7
min read
A guide: understanding and improving your organizational culture along with three examples of highly successful organizational cultures to take inspiration from
7
min read
Have you wondered what an organizational culture actually means? Apart from the vague descriptions you might have read online about how employees interact, organizational culture is a concept that includes a lot more than just how employees interact and operate.
Speaking in terms of a firm, the organizational culture would comprise the firm’s basic personality, or the essence of how its employees communicate and carry out various processes required to achieve collective goals. It is, nevertheless, an enigmatically complicated entity that keeps surviving and evolving as a result of shifts in leadership, strategy, and several other factors.
It can also be defined as the self-sustaining pattern of behaviour that determines how things are done in an organization.
Culture is something that is difficult to define, yet everyone recognises it when they experience it. Similar to how you can get a sense of someone's personality by looking at them, you can determine the culture of an organization by looking at the arrangement of furniture, what they brag about, what members wear, and so on.
Members of an organisation tend to pick up on the culture of that organisation sooner than one can ever imagine.
Developing a winning corporate culture within your organization boosts recruitment efforts and increases retention rates. The types of candidates you attract and the personnel you keep have a direct impact on your company culture.
And so, a positive corporate culture is just what you would need to attract the best job prospects and keep them on board as employees. It takes a lot of time and effort to build a winning company culture that reflects your beliefs and matches with your entire objective. It's a difficult, however not impossible task, and here’s why having a good organizational culture is so important:
Employee engagement is defined as an employee's level of interest in, motivation for, and connection to their work and company. And so, it's no surprise that high levels of employee engagement are associated with winning business cultures.
Strong corporate cultures provide employees with a reason to stick around and to do so with zeal. Employees with a winning culture establish strong bonds with their peers, company, and position, improving their work experience and increasing their engagement.
Your company's values and beliefs, as well as the underlying assumptions held by employees in your organization, form the foundation of your culture.
In a nutshell, your company's basic principles are brought to life through your organisational culture.
Your organization’s culture has a bigger impact than you know, on employee satisfaction and engagement. If your corporate culture values teamwork but a person prefers to work alone, they are unlikely to be satisfied at your organisation.
While you won't be able to please everyone, you may attempt to create a company culture that balances your employees' individual requirements while also aligning with your organization's objectives. Thus, your staff will show their appreciation by increasing their productivity and performance.
Studies show that organizations that provide a favourable candidate experience enhance the quality of their hiring by 70%. You can't hide your company culture from job seekers; they'll be able to get a sense of it almost instantly and use it to make a decision. Thus it is important to prioritize developing a corporate culture that promotes a strong and compelling brand image to prevent losing top prospects' attention.
In most cases, leaders do have a strong awareness of their organization's culture. However, they simply haven't made that sense conscious enough to be able to learn from and lead within the culture effectively.
Diverse people within the same organisation may have different perspectives about the company's culture. This is especially true when it comes to the perspectives of the organization's top and bottom levels.
Here are four elements to understanding your company's culture, as well as the criteria for determining whether it needs to change.
Every firm, whether consciously or unintentionally created, has a culture. This culture comprises the set of values, goals, ethics, and expectations that guide and affect employee conduct.
If you want to create a certain type of culture, it's not enough to just say so. To build a roadmap to achieve those changes, you must first figure out what present habits need to change. It is thus critical to first establish your current corporate culture before attempting to change it.
It is crucial to analyze your company's priorities if you want to learn more about your culture. These objectives and initiatives show what your company values and what it does not ,both explicitly and implicitly.
The behaviours that are encouraged, tolerated, and discouraged in your workplace make up your company culture. It's best to go straight to the source, i.e., your employees. This will help you figure out what kind of people make up your organization. Consider ways in which you can gather input on which behaviours are now beneficial to the company and which should be avoided or altered in order to elevate your firm.
SUPER TIP - If you're interested in engaging with your team to understand your knowledge of your organisation's culture, here's something to help you start with.
Every organization is different, and all of them have a unique culture to organize groups of people. Adopting a culture that matches your people and your goals- is the only right way out to understanding and developing an organizational culture.
