conducting annual workforce studies through our Trust Index Survey™ and Culture Management platform Emprising®, representing the voices of over 450,000 employees across the Philippines.

Employees responded to over 60 survey questions describing the extent to which their organization creates a great place to work For All™, meaning that the company empowers all individuals to reach their full human potential. Eighty-five percent of the evaluation is based on what employees report about their experiences of trust and reaching their full human potential as part of their organization, no matter who they are or what they do. We analyze these experiences relative to each organization’s size, workforce makeup, and what’s typical in their industry and region. The remainder of the evaluation is an assessment of all employees’ daily experiences of the company’s values, people’s ability to contribute new ideas, and the effectiveness of their leaders to ensure they’re consistently experienced.

To ensure surveys truly represent all employees, we require enough people in each organization to respond that results are accurate to a 95% confidence level and 5% margin of error or better. We review any anomalies in survey responses, news, and financial performance to ensure there aren’t any extraordinary reasons to believe we couldn’t trust a company’s survey results.

Categories:
These organizations’ assessment is based 100% on employee responses to the Trust Index survey.

  • Small 10-99 Employees

For larger organizations with more than 100 employees, we also use our Culture Audit™ tool, asking organizations to share with us their practices, policies, and programs to create a great workplace For All™ and evaluate the approach they take.

  • Medium 100-999 Employees
  • Large 1000+ Employees