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What is company culture?

Company culture is the personality of a company and the environment in which its employees work. It is the unifying element that holds everyone in an organization together. Unlike an established mission statement, culture encompasses the written and unwritten behavioral norms and expectations of those within the company.

Every company is different, which means the way that its culture is formed will be different and unique. That's why there are so many types of cultures present in today's workplaces. Regardless of what type of culture you strive to create at your company, it is imperative that it fits your mission, values and goals, and that you are able to clearly define it. Knowing exactly what your company stands for and the culture it wishes to create is crucial to its success and your current and prospective employees.

Why is company culture important?

Recent studies have revealed that employees highly value company culture in their decision to stay with-or leave-a company. Moreover, it has been proven that employees who identify with and feel a sense of belonging to a company's culture are more productive, happier and want to work for the company for longer.

Retaining employees who are happy and productive is not only good for employee morale, but also for your bottom line. Turnover can be extremely expensive for employers when lost productivity and replacement costs are taken into account. According to the Society for Human Resource Management (SHRM), it costs, on average, six to nine months' salary to replace a salaried employee. This figure can be even higher for management and high-level executives. High turnover can also harm your company's culture and cause remaining workers to become disengaged and unproductive.

This toolkit serves as an introductory tool to company culture. It provides an in-depth summary of the prominent types of corporate culture, offers suggestions for how to create a positive culture at your company and provides tips for achieving a quality culture.

Weak vs. Strong Cultures

Because no two organizations have the same culture, there are a wide variety of cultures present in workplaces today. One constant, though, is that all cultures are able to be classified as either "weak" or "strong."

Evaluating Your Culture

There are a set of questions that you can ask yourself, your executive team and your employees to determine if your company's culture is strong and effective, or weak and in need of change. (Note: See Appendix B for a stand-alone version of these questions.)

Asking yourself and your employees these questions is valuable to the success of your organization's culture. These questions can help you reflect on your culture and gain insight into how your employees view your culture. The answers to these question may also point out areas of your culture that are in need of change.

For example, you may realize that your company has too many (or too few) rules. Or, you may want to implement a rewards-based program to reward employees who are demonstrating "good" behaviors to encourage others to do so as well. Taking the time to check in and evaluate your culture is important in deciding if your culture is strong or weak and in need of change.

8 Ways to Improve Your Culture

Culture can be influenced and new norms can be introduced to employees at any time. Even if a company is not suffering from a negative, toxic culture, there are always steps to take to improve company culture for both the short and long term.

  1. Recognize and reward valuable employee contributions. According to Deloitte, the top 20 percent of companies with a recognition-based culture have a 31 percent lower turnover rate. Fifty percent of workers surveyed by CareerBuilder believe that recognition is a factor that drives retention. To effectively implement a rewards-rich work environment, be sure to do the following:

    • Identify specific behaviors and/or results aligned with your company's values. Recognize those behaviors as frequently as possible.

    • Make it easy for everyone at your company to recognize and reward co-workers' behaviors. Often, peer-to-peer recognition is the most effective way to infuse recognition into your culture.

  2. Encourage employee autonomy. It's no secret that micromanaging your employees rarely produces favorable outcomes. Trusting your employees to manage their responsibilities on their own is not as simple as it sounds, though. Some simple, yet effective ways to inspire employee autonomy include the following:

    • Establishing autonomous work groups

    • Reining in bosses or co-workers who tend to hover over others

    • Creating decision-making opportunities

  3. Incorporate flexibility into your organization. Workplace flexibility can improve morale and reduce turnover. In fact, 51 percent of workers surveyed by CareerBuilder believe that a flexible schedule is a factor that significantly drives retention. Workplace flexibility programs are up to the organization's discretion, but common ways flexibility is demonstrated include the following:

    • Telecommuting (work from home) opportunities

    • Flexible scheduling opportunities

    • Paid time off (PTO) policies

  4. Provide regular and timely feedback. Once-a-year feedback is a thing of the past. Younger generations thrive in environments where they know exactly how they are doing. Continuous, meaningful feedback provides employees with the tools they need to improve and grow. Opportunities to provide feedback outside of performance reviews could include the following:

    • Monthly or semi-monthly check-ins between a supervisor and employee

    • Peer-to-peer weekly check-ins

    • Mentoring programs

  5. Embrace workplace transparency. Trust is the foundation of a great company culture. Transparency can improve employees' trust of upper management, give employees insight into a company's operations and future, and improve cross-departmental collaboration. One way to improve your organization's transparency is to share both the successes and challenges your organization and its employees face with everyone.

    Another way to improve the transparency in your organization is to implement modern communication and collaboration tools. These tools make it easy for your employees to connect with one another and share crucial information. Listed below are popular tools used by other companies for chat and collaboration, video conferencing and project management purposes.

    • Chat and collaboration

      • Yammer

      • HipChat

      • Google Apps for Business

    • Video conferencing

      • Skype

      • Google Hangout

    • Project management

      • Jira

      • Trello

  6. Promote strong professional co-worker relationships. According to the Society for Personality and Social Psychology, when individuals identify with and are invested in professional relationships with their colleagues, workplace productivity increases, employee morale increases and burnout levels decrease. However, building strong relationships takes time and effort. To help your employees, consider the following suggestions:

    • Encourage collaboration and peer-to-peer work.

