Rarely does one leave a conference on benefits management and not hear the term "company culture" tossed about in one or more sessions. Yet getting one's hands around an intangible concept can be a challenge.
"Maybe the best definition of company culture is what everyone does when no one is looking," says Max Caldwell, a managing director at Towers Watson.
No matter how a company defines or measures company culture, new research by Randstad U.S., a provider of HR and staffing services, suggests that employers need to broaden their view of the concept of company culture, making it an instrumental part of their core business strategy.
Linchpin to success
Company culture is a pattern of norm behaviors, values and assumptions about how work is done within an organization. It embodies all of the things in a corporate society that drives how people think and ultimately how they behave.
"When people talk about a high-performing culture, we tell them they are really talking about a high-engagement culture. Engagement is the best measure of company culture, because you can link the level of engagement with the level of financial performance," says Caldwell.
Towers Watson's research shows that companies with a high engagement level typically perform better financially than those with a low level.
"When you tell executives that there is correlation between company culture and corporate performance, you get their attention because they now have a business metric. It becomes something that is specific," he adds.
Once the C-suite realizes the term "company culture" isn't just cliche corporate-speak, executives likely will start to ask what they can do to improve engagement levels. Then, HR/benefit professionals have an opening to move the culture discussion from intangible to tangible.
"Benefits practitioners are right in the middle of the conversation on company culture, because many of their initiatives drive to create a work environment that improves health and productivity," Caldwell explains.
That's why it's critical for them to be able to explain to executives that company culture is a true business metric and not just another touchy-feely idea. But for benefits professionals, company culture is the linchpin to executing a successful business strategy around benefits programs.
With company culture, "you want to measure the degree [to which] workers are fully engaged in their jobs and whether they view management as being supportive and the workplace as being a healthy environment," Caldwell says.
Culture of health
Culture is about changing or establishing behaviors, rather than simply talking about the term "company culture," says Jennifer Bruno, senior director of wellness and prevention at Johnson & Johnson's global health services.
To help foster and reinforce its culture of health, the company incorporates success stories about its health programs during its quarterly town hall meeting on financial performance. "If you are sharing with your employees the business's success from a financial standpoint, then it makes logical sense to share the success of the business from a health standpoint," Bruno says.
Moreover, in-house meetings often start with a health or safety tip and are supplied with healthy food and water. Lengthy corporate gatherings also allow workers the opportunity to take a break and get up and move around.
The manufacturer of consumer health care products and services, which employs about 38,714 workers in the U.S., aspires across all of its businesses to instill a company credo of "this is the way we do business."
"A culture of health is really integrated into the way we do business. We want to make sure that the environment around our employees supports their ability to sustain and make healthy lifestyle choices," Bruno says.
Show and tell
The type of benefits employers add or take away sends a message to workers about company culture, says Ken Oehler, Aon Hewitt senior vice president and engagement and organization effectiveness service line leader.
For example, an employer that adopts a consumer-driven health plan is sending a message around engagement, because offering a CDHP basically "says you have to take a more active role in how you manage the use of health benefits," Oehler explains.
A CDHP also speaks to company culture by sending the message the organization is not a paternalistic one and that employees are expected to become smart consumers about their physical and financial health.
On the opposite side, offering a defined benefit plan sends a message to workers that the company cares about your retirement security and "wants you to be here for the long haul," Oehler says, but also can foster a culture of paternalism or entitlement.
Touchy-feely no more
The Randstad U.S. findings on company culture and workers' perceptions of it make clear that employers can no longer afford to overlook company culture as a key corporate objective.
For example, 35% of employees report company culture has the greatest impact on morale, while 22% believe it has a major effect on productivity, and 23% of younger workers (ages 18 to 34) say it plays the biggest role in building job satisfaction. The online survey, conducted in August 2010, represents a national sample of 1,008 adults aged 18 and older.
"Companies that will perform well will nurture the factors that make their employees feel happier and engaged at work, more connected to overall results and more motivated to make a strong contribution," says Dr. Eileen Habelow, Randstad's senior vice president of organizational development.
"Going forward, companies can't ignore culture. Rather, it should be addressed as a critical component of their overall business strategy," she adds.
Focusing on company culture in a post-recession environment is a perfect way to rekindle corporate performance. About 60% of workers believe that the recession and a slow economic recovery have had a negative impact on company culture, Randstad finds. They admit that layoffs, reduced benefits and wages and low morale have heightened feelings of disengagement from their employers.
Randstad concludes that companies with strong cultures focus on:
* Building employee morale through incentive and training programs.
* Clearly defining values through mission and vision statements.
* Putting strong leaders in place that set the tone and empower others.
* Encouraging better relationships with both employees and customers.
In the survey, employee attitudes (69%) and effective management (64%) ranked as the two top elements critical to company culture. Other key elements include:
* Strong trust relationships (57%).
* Customer focus (55%).
* High accountability standards (50%).
* Commitment to training and development (47%).
* Compensation and reward programs (45%).
* Support for innovation and new ideas (42%).
* Useful resources, technology and tools (41%).
* Emphasis on recruiting and retaining outstanding employees (40%).
Randstad also cites four categories of company culture, from the book "Corporate Cultures: The Rites and Rituals of Corporate Life" by Terrence Deal and Allan Kennedy:
1. All-hands-on-deck culture. Everyone works as a team no matter your title or position; the focus here is working together to get projects done.
2. Process culture. It's all about data, grids and forms; the culture lacks creativity, but focuses heavily on the procedure and bureaucracy.
3. Work hard/play hard culture. Fun and action are the rule here - employees take pride in work and its quality, but don't miss opportunities to enjoy time with co-workers.
4. Tough-guy macho culture. The focus here is on getting the job done. Feedback and constructive criticism reign, and employees are expected to know what they're doing with little or no direction.
The Randstad survey found that 38% of workers label their current work culture as "all hands on deck," while 18% say their company has a "process" culture; 16% work in a "work hard/play hard" culture, and 12% in a "tough-guy macho" culture.
Sixteen percent of survey participants say that none of the categories describes their company culture.
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