Defining Company Culture and Its Importance
Company culture directly results from the behaviors, actions, and language of employees and leadership teams. While culture reflects leadership’s interpretation of core values, it’s up to everyone to create an inclusive, welcoming environment that improves decision-making, productivity, and communication.
Unfortunately, teamwork in many organizations, from startups to enterprises, struggles with workplace culture and how to ensure the wellness of all employees.
Even if you don’t struggle with workplace culture, it’s an excellent idea to take a pulse check every so often so as not to lose sight of what’s important through day-to-day activities.
In this article, we explore what metrics you can use to determine the health of your company’s culture and how to obtain the data you need to make informed decisions.
Metrics for Measuring Company Culture
For some, metrics is a bad word that strikes fear in those who are scared of the results. Other times, metrics are a fuel for change where every result reveals a pattern or behavior. But when it comes to organizational culture, some metrics provide invaluable insight into how employees experience your workplace environment. Using these standards, you can find out where your workplace culture stands.
It’s no secret that the stronger an organization’s culture is, the more productive its employees are. That’s why it’s vital to analyze productivity metrics to understand how employees value doing a good job for the organization. But what productivity measurements should you be looking at to gauge company culture?
The most straightforward metric is the projected versus actual results performance numbers. These can be sales quotas, customer engagement numbers, or projects completed versus projects assigned. When employees feel that their company values their work, their productivity increases. That way, if you notice poor performance, struggling sales numbers, or customer satisfaction, it could be a sign your culture needs a reboot.
Employee Turnover Rates
Employee turnover is a culture metric that provides insight into how team members view their work environment. A 2017 study by SHRM found that the average turnover rate sat at around 18% nationwide. Many experts expect that number to climb to over 20% in 2022. The number one reason for departure? Workplace culture tied to poor management.
Strong cultures have substantial retention numbers, and high turnover rates can signify a struggling organizational culture. For example, suppose your new hire turnover rate exceeds your industry average or high-potential employees leave for the competition. In that case, you could have some severe problems with company values or company culture.
Number of Employee Referrals
Examining how often employees refer others to your organization is another excellent way of evaluating the need for a culture change. You can analyze your employee’s Net Promoter Score (eNPS), a valuable people analytics tool, to assess employee satisfaction and the likelihood of team members providing new referrals.
Having an inclusive workplace culture helps improve net promoter scores. Employees who feel valued, included, and celebrated are more likely to refer their workplace to their friends and family. A poor eNPS score could be a clear sign that company values may not support inclusion.
Teams who fail to communicate also fail to meet expectations. Communication metrics are a way to determine employee engagement and can illuminate issues with corporate culture. These metrics can include email open rates, read receipts, internet page visits, responses to communications, and the average length for a reply.
Engaged employees open and respond to communications in a timely manner. Those who feel that corporate culture doesn’t work for them will fail to respond to contact or take extra time to respond, leaving teams slower to react.
How to Measure Company Culture
Now that you have an idea of what metrics you can use to evaluate your organizational culture, you may be wondering how to take measurements to create these metrics. Through a combination of various strategies, you can create a complete picture of your workplace culture!
Quarterly, semi-annually, or pulse surveys can help determine employee satisfaction. HR professionals can design their own surveys or rely on anonymous third-party surveys to obtain responses from employees. Employee surveys can help you understand your eNPS scores and create a way for employees to voice their thoughts and opinions without fearing reprisal.
You can use surveys to evaluate aspects of employment, like how supportive management is, the workload level, the amount of recognition or reward, and growth opportunities.
Like employee engagement surveys, third-party tools can be an ideal way to obtain data on how employees feel about core values. While it can be scary to relinquish control over the evaluation process, third-party tools often provide greater detail, more resources, and improved anonymity of responses.
Valuable social media tools like LinkedIn and Glassdoor reviews are examples of third-party tools you can use to your advantage. Employees won’t hold back on their opinions, so it’s important to weigh every review thoroughly.
Focus groups are conversations with selected employees that help give a snapshot of what’s happening within the organization. Organizations with multiple locations, large numbers of departments, or wide-reaching geographical differences can benefit from focus groups, but only if you select a diverse group of employees to question.
You can have multiple focus groups to gain even greater knowledge about your workplace culture. But, to maximize the impact, it’s essential to keep the number of participants and groups at a manageable level. Too much information can cloud your results! Use the data, trends, patterns, and behaviors to formulate action plans that help improve corporate culture.
Another favorite tool of HR professionals is the exit survey. Exit surveys are the final formal interactions an organization has with an employee, and well-crafted exit surveys can reveal a lot about culture. The goal of these surveys is to find out what employees say about the organization as they leave. Unfortunately, exit surveys can be reactionary, especially if the employee leaves on bad terms.
Another drawback to exit interviews is the finality of the interaction. After obtaining the information from the employee, that person longer has an opportunity to benefit from the changes made within the organization.
Organizational Culture Assessment Instrument
Let’s say you’re looking for an initiative with a bit more emphasis on research. That’s where the Organizational Culture Assessment Instrument (OCAI) can help. OCAI is a research model designed by Kim Cameron and Robert Quinn at the University of Michigan and relies on the competing values framework. This framework provides a validated research tool to assess your organizational culture.
By using four values, the competing values framework can help you define your organizational culture. These four values include:
- Adhocracy Culture – A dynamic and entrepreneurial-based culture focused on creating.
- Clan Culture – A people-oriented system focused on collaboration and inclusion.
- Hierarchy Culture – A process-oriented approach that focuses on structure and control.
- Market Culture – A results-oriented approach that uses competition to reach goals
OCAI can help you define your company’s core values and structure a positive work environment without sacrificing performance or employee experience.
Measure and Improve Your Company Culture with Coach Diversity Institute
Company culture determines the outputs of your staff and how they engage with stakeholders and customers. Because organizational performance relates so heavily to culture measurements, it’s essential to understand the benchmarks of what makes a strong culture. These benchmarks can include employee turnover rates, eNPS ratings, productivity numbers, or a combination of several results!
While there are tools like the OCAI or third-party surveys, there’s no better way to eliminate biases, improve inclusion, and craft an unbeatable organizational culture than to partner with Coach Diversity Institute. Coach Diversity has detailed programs, such as cultural competency training, to help educate your leadership teams and frontline employees on the importance everyone makes in workplace culture.