Now when it comes to types, there are over five to eight types of organizational culture, out of which only a few are amongst the popular ones. They are as follows:
A clan culture is people-focused in the sense that the company feels like one big happy family. This culture follows the motto of being together throughout everything. Clan culture comprises a highly collaborative work environment that is super flexible where every individual is valued and communication is a top priority.
Market culture mainly believes in competition and growth, where losing isn't considered as an option. These are organisations that are more concerned with external success, i.e., profitability than with internal contentment.
Everything is measured against the bottom line; each position has a goal that is aligned with the company's overall goal, and employees and leadership roles are frequently separated by several degrees.
Companies with hierarchical cultures stick to the traditional business structure and value quality over quantity. These are businesses that place a strong emphasis on internal organisation, with a clear chain of command and various management tiers that separate employees from executives. Employees are typically required to obey a dress code in addition to a rigid structure. Hierarchy cultures have a set of rules to follow, making them predictable and risk-averse.
Adhocracy cultures are rooted in innovation and risk taking and go by the motto- risk it to get the biscuit. These are the businesses that are at the forefront of their fields, looking to produce the next great thing before anybody else has even begun to ask the appropriate questions. They must take risks in order to do so. Individuality is valued in adhocracy cultures because employees are encouraged to think creatively and contribute their ideas.
A good company culture not only consists of one or a combination of the above mentioned types, but should also be something that stands out from one’s competition.
It is not something that can be achieved within a snap of a finger, but takes a considerable amount of time, understanding and planning to emerge as an organization with a great culture where employees are productive, happy and satisfied.
Here are a few examples of organizations with commendable culture to help you take inspiration from:
Google is known for being an excellent employer that has pioneered many of the perks and advantages that startups are now known for. Google's employees are a hardworking, talented, and an enthusiastic bunch.
For its employees, Google's corporate culture is a treasure trove of perks and bonuses. Free meals, employee vacations and parties, cash bonuses, open speeches by high-level executives, employee recognition, gyms, and a pet-friendly atmosphere are all available at Google. It's no surprise that Google's company culture is the gold standard by which all other IT firms are judged.
The video conferencing technology company -Zoom is known for its amazing culture, and with good reason: their emphasis on people. The business has a reputation for genuinely caring about its employees. Zoom even encourages employees to bring loved ones to work so that teammates and coworkers can meet the individuals who work behind the scenes, who inspire them, and for whom they work.
Netflix's corporate culture is based on the principle of "people over process." They have a set of ideals in which they strongly believe and which they want their employees to live out in their job.
The foundation of the organisation is a strong sense of loyalty and ownership. Their goal is to pervade the workforce with their values and philosophies in order to motivate and urge people to support innovation in order to achieve higher growth.
Zappos' culture is now well-established and well-known. They concentrate on hiring to keep things going. The goal of the hiring process is to discover people who share the company's values. Zappos devotes a significant amount of time and resources to employee team building and culture promotion. They want every employee to embody the company's principles.Customers can even tell that Zappos staff are happy.
DHL is unique in how it benefits from its dynamic, multicultural environment. With a variety of programmes, such as the unique integrated learning platform that fosters talent development, the organisation looks after its employees throughout their careers.
Another pillar is workplace wellness, which includes annual events and long-term activities to protect employee health.
LinkedIn was even on Glassdoor's 2020 Best Places to Work list, but two characteristics aren't mentioned enough: devotion to people and a focus on five principles: transformation, integrity, collaboration, humour, and results.
Hubspot has appeared on numerous best-of lists. It does not end here. The marketing, sales, and service software firm is ranked first on this list of the finest places to work. The explanation for this is simple: Hubspot's company culture revolves upon its people.
Warby Parker has been creating and selling prescription glasses online for over a decade now. Warby Parker's company culture inspires "culture crushes," run by a team dedicated to culture, making it one amongst the several reasons for the company's success. Warby Parker provides its employees with a positive work environment by organising enjoyable meals, events, and programmes, always ensuring that there is an impending event to look forward to.
How does a corporation maintain such a high level of creativity and excellence at the same time? Well. we would never really know. At Pixar, everything is a work of art and employees are encouraged to be their true “creative” self. The essential ideals of the animation studio inspire the entire culture.
Pixar believes that if you want to be creative, you must be innovative in everything you do. This can even be seen throughout Pixar, especially in the design of the company's "cubicles," which are sometimes shaped like cute little huts.
