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CoAdvantage’s Definitive Guide to Workplace Culture, Part 1: What is it, and How Does it Impact You?

Workplace culture can be an abstract concept, but it’s something that has very tangible impacts. As a result, it’s important for business leaders to have a good grasp on the culture of the workplace and, if necessary, take specific actions to improve it. In this three-part series, we will look at what workplace culture is, how it impacts a business, how to spot a bad or worsening culture, and how to improve the culture of your workplace.

But first, let’s define what we’re discussing. Merriam-Webster defines corporate culture as “the set of shared attitudes, values, goals, and practices that characterizes an institution or organization.”

Even with that definition, understanding workplace culture is tricky because culture may not directly cause specific outcomes. Instead, culture shapes (1) employee experience, which then affects (2) employee engagement, which (3) changes employee behaviors for better or worse, and it’s those behavioral impacts that yield (4) productivity gains or losses and other business outcomes.

In a meta-analysis of Gallup polls, Gallup found that when employees agreed with statements like “The mission/purpose of my company makes me feel my job is important” and “At work, my opinions seem to count” and “At work, I have the opportunity to do what I do best every day,” employees were more likely to report higher job satisfaction. Economists at the University of Warwick further found that happy employees are 12% more productive than the average worker (unhappy employees are 10% less productive).

Research does suggest that it’s a causal relationship, even if it’s indirect. Dealerships that prioritized workplace culture had 30% higher customer satisfaction scores, 15% greater employee productivity, 20% less absenteeism, and 65% greater share-price increases over those that tried to emphasize performance over culture.

In contrast, problematic workplace culture can erode both productivity and employee well-being. At one extreme, bad workplace culture might mean that the workplace environment condones or even encourages dysfunctional behavior, like bullying, cutthroat political maneuvering, and harassment. But a difficult workplace environment can also be one that seems normal: simply a high-pressure environment created or supported by a work culture that emphasizes results at any cost, in which employees are constantly subjected to stress, anxiety, and overwhelm about the work they’re doing. Either way, businesses that permit these kinds of negative cultures to take root and grow are doing themselves and their employees a measurable disservice.

But a major problem is that it can be difficult to tell when employee culture is problematic enough to start compromising real results. How can you tell if your culture is at risk? We’ll look at the indicators of a poor workplace culture in our next article in this series.

CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about our ability to create a strategic HR function in your business that drives business growth potential, contact us today.

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