    • Create "collision points" in your office. Collision points include areas like a communal coffee station or cafeteria.

    • Host events. No matter how small (think: team happy hour) or large (think: corporate outing), employer-sponsored events are a great way for employees to interact with peers that they normally would not on an average day.

  7. Create a mentoring program. Providing employees with professional development opportunities is a low-cost retention tool and a simple way to improve employee engagement and your company culture. A mentor is an individual in the workplace who shares his or her knowledge and expertise to help another employee grow professionally. Some companies use group mentoring, third-party mentoring or reverse mentoring, while others use peer mentoring, flash mentoring or one-to-one pair mentoring.

    Mentoring programs provide benefits to all parties involved. Benefits include the following:

  • Skill development. Mentors teach mentees the skills and qualities necessary for success. Mentoring provides mentors with the opportunity to develop their communication and leadership skills.

  • Improved networking and teamwork. Mentoring allows employees to build a professional relationship over a period of time and teaches them about the value of networking. This also instills a sense of cooperation and teamwork at your company.

  1. Improve your "soft" benefits offerings. There are a variety of employer-sponsored programs that encourage employee engagement, increase employee morale and attract new talent. Workplace flexibility is a highly effective benefits offering. Other top benefits to offer are listed below.

    • Wellness incentives

      • Subsidize gym memberships.

      • Provide healthier food and beverage choices.

      • Sponsor company sports teams.

    • Trendy, new voluntary benefits

      • Identity theft protection

      • Student loan repayment programs

      • Financial counseling services

      • Pet insurance

      • Discount programs

    • Child care benefits

      • On-site child care

    • Fringe benefits

      • Company-provided beverages and food

        A great company culture attracts the best workers, increases retention and improves employee performance. These eight suggestions can positively impact your existing or new company culture.

Common Mistakes That Ruin Culture

Summary

Today's workplace is vastly different than it was in the past. Prospective and current employees care about your reputation as a company and are evaluating potential employers on their corporate culture. In fact, many millennials view cultural compatibility with a company as just as important as salary. Culture can set one company apart from others.

Moreover, a positive and strong company culture vastly improves retention rates as employees who identify with and feel a sense of belonging to a company culture are happier and are more likely to stay at an organization for longer.

Use the tips and advice provided in this toolkit to create and cultivate your company's culture. For more information on company culture, contact GDI Insurance Agency, Inc..

Developing a Screening Process for a Good Cultural Fit Checklist

Use this checklist to create a screening process based on your company culture.

  • Ask employees at various levels of the organization how they see your company culture. Then, identify the similarities that arise among individuals-motivations, values, core competencies, etc.

  • Create a brand to describe your organization to potential employees.

    • Depict your culture accurately so that candidates can filter themselves in or out based on how you describe the company. If they do not see themselves fitting into your culture, they may not even apply.

  • Have candidates complete an online assessment as part of the recruitment process to screen potential candidates based on their qualifications, personality and other factors. Use properly validated assessments that meet legal and professional standards.

  • Ask questions about traits that you cannot or do not want to train someone how to do (being self-motivated, possessing integrity, etc.). Questions should determine if candidates have values and competencies that match the company's culture.

    • Ask behavior-related questions and then rate open-ended answers on a scale.

    • Ask for examples of situations in which candidates faced dilemmas or problems and successfully overcame them.

  • Role-play during the interview process to observe candidates in action. Or, allow them to try out the position for a day to see if it seems like a good fit for them (and for you).

  • Know the laws applicable to hiring. 

  • Create metrics for measuring cultural fit by determining cost-per-hire, time-to-fill and quality-of-hire data.

  • Make sure management is trained on how to properly interview for behaviors.

  • Maintain accurate records of all your hiring decisions. During an audit or discrimination claim, you will need to produce a valid justification for your decisions.

    Human resources should stay on top of monitoring, learning and studying the culture of the organization, and then design policies that align with the culture. HR should constantly be asking if the organization is truly what it claims, if it needs to modify the culture to be more competitive and if it is remaining compliant with all hiring laws.

Company Culture Evaluation Survey

Use this survey to evaluate your company's culture. This survey can be completed by all employees.

QUESTION

ANSWER

What behaviors are rewarded? What behaviors are punished?

 

What rules and expectations are followed, enforced or ignored?

 

What happens when someone makes a mistake, disappoints or fails?

 

How is risk and uncertainty perceived?

 

How prevalent is blame and how does it show up?

 

Do you feel safe and supported when asking for help?

 

Do you think others feel safe and supported when asking for help?

 

Is the discomfort of learning or trying new things normalized?

 

How would you describe the culture of your organization?

 

Is open communication embraced?

 

One of the many HR programs GDI offers its clients at no charge. Not every HR program is right for every client. GDI has 3 different programs we can custom fit to your companies individual needs.


 

This HR Toolkit is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.