Twitter employees can't get enough of the company's culture! Rooftop meetings, amicable coworkers, and a team-oriented workplace where everyone is motivated by the company's goals have prompted this acclaim.
It's impossible to beat having team members that are pleasant and friendly to one another, as well as excellent at and enthusiastic about what they do. There is no programme, activity, or set of regulations that can compare to having happy and pleased employees who believe their work counts.
You would notice that most of the organizations read about a while ago, have similar perks and bonuses, but keep in mind that these do not entirely determine your organization’s culture. The way employees are treated, as well as the level of ownership and trust they are given, is the key aspect of any and every company culture.
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The right compensation management practices and policies can make or break your employee experience. Of course, there is merit in linking compensation and performance to drive organizational success, it can lead to several questions and implementation problems as well.
Read on to get all your compensation management related questions answered.
Let’s start with the very basic question of why fair compensation is important and the merits it brings along. It is no surprise that if you are paid more and are compensated according to your efforts, you are likely to give in your 100% and stay with an organization longer. However, there are other factors that support fair compensation:
Thus, fair compensation as a part of compensation linked performance management has the potential to facilitate better employee outcomes such as engagement, experience and performance.
To make compensation fair and inclusive in all aspects, it needs to have a clear foundation. Most organizations have relied on performance reviews as a way of reflecting on performance as a means of compensation decisions. However, there are several competing views both for and against tying compensation to performance reviews.
Clearly, there are both sides to the story.
The most favorable outcome will be to keep performance as one of the parameters for compensation, but not the sole foundation.
Additionally, as one of the best practices, performance reviews can be conducted on a regular basis, where some are only developmental in nature and others can be tied to compensation management.
As discussed, focusing only on performance reviews for compensation management needs a relook. Working with growing organizations, we have curated a list of the top five performance and compensation management practices you can leverage:
Ensure that your compensation structure aligns with the market trends so your employees don’t feel underpaid and leave.
Provide complete transparency and clarity to your employees on what constitutes high levels of performance and what it will take to earn a raise or appraisal.
Have specific, well defined and measurable criteria for the compensation strategy to ensure that there is complete transparency.
Salary in hand or the pay check your employees receive is accompanied by a range of benefits that are a part of the compensation structure and cost to the company, but are often overlooked by employees. Make sure they are widely communicated.
Ensure that there is a base pay range for every role and profile with variable additions based on candidate competencies.
The idea of fair compensation and linking compensation and performance management, leads to a very interesting concept of distributive justice. On a broad level, distributive justice essentially focuses on ensuring that the compensation received by employees is fair and equitable and is based on objective and rational grounds which are uniform for all. Here are a few ways to ensure distributive justice:
Measure potential and market value of the employee in addition to experience and expertise to ensure distributive justice for high potential employees
Another interesting component of compensation and performance management that you must acquaint yourself with is pay transparency. Essentially pay transparency refers to how openly or freely employees within an organization can discuss their compensation with others.
This is not only limited to the check they take home but other perks and benefits they are entitled to. Invariably, many platforms today also enable individuals to anonymously share their salaries online and get insights from others doing the same. However, there are diverse views on when it comes to pay transparency for an organization.
Those who advocate for pay transparency believe that it can enable large scale impact for the organization across performance management.
However, there is a flip side to pay transparency too with some common pitfalls that need to be addressed proactively.
In the last section of this article, we will focus on how managers play an integral role in compensation and performance management and the best practices to guide managers to have effective compensation conversations with their team members.
Almost 58% organizations do not train managers on pay communications
This startling statistic clearly highlights how despite the apparent importance of compensation management, the focus on ensuring a seamless process is rather limited. However, organizations today can play a leading role in enabling their managers to have better pay communication and conversations by following these tips:
It is quite evident that compensation and performance management are intrinsically interlinked and if leveraged well, compensation has great potential to not only drive performance, but also facilitate engagement, retention and much more.
However, to ensure the same, you need to have a very structured, transparent and fair compensation strategy and policy. Furthermore, you must, don’t forget to invest in training your managers to bridge any gaps and constantly gauge and address employee pulse — to ensure fair compensation for all.
10 tips for managers to effectively conduct performance reviews
How often should you conduct performance reviews?
