How Culture and Employee Engagement are Linked & Why It Matters

Culture and Employee Engagement Are Inextricably Linked
Assessing organizational cultures reveals a clear truth: corporate culture and employee engagement are two sides of the same coin. Neither is fully effective without the other. When aligned, they form a powerful foundation for higher performance. If your goal is sustainable business results, investing in both culture and engagement is where you should begin.

Organizational Culture Defined
Organizational culture is the company-wide lens through which work actually gets done. While different teams or regions may develop their own subcultures, the overarching culture reflects “The Way” the organization operates on a day-to-day basis.

It is composed of the collective behaviors, business practices, and routines that shape how the company functions. Beyond formal policies, organizational culture encompasses the spoken and unspoken values, beliefs, and assumptions that guide decisions and actions. In essence, it defines the team norms — what employees do, how they behave, and what they truly believe about the way work gets accomplished.

Culture and Performance
Organizational culture isn’t just a “soft” concept—it drives real business outcomes. Our research on organizational alignment shows that culture accounts for 40% of the gap between high- and low-performing organizations in key metrics, including profitable revenue growth, customer retention, leadership effectiveness, and employee engagement. Simply put, the way a company operates at its core significantly shapes its performance.

Employee Engagement Is About Organizational Health
We believe that measuring and improving employee engagement is a powerful strategic 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 engagement certainly provides a perspective about the impact organizational health has on employee’s attitudes toward their job, we do not believe that employee engagement surveys fully measure cultural effectiveness. We see high levels of employee engagement as an outcome of a healthy organizational culture, not the cause.

Employee Engagement and Performance
Similar to culture, employee engagement isn’t just a feel-good metric — it directly impacts business results. Highly engaged employees are, on average, 18% more productive, drive 12% higher customer satisfaction, and contribute to 51% lower voluntary turnover. Engagement is a critical strategic lever for performance and long-term organizational success.

How Does Culture and Employee Engagement Fit Together?

Through our work with clients in the field of high performance cultures, we have found that powerful organizational cultures also have a highly engaged workforce. And we have identified three cultural components that have the highest correlation to higher levels of employee engagement:

1. Alignment with Goals
High performance companies ensure that their culture is aligned with their strategic priorities.  You will know alignment with goals 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
• Know how they fit into the organization’s future plans

2. Trust in Senior Leaders
Trust is the foundation for any healthy organizational culture.  You will know healthy levels of leadership trust are 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
• Feel the leaders are honest, trustworthy, and demonstrate integrity

3. Feeling Valued
When employees feel valued, their engagement and productivity rise, and they are motivated to do their jobs better.  You will know employees feel valued enough when they:

• 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
• Believe that leaders are committed to making it a great place to work

The Bottom Line
A culture that aligns with your strategy, combined with fully engaged employees, creates a powerful, high-performing organization—one that is difficult for competitors to replicate and drives sustainable success.

To learn more about culture and employee engagement, download the 3 Levels of Culture Leaders Must Get Right

by Tristam Brown: CEO

Tristam Brown is an executive business consultant and organizational development expert with more than three decades of experience helping organizations accelerate performance, build high-impact teams, and turn strategy into execution. As CEO of LSA Global, he works with leaders to get and stay aligned™ through research-backed strategy, culture, and talent solutions that produce measurable, business-critical results. See full bio.