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Home / Blog / Impact of Work Culture on Business Performance?

Impact of Work Culture on Business Performance?

11 Feb 2020

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Impact of Work Culture

Impact of Work Culture on Business Performance?

An ongoing report from the researchers of the University of Warwick, by Entrepreneur magazine, revealed that happiness makes an individual 12% more productive. Said by the authors of the study, Dr. Daniel Sgroi and Professor Andrew Oswald from the Economics department at the University of Warwick:

“Companies like Google have invested more in employee support and employee satisfaction has risen as a result. For Google, it rose by 37%... Under scientifically controlled conditions, making workers happier really pays off.” Added Dr. Sgroi: “The driving force seems to be that happier workers use the time they have more effectively, increasing the pace at which they can work without sacrificing quality.”

How Work Culture Affect Performance?

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What adds to this happiness? There can be numerous components – from family life to the favorite activities, even writing, music, or movies – yet work culture can also play a significant role in employee happiness. Work culture is an aggregate term for a bunch of the most significant factors that are under a business' control, and as such, it is exceptionally relevant for each manager. 

The underpinnings of a stable organization culture incorporate components identified with employees' physical health, mental clarity, emotional well-being, and can help give their work a greater sense of importance. Work culture is established in the values and beliefs that a company sets up. When these are communicated all through the company, they can help support employee engagement and inspiration.

How Does Culture Affect Employee Engagement?

“Culture is the character and personality of your organization. It's what makes your organization unique and is the sum of its values, traditions, beliefs, interactions, behaviors, and attitudes.” - ERC

This post discusses three impacts of organizational culture on employees:

1. Work Culture Impact on Happiness of Employees

As the economy keeps on recovering from the recession market, the job market is demonstrating consistent improvement. That implies organizations could begin to see more turnover, as employees look for greener fields. 

Nonetheless, a positive organizational culture can guarantee that the workforce stays happy with their jobs assigned to them and loyal to the company. This can be extremely valuable in the competitive hiring environment. Individuals are considerably keener on signing on (and staying) with an organizational culture that promotes adaptability, bolsters employee development, and offers work-life balance. 

Satisfying employee satisfaction through a stable and steady organization culture can diminish enrolling, hiring, and training costs while improving their morale and increasing profits.

2. Work Culture Impact On Employees Performance

How does organizational culture affect individual performance? To give the most significant competitive advantage, the company culture must be stable, generally communicated, and strengthened. Everybody must share their values and beliefs.

In a robust work culture, the employee feels esteemed. They probably appreciate some control over their jobs, rather than feeling weak. Regardless of whether it's working from home, picking their projects, or evaluating another job, employees that feel esteemed and can settle on choices to achieve a more significant level of performance. 

Stable and robust organization culture additionally gives employees chances to grow. Offering career development programs, promotions, or extra training can keep workers inspired – which, thus, improves the company's performance. When everybody is in it together, they will all invest the additional energy to accomplish organizational goals.

3. Work Culture Impact On Employee Engagement

Work Culture Survey

At this point, we've clarified that robust and stable organizational culture has a significant impact on the company, along with employee performance and satisfaction. Presently how about we explore the numerous ways that company culture can affect employee engagement:

  • Communication: In organizations with excellent communication practices, employees know their opinions, and the ideas are always welcome. When workers feel heard, they don't carry the resentment that can prompt absenteeism, negative morale, and finally termination. 
  • Safety: Organizations that worth employees accentuate safety. A culture of safety gets instilled, and employees are progressively careful and engaged when performing out their duties. 
  • Collaboration: Rather than a "us versus them" approach, collaborative organizations promote self-sufficiency, essential leadership, cooperation, and teamwork. 
  • Growth: Cultures that cultivate employee improvement and development give workers something to progress in the direction of and anticipate. Such cultures prevent boredom and job stagnation while keeping things energizing and refreshing.
  • Employee engagement is an immediate result of high-performance organization culture. Why? Since high-performance cultures unmistakably layout behaviors and norms that are healthy and supportive. Workforce unmistakably understands their culture and what is anticipated from them. They feel involved. They feel connected. They feel supported. Furthermore, in this manner, they think adequately engaged.

How Work Culture impact Business performance?

1. Increase In Productivity

Research shows that company culture affects everything from employee happiness to your company’s bottom line. Above we discussed how work culture affects employees’ performance, now we will discuss the impact of culture on a company’s performance and innovation.

If the individuals feel that your organization culture represents them, they'll have the option to build up a positive relationship with your working environment. If they relate to your values, the employees are empowered to do their best work and are listened to and respected; at that point, they'll have the option to build up trust in your business.

This trust and proper alignment are essential building blocks for happy and engaged workers. Also, we, as a whole, know that happy and engaged employees are more productive.

Researcher Dr. Gillespie stated in his study that the impact of company culture on bottom-line results takes time.

2. Improved Business Performance

“Strong corporate cultures that facilitate adaptation to a changing world are associated with strong financial results.”- John Kotter

The impact of influential organizational culture stretches out beyond the happiness of the employees. Excellent company culture will improve performance, productivity, and client experience. If your culture isn't serving you, it's a great opportunity to take care of business. Changing organizational culture might be simpler than you think

3. Support Business Goals

A research paper which is interviewed by 1348 North American leaders at Duke University and Columbia University “Corporate Culture: Evidence from the Field”, listed some findings that are stated below:

“Executives highlight in the research that culture can circumvent mistakes in a way that other executive actions, formal institutions, or corporate assets cannot. Many executives believe culture contributes more to firm value than strategy does. For example, a company performs better with a strong culture and weak strategy than the other way around.”

This is because whether your system isn't great, your strong culture will assist with keeping everybody walking to the beat of a similar drum. Individuals will remain on track, striving towards the overall company's goal.

So what are your following steps toward company culture? Discover what parts of your organizational culture are generally imperative to your people, and think about performing culture audit. You will likely find what employees value most and bolster that. Congrats, you're one step up for creating a phenomenal working environment.

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