How to use competency framework as a talent management strategy
Talent development is critical for growing organizations which see the workforce as their biggest asset. Focus on developing their talent stack not only leads to a pleasant employee experience, it also augments the overall performance and productivity for an organization.
While you may come across many ways to facilitate talent development, leveraging the competency framework can help you move the needle very quickly.
Let's see how.
Before moving directly to how you can implement the competency framework, let’s quickly understand the 5 stages of talent development.
The first stage involves planning for your talent needs based on your organizational priorities and creating the position profile based on the skills, attitudes and other competencies.
Based on the position profile, you need to start attracting talent for the position. You can do so by spreading the word in the right networks, through job portal platforms, etc. The objective is to ensure that you are reaching out to the right network. You can also explore the right candidate for the position internally to considerably save hiring and training costs.
Once you have identified the right person, the next stage of talent development is extending the offer to the person after a thorough background check as well as a competency and expectation match. It also requires creating personalized onboarding plans for the first 30-60-90 days of the candidate’s journey within the organization. Read our guide to employee onboarding to learn more about onboarding do’s and don’ts.
The main focus of talent development starts with providing the right development and learning opportunities to your workforce. This can involve upskilling for both technical and soft skills, leadership building or any development intervention based on the need of the role and position.
Read: How to create employee development plan based on performance history
Finally, talent development involves undertaking initiatives to retain your talent. While learning opportunities are important, facilitating engagement, wellness, motivation, etc. all contribute to employee retention.
If you are wondering how the competency framework aligns with talent development, you need to start by decoding what the framework actually stands for.
Put simply, a competency framework is a set of behaviors, skills, abilities and attributes that an organization considers imperative for creating a high performance culture.
The competency framework can be implemented at all stages of the talent development or the employee lifecycle within an organization. The idea is to ensure that certain core competencies are kept at the heart of the decision making that in any way impact the workforce.
Competency framework based talent development is very important for employee retention. Talent development practices when undertaken effectively have the potential to encourage team members to stay with the organization for long and at the same time become ambassadors to help attract high quality peers.
Here are the top reasons why competency framework based talent development matters:
Now that we have covered the basics of talent development and competency framework, let’s understand how leveraging the latter to advance the former can create a far reaching impact for organizations.
The first step is to create a competency framework which involves identifying the key competencies which will be instrumental in guiding all decisions around talent development. Depending on the nature of your organization, there can be categories within the competency framework that you seek to focus on. Your competency framework should focus on behaviors, skills and attributes which are critical for performance and overall success. The following steps can help you create a competency framework for talent development:
The responsibility of creating the competency framework is collective. It starts with involving the executive leadership to ensure alignment with the vision, people managers to ensure they are ideal for the culture you are trying to build and functional managers to ensure inclusion of right competencies for each role and position. Furthermore, involving those on the ground can be fruitful as they have the best idea of what competencies are critical and others which are good to have.
Once the competency framework for talent development is ready, the next step is to align it with your recruitment process to ensure precise and effective hiring. There are a few steps along the way:
The onus of implementing the competency framework during selection lies primarily with the HR team and recruiters who assess the candidates with different tests and assessments. Team managers and leaders also play a role in assessing functional competencies and fit.
Irrespective of whether an employee is onboarded before or after you have implemented the competency framework for recruitment, you need to ensure competency based performance management and development opportunities.
From a talent development perspective, the focus of the competency framework should equally be on developing employees for their next or subsequent role based on the specific competencies for the same.
The onus of aligning performance and development with the competency framework lies with team managers as they are best able to determine the performance gaps. Furthermore, employees with their managers can identify competency gaps for better performance and focus on the right learning and development interventions to bridge the same.
Finally, the competency framework must also impact the subsequent rungs of talent development where an employee moves up the ladder from one position to the next. Based on the organizational matrix and competencies for each level, you need to identify key attributes that differentiate one level from another and ensure the same is communicated to your employees.
You should:
In a nutshell, it is quite evident that the competency framework can inform and advance every stage of talent development for fast growing organizations. If you implement such a framework across the employee lifecycle, you will significantly reduce your chances of a wrong hire and will be able to nurture a workforce that aligns on the vision, goals and overall organizational culture.
