How Organizational Culture Impacts Employee Engagement

 

A successful organization must have a culture that is based on a set of strongly held and shared beliefs that are supported by strategy and structure. As explained by Ashkanasy, Wilderom. and Peterson, (2000), these most important aspects could be anticipated when an organization has a strong culture: Employees understand how top management expects them to respond to any situation, and they understand that they will be rewarded for demonstrating the organization's values. A powerful culture is a common continues practice among the most successful businesses. Successful leaders live their cultures every day and go out of their way to communicate their cultural identities to employees and prospective new hires. They understand their values and are clear about their values and how those values define and govern their organizations. “In contrast, an ineffective culture can bring the organization and its leadership to their knees” (Schein, 2010). Employee disengagement, high turnover, poor customer relations, and lower profits are all examples of how the wrong culture can have a negative impact on the bottom line. “If an organization's culture improves overall performance, increases trust and cooperation, fewer disagreements, and more efficient decision-making while the culture will provide a strategic competitive advantage.” (Lucas and Kline, 2008)

“Organizational culture is defined as the underlying beliefs, assumptions, values, and ways of interacting that contribute to the unique social and psychological environment of a company” (Kumari and Singh, 2018). In The Business Dictionary. "Corporate culture," also identified as "workplace culture," and "business culture" is everything from the vision and mission, shared beliefs, rewards and recognition processes, communication and feedback style, language used, and written and unwritten rules and customs followed within the workplace can be considered culture. Simply put by Sun, (2008) organizational culture refers to "how we do things around here”. Because there is a direct relationship between organizational culture and employee engagement, this is a widely researched and debated topic in the HR community.

Qualities of Organizational culture and why it is important?

Every organization's culture is unique, and it's critical to preserve what makes your company stand out. However, “the cultures of high-performing organizations consistently reflect the outstanding characteristics of Alignment, Appreciation, Trust, Resilience, Teamwork, Communication, Integrity, Technology, and Phycological safety.” (Lubis and Hanum, 2020)

In the big picture, the culture of society determines how people behave, react and interact, and how fast society can grow as a community. “This definition is applicable to organizational culture as well. Hence maintaining a successful culture in the organization becomes of utmost importance because, but not limited to,” (Lubis and Hanum, 2020)

• ·       Helps create and maintain a unique identity for your organization
• ·       It gives people in the organization a sense of belonging and stability 
• ·       Organizational culture helps maintain high performers and valuable talent
• ·       Create a culture of engagement and increase employee productivity
• ·       It makes people happy and excited at work

 

What role does culture play in employee engagement?

“Employee engagement and culture are two of the most important workplace challenges, according to 87 percent of organizations” (Fidyah and Setiawati, 2020). The simple solution is to focus on improving organizational culture, and engagement part will then fall into place on its own. Every day, the culture that exists within the organization will have an organic impact on employee engagement. “How engaged employees are at work is determined by how happy and at ease, they are with the culture. “(Lubis and Hanum, 2020)

For example, there are some workplaces where communication has always been an issue. Employees are encouraged to communicate only with their direct managers and no one else in these offices, which have a very strict and rigid structure. When examined closely, such organizations typically have a high turnover rate, low productivity, and a lot of internal feuds and negativity. As a result, employee engagement is extremely low.

“Organizations that practice an engaged culture, on the other hand, see their employees as happy, productive, and open. As a result, such workplaces are able to retain and grow their top talent at a much faster rate.” (Lucas and Kline, 2008)

In a nutshell, a positive work culture fosters productivity, engagement, and a better employee experience. A hostile work culture, on the other hand, can reduce productivity, increase turnover, and make employees feel disconnected from their work and workplace.

Organizational culture's influence on performance

According to Mehta and Joshi, (2000), employees can easily understand what is expected of them when an organization promotes a culture of transparency, has clear expectations, provides continuous feedback, and offers appropriate recognition. “A culture that encourages employees to be open, honest, and self-sufficient fosters efficiency and cooperation within teams” (Awadh and Alyahya, 2013) Employee engagement activities and a well-defined organizational culture can work together to make employees feel valued and cherished within the organization, which improves their performance.

According to studies, organizational culture is a competitive advantage that most businesses ignore or are unaware of. However, “when used correctly, this can help you retain your top talent, improve performance and productivity, and develop self-reliant, independent, and responsible employees” (Kuswati, 2020). Working on the current organizational culture to create a culture of engagement will yield tangible results in terms of employee performance and productivity. McKenzie and Aitken, (2012) have explained that Agility, diversity, collaboration, Innovation, Respect, Performance, and Recognition are a few of the core values leading organizations to advocate to improve employee performance based on successful organizational culture. Hence it’s understood that employee engagement and organizational culture are inextricably linked. “The strength of your corporate culture determines your organization's success, and it is the foundation upon which your employees will stand for the duration of their employment” (Naidoo and Martins, 2014)

“A structured, transparent, and progressive work culture will improve employee engagement and, as a result, employee performance. It’s the responsibility of the leaders and managers to ensure and develop a high-performing workforce and growing workplace culture. Although changing an organization's culture and employee engagement strategies is a difficult task, it is unquestionably worthwhile to make the investment” (Naidoo and Martins, 2014)

 

 

References

·  Ashkanasy, N.M., Wilderom, C.P. and Peterson, M.F. eds., 2000. Handbook of organizational culture and climate. Sage.

·     Awadh, A.M. and Alyahya, M.S., 2013. Impact of organizational culture on employee performance. International review of management and business research, 2(1), p.168.

·       Fidyah, D.N. and Setiawati, T., 2020. Influence of organizational culture and employee engagement on employee performance: job satisfaction as intervening variable. Review of Integrative Business and Economics Research, 9(4), pp.64-81.

·  Kumari, N. and Singh, D., 2018. Impact of organizational culture on employee performance. Prabandhan: Indian Journal of Management, 11(6), pp.53-63.

·  Kuswati, Y., 2020. The influence of organizational culture on employee performance. Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 3(1), pp.296-302.

·       Lucas, C. and Kline, T. (2008), "Understanding the influence of organizational culture and group dynamics on organizational change and learning", The Learning Organization, Vol. 15 No. 3, pp. 277-287. https://doi.org/10.1108/09696470810868882

·       Lubis, F.R. and Hanum, F., 2020, December. Organizational culture. In 2nd Yogyakarta international conference on educational management/administration and pedagogy (YICEMAP 2019). Atlantis Press (pp. 88-91).

·       Mehta, Y. and Joshi, S., 2000. Impact of workplace spirituality on organization culture through improved employee productivity. Communication Studies, 51(3).

·       McKenzie, J. and Aitken, P., 2012. Learning to lead the knowledgeable organization: Developing leadership agility. Strategic HR Review.

·       Naidoo, P. and Martins, N., 2014. Investigating the relationship between organizational culture and work engagement. Problems and perspectives in Management, (12, Iss. 4 (spec. iss.)), pp.433-441.

·       Schein, E.H., 2010. Organizational culture and leadership (Vol. 2). John Wiley & Sons.

·       Sun, S., 2008. Organizational culture and its themes. International Journal of Business and Management, 3(12), pp.137-141.