What Does a Good Company Culture Look Like?

Nobody likes working for a company where they dread going to work or are just doing the minimum to get by and earn a paycheck. In the past, these employees might have stayed in toxic work cultures indefinitely, but then came the COVID-19 pandemic. Due to uneven employer responses to the virus and to employee concerns about their health and their families, more workers came to the realization that they didn’t have to “grin and bear it” at work anymore and quit existing jobs in search of a great company culture elsewhere––whether a new company or a different career path entirely.

The so-called “Great Resignation” has continued as other aspects of life return to a semblance of pre-pandemic normalcy. In a global worker survey from Microsoft, 41% of workers surveyed were thinking about resigning or changing careers. And in April 2022 more than four million US workers quit their jobs.

Organizations that are coasting on a culture they developed prior to the pandemic and that they assume is still adequate—even positive—but that has actually slipped are in for a rude awakening if it hasn’t happened already. Increasing numbers of employees are leaving for jobs elsewhere. To retain and attract top talent, now more than ever, the quality of the culture of a company and work environment must become a key focus.

What is corporate culture?

Corporate culture refers to the beliefs and practices that exist within an organization and it determines how employees and management interact as a team, and how they conduct business.

It’s not necessarily something that is explicitly defined but is often implied through various factors such as dress code, office setup, business hours, employee benefits and how the team celebrates achievements or addresses failure. Harvard Business Review identifies six components of a great corporate culture.

1. Vision: an organization founded on an authentic mission provides purpose and direction, helping employees and stakeholders make all of their decisions.
2. Values: While a vision defines a company’s purpose, defined values offer guidance on the behaviors needed to achieve that vision.
3. Practices: It’s all well and good having nice values on paper, but these are redundant if people don’t incorporate them into their everyday life.
4. People: Culture is created by the people themselves.
5. Narrative: The ability to craft your company’s history into an ongoing story that can be embodied by your employees.
6. Place: This refers to both the physical space and location in which you work, the geography, architecture and aesthetic design and layout all impact the culture of your business.

Why the culture of a company matters from a business perspective

Before examining what a “good company culture” looks like, let’s discuss why company culture is important in the first place. According to the Society for Human Resources Management (SHRM), the common factor all successful companies share is a strong company culture. Furthermore, SHRM points out that when companies build, foster and live strong organizational cultures that are built on shared beliefs and values, supported by company structure and strategy, three crucial things happen:

• Workers know how their employers want to them to act and which actions to take in any situation
• Workers trust that the expected action is the correct one
• Workers know they will receive positive reinforcement for following company values

On the other hand, a company culture that’s weak can undermine a company and its leadership. Instead of success, the results will be high turnover, worker apathy, unhappy clients and decreased revenue. Therefore, it would behoove all employers—even those that prioritize profits over employee wellbeing—to understand the link between the two if they want to stay competitive and thrive.

The new reality of the corporate world

A shift can definitely be attributed to the new generation that’s now dominating the workplace. According to Jeanne MacDonald, the organization’s global operating executive, “Millennials are absolutely looking for culture and fit. They want to feel good about where they’re working and require a shared sense of purpose.”

Beyond hiring, a study by Gallup found that employees with a strong connection to their organization’s culture show higher levels of engagement. And, according to Harvard Business Review, organizations with high levels of employee engagement report 22% higher productivity, lower turnover and even fewer safety and quality incidents.

Not only does corporate culture help attract and retain employees, it can also be leveraged to instill certain norms within an organization and align the team towards common objectives. For example, in 2014 Facebook replaced its famous motto, “Move fast and break things,” with “Move fast with stable infra,” signaling a clear shift in its way of working and mentality as the company matured. While in the beginning it was important to build as fast as possible (even if there were bugs along the way), now the company promises its users it will fix all bugs within 48 hours.

All of these potential benefits have led to the rise of ‘employer branding’ with HR teams using traditional marketing tactics to promote their culture externally and attract more talent.

But a word of caution. While company culture can be a powerful tool for your organization, it can just as easily undermine your employer brand if your efforts aren’t sincere. Just like consumers, employees are now able to share what it’s really like inside your organization via sites like Glassdoor. Therefore, developing a corporate culture that only looks great from the outside, isn’t going to cut it.