A clear competency based talent development approach can help you achieve high levels of performance which is observable and measurable.
While most people managers are able to create a business case for setting OKRs as well as for the adoption of an OKR software by leveraging industry benchmarks and best practices, there is a need to explicitly decode the return on investment of using an OKR tool as well.
Unless they are able to clearly illustrate how the return achieved using a goal management software is greater than the investment, it becomes difficult to sustain the adoption and get long-term leadership buy-in.
Continue reading to strengthen your business case on the same.
Let’s quickly understand how the OKR framework is integral for an organization, especially high growth companies. Most fast growing organizations have competing priorities they need to focus on with limited resources at hand.
Therefore, simply setting goals by adopting a top-down approach without supporting parameters can lead to confusion and incompetence. OKRs help drive away this ambiguity by linking measurable key results for each objective and facilitating a collaborative approach to achieving goals.
Here are the top three benefits of implementing OKRs in an effective manner:
OKRs enable employees and leadership to have a very clear focus on what needs to be accomplished and what work is out of scope. The idea is to have complete clarity on —
The last part is extremely important as it helps create a sharp focus and set priorities straight.
93% of employees don’t really understand what their organization is trying to accomplish in order to align with their own work.
This illustrates that there is a big absence of clarity and focus amongst employees when it comes to what needs to be accomplished, which stands in the way of creating a high performance culture. Therefore, OKRs can help reduce such uncertainty and ambiguity, making it easy for the workforce to concentrate on what matters.
Taking cue from the first point, the second benefit or purpose of implementing OKRs foris a need for clarity of expectations and overall team and organizational alignment. In case of fast growing organizations, there is an overlapping of roles and responsibilities and a lack of clarity on expectations from each employee. This leads to lower than average outcomes, productivity and revenue growth and data backs the same.
97% of employees and executives believe lack of alignment within a team impacts the outcome of a task or project. Whereas, companies that regularly exceeded revenue goals were 2.3X more likely to report high levels of alignment.
By ensuring organization-wide goal visibility, OKRs help teams to decode what is expected out of each team member and their respective contribution towards achievement of the shared goals. Thus, increasing alignment and collaboration.
Finally, setting and implementing OKRs is often a collaborative process. Employees get involved in and participate during the entire OKR process and feel engaged in the same. This greater involvement and participation leads to deeper levels of engagement and ownership of key results which drive impact.
OKRs also enable employees to also gauge their performance and measure their progress in an effective manner. This motivates them to get more involved in achieving the common weekly, quarterly and annual goals. This higher level of engagement directly impacts key organizational parameters such as retention, productivity, profitability, etc.
The business case for OKRs is very clear. However, for companies that are scaling up, with limited bandwidth and competing priorities, often setting OKRs itself gets left behind due to other business priorities.
If an organization focuses on a manual approach to the OKR system, there are several steps which require a lot of time and effort including setting and writing, implementing, tracking, grading, evaluating and modifying OKRs.
Fortunately, today there are OKR tools in the market, which can help automate all of these aspects to help simplify the OKR journey. The right goal management software can help you maximize the realization of the return on investment for your OKRs. Following are the top five ways in which an OKR software makes a measurable difference on the bottomline —
First, an OKR tool can help organizations document or record the OKRs in a way that is visible and accessible to all. There is supporting evidence to show that what gets documented has a higher chance of being achieved, as what is out of sight is often out of mind.
Individuals are 42% more likely to achieve goals when they are physically recorded.
Therefore, the OKR tool can enable organizations to clearly define the business and team OKRs in a written manner which can be reflected on, seen again and again to create instant recall for employees.
OKR tools are great for creating alignment and accountability. On the alignment front, the OKR software can help achieve high levels of strategic alignment on what is the responsibility of each team member across organizations towards the key business goal achievement.
Highly aligned companies grow revenue 58% faster and are 72% more profitable than their misaligned counterparts.
The dashboard of a good OKR software can help you constantly gauge the level of goal achievement, ensure that team members are aligned on different phases as well as keep a track of when their responsibility is due. It creates high levels of transparency.
Moreover, greater alignment leads to high levels of accountability. Generally, since there is a lack of alignment on responsibilities, there is an accompanying lack of ownership and accountability, and most employees shirk away from taking accountability.
