How Corporate Culture and Employee Engagement are Linked

two men are pushing giant puzzle pieces together

We believe that organizational culture and employee engagement are two pieces of a puzzle that fit perfectly together and are not complete without the other. That is how closely they are linked.

Organizational Culture
Let’s start with organizational culture. While different pockets of culture can exist in various teams and geographies within a company, we think of organizational culture as a company-wide construct. It is “The Way” things truly get done on a day-to-day basis. Organizational culture is made up of the behaviors and practices of the company as a whole. It includes the known and unspoken values, beliefs and assumptions that underlie how and why things get done. Organizational culture represents the norms that define how employees behave and what they believe.

And, in terms of performance, organizational culture matters. Our organizational alignment research found that corporate culture accounts for up to 40% of the difference between high and low performing organizations.

Employee Engagement
We believe that measuring and improving engagement is a powerful talent management tool to help attract, develop, engage and retain top talent. We think of employee engagement as looking at an individual employee’s level of advocacy, discretionary effort and intent to stay. Employee engagement surveys typically help leaders and managers understand how their individual employees feel about their work situation. And while it certainly provides a perspective about the impact that the overall culture has on employee’s attitudes toward their job, we do not believe engagement fully measures cultural effectiveness. We see high levels of employee engagement as an outcome of a healthy organizational culture, not the cause.

And, like culture, employee engagement also matters in terms of business performance. On average, highly engaged employees create 18% greater productivity, 12% higher customer satisfaction and 51% less voluntary turnover.

How Do They Fit Together?
Through our work with clients in the field of high performance both in terms of organizational culture and employee engagement, we have found that organizations with stronger cultures also have a highly engaged workforce. And three cultural components have the highest correlation to higher levels of employee engagement:

  • Alignment with Goals – You will know this alignment is happening when employees understand the company’s plans for future success, believe the organization will be successful in the future, can articulate how their job helps the organization achieve success, and know how they fit into the organization’s future plans.
  • Trust in Senior Leaders – You will know this is happening when employees trust the leaders are setting the right course, believe the senior leadership team is up for the task of leading the company to future success, and believe the leaders are honest, trustworthy and demonstrate integrity.
  • Feeling Valued – You will know this is happening when employees see meaningful investments being made to make employees more successful, feel valued as the company’s most important resource, are rewarded and recognized proportionately for contributing to the organization’s success, and believe that leaders are committed to making it a great place to work.

The Bottom Line
To improve performance, start with a compelling, believable and implementable strategy that is clear enough to guide an individual’s work. Strategic clarity provides the solid foundation from which everything else flows. Strategic ambiguity creates ineffectiveness and inefficiencies.

Once your business strategy is clear enough to act and people are committed to it, it is time to shape and align your corporate culture to purposefully drive your strategy forward. Smart leaders invest the time and effort to create the environment necessary for their employees to perform at their peak.

Once your strategy is clear enough to act and you have aligned your high performance culture for that strategy, it is time to attract, develop, engage and retain talent that fits your unique situation. This is where employee engagement should be understood within the context of your organizational culture, business strategy and talent management plan. When you have a compelling direction, a culture that works and employees who are fully engaged, you have a winning combination that is hard for your competitors to replicate.

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We value our relationship with LSA Global. We came to LSA because we wanted to improve overall behavioral based interviewing capabilities of our managers to increase the probability of both hiring top talent and future leaders. LSA designed a highly customized solution for our business and culture. We are currently rolling out this solution to our leaders. I would highly recommend LSA Global as a top quality resource.

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