But the great thing is that putting your efforts into building a truly great corporate culture for your current employees will pay off. According to the study by Gallup:

• Engaged employees are more likely to refer friends to their organization
• And 71% of workers say that they use referrals from current employees of an organization to learn about job opportunities

What cultural factors matter to employees?

Now that we’ve established why culture matters from a business perspective, what makes your firm’s workplace culture “good” in the eyes of team members and jobseekers? What elements attract new employees and create a cultural fit that makes your existing workers want to stay? The answers may surprise company leaders and/or be out of step with their cultural objectives, company mission and vision for the future.

While answering questions of culture can be difficult, there are markers from employee company reviews that could help organizations transform their cultures from bad to good. A 2021 study from MIT Sloan Management Review used their natural language processing tool to analyze 1.4 million employee Glassdoor reviews over several years. The study used Shapley additive explanations (SHAP values) to determine 10 workplace culture factors that affect employee perception of an organization. From these, we can determine which elements make for a positive company culture.

10 company culture elements that matter to employees

1. Employees are treated with respect, dignity and courtesy.
2. Leaders support employees and respond to requests, offer encouragement and accommodate individual needs.
3. Leaders live the core company values and are consistent, e.g., they don’t say one thing then do another.
4. Toxic bosses or “horrible,” “poisonous,” disrespectful leaders who are unethical and abusive, etc.
5. Unethical behaviors and a lack of integrity. The MIT Sloan study determined that integrity was twice as predictive of the employee rating of company culture than the average topic.
6. Benefits were more important than compensation and they varied considerably. For example, health benefits and health insurance are more crucial to frontline workers while white-collar workers value pensions and 401(k) plans above other types of benefits.
7. Perks, such as free coffee, free meals, free breakfast, free wine, etc. were rated favorably by most workers. Furthermore, company-organized events were a particularly effective predictor of whether an employer would receive a high culture score.
8. Learning and development were important to a third of employee reviews. Furthermore, learning and professional development were most important to white-collar workers.
9. Job security, particularly job insecurity, is a key worry to employees and a culture marker that most employers ignore when devising core values.
10. Reorganizations ––not surprisingly, most employees rate them poorly. Furthermore, the study found that the fewer an organization’s Glassdoor reviews mentioned the term, the higher its culture score.

How to create a positive company culture

With the culture elements that matter the most to employees in hand, the factors that go into creating a positive workplace environment that attracts and retains employees should be clear. To discover what matters most in your company, follow these three tips from this TEDx Atlanta talk by Chris White of the University of Michigan’s Center for Positive Organizations.

1. Unblock barriers to communication and listen to employees. Afterwards, don’t make promises you don’t intend to honor or have no power to implement. Your words need to be backed by actual actions. It’s better to be honest about next steps and solutions, even if they aren’t the ones employees want in the moment. Remember, the study discussed in the previous section found respect, supportive leadership and ethical leaders who live the company values to be crucial positive workplace culture markers.
2. Don’t ignore or discourage differences of opinion and conflict. Allow and embrace worker opinions and ideas, even when managers and senior leaders don’t agree. By allowing the exchange of differing viewpoints, your workers will still feel respected and valued.
3. Be more inclusive and supportive by inviting people to be their true selves at work. This also goes to respect and support. Plus, by embracing employee diversity and inclusion, there are also benefits for the company, such as increased innovation and development of new products and services.

Asking workers crucial questions and listening to their answers, even embracing those times they don’t feel comfortable answering can help companies gain critical insight into the shortfalls in the company culture and how to make it a better, more attractive place to work. This is true even when a business can’t offer flexibility and perks, including working from home and unlimited vacation.

Coaching can help organizations develop and maintain a positive workplace culture

To help you examine your current workplace culture and open a meaningful dialogue between leaders and employees, professional coaching is invaluable. Coaching for positive company culture results in higher productivity, improved employee engagement and higher employee retention rates. As the leading online coaching provider, CoachHub has a number of solutions that can help you develop and improve a strong, positive culture at your company that attracts top talent, fosters effective leadership and raises profits.