84% of the workforce describes itself as “trying but failing” or “avoiding” accountability, even when employees know what to fix.
A goal management software like SuperBeings allows you to integrate OKRs with regular meetings and check-ins to keep track of progress. Thus, driving a culture of accountability.
It is very common for companies to set OKRs and then evaluate them only at the end of the quarter/year. There is a lack of mid-term tracking which makes it difficult to gauge whether the progress is aligned with the key results or not.
40% of people that write down goals don’t check whether they’ve achieved them. Moreover, only 5.9% of companies communicate goals daily.
An OKR software can help you address this concern by facilitating day-to-day OKR progress tracking. A daily dashboard and history of 1:1 and team check-ins on OKRs, can help organizations track developments over time.
It can also help identify and resolve any performance issues that stand in the way of goal achievement preemptively. At the same time, even if organizations are tracking and monitoring OKR progress, doing so with a manual process is inefficient. An OKR tool can automate most of these processes to enable HR and people managers to spend more time on driving results.
Another major concern that organizations face when it comes to OKRs is being prepared and ready for the same. Many line managers and others struggle with writing effective OKRs. Many organizations believe setting OKRs once is enough. However, that is far from the truth.
Research says, companies that set performance goals quarterly can generate 31% more returns than those reassessing annually.
Using an OKR software can help eliminate all these challenges.
Finally, an OKR software can promote high levels of collaboration for goal achievement. For many organizations, the inability to collaborate leads to low levels of results, diminishing the ROI for OKRs.
86% of employees and executives cite lack of collaboration or ineffective communication for workplace failures.
Using a good OKR software makes collaboration seamless by aligning cross-functional projects and tracking cumulative progress. Invariably, an increase in degree of collaboration is a direct ROI of an OKR tool which can create far reaching impact.
In this final section of the article, we will talk about the key parameters that can help you gauge the ROI of an OKR software. While the above mentioned are primary impact areas, most of them have a qualitative aspect to them.
Gauging the ROI requires backing of data points from employee experience and business results, which the following parameters can help explain.
Organizations should start by gauging whether or not transparency and alignment on goals has increased. This can be measured using employee pulse surveys to understand their opinion on how well they have visibility of goals and clarity on what they need to work towards. Therefore, the first ROI parameter for an OKR software is to identify the increase in level of transparency to ensure everyone is working in the same direction and there are no gaps or overlap in efforts.
The main purpose of an OKR tool is to facilitate the effective and efficient achievement of the goals set by an organization. Thus, the next parameter to measure ROI should revolve around the degree and time period of goal achievement.
You can start by comparing the degree of goal achievement by leveraging OKR grading to see if there is a significant improvement in percentage terms as compared to pre-OKR tool period. Second, it is important to gauge whether or not the goals/key results have been achieved in a shorter period of time or not. Since the OKR platform facilitates better alignment, collaboration, tracking, etc., it can help organizations achieve or realize the goals faster.
Third, there are several administrative overheads that accompany the setting and implementation of goals/OKRs. These include tracking, grading, etc. for managers and providing inputs on the part of employees. The ROI of an OKR software can be gauged by mapping whether or not these overheads come down.
The next parameter for ROI calculation is to measure the change or increase in revenue after the adoption of an OKR software. Since an OKR tool seeks to enable organizations to achieve their goals faster, cost effectively and to a greater extent, there should be an increase in the revenue realized.
According to Larry Page, co-founder, Google claims that “OKRs have helped lead us to 10X growth, many times over.”
Finally, gauging the value of employee parameters like retention/turnover, productivity, engagement, etc, can cumulatively be leveraged to capture the ROI of an OKR tool. There are several ways to gauge these workforce parameters, along with factors like eNPS, etc. which have a direct business impact. Calculating them can help measure the ROI of the OKR tool for an organization.
It is evident that adoption of an intelligent OKR software is not only good to have, but integral for organizational success. Using the right tool has a direct business impact which can be measured in numbers using the ROI parameters mentioned in this article.
There are both qualitative and quantitative aspects to measuring the ROI and a balanced approach to both can empower organizations to align individual performance with business goals.
If you are considering implementing the right OKR software in your business, try out SuperBeings free 21 day trial. Book today. (No credit card or commitment required)
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