What Is Company Culture, and Why Is It Important?

by Extension Engine | July 26, 2022

Estimated time to read: minutes

Regardless of where people work or what they do, company culture is a hot topic for employees across the country.

According to a 2022 survey conducted by the professional review website Glassdoor, 74% of American workers say they would leave a job due to poor company culture. For 77% of adults, company culture is also a critical factor when applying to and accepting a new job.

With statistics like these, it’s easy to see the importance of workplace culture for recruiting and retaining employees.

So, what is company culture? How can we define the overall “vibe” of a workplace? More importantly, how can employers improve it?

Here’s everything you need to know about curating an excellent company culture.

What Is Company Culture?

If you’re uncertain exactly what company culture is, that’s by design. It’s often challenging to precisely define company culture. It can — and probably should — vary between workplaces, because employee values, interactions and behaviors, and internal hierarchy, which differ from place to place, all affect company culture.

You can look at company culture as the culmination of an organization’s attributes, attitudes, and goals. Rather than a static set of rules or instructions, employees demonstrate company culture every day through their words and actions.

Why Company Culture Matters

As the above study mentioned, company culture is significant for job applicants. People want to join organizations that support their personal values and positively impact their lives. Job seekers are less likely to join a company they suspect will undervalue or disrespect them.

Of course, company culture matters long after someone is hired. Talented employees are more likely to leave if they feel that the company promotes an unhealthy environment or doesn’t support their ambitions.

Even in a competitive job market, employees should not be expected to put up with mistreatment, harassment, or neglect in the workplace. If the company culture fails to make them feel valued, they will leave — and rightfully so. 

Assessing Your Company's Culture

Diversity is one of the most important values an organization can prioritize in the workplace. People come together from all walks of life to commit to common goals. And everyone deserves to feel accepted, supported, and understood at their jobs. 

How can you identify your company’s culture? Compare your experience to the common traits of toxic and healthy workplaces. And of course, if you really want to learn about your organization’s company culture, talk to the individuals affected by it. Be certain you regularly survey employees and conduct stay interviews. 

Toxic Company Culture

Regardless of your own experience, chances are you’ve heard the term “toxic workplace.” A toxic company culture refers to a workplace environment that harms an employee’s psyche. 

Here are some common signs of a toxic company culture:

  • Poor communication between teams
  • Social cliques, gossip, and bullying
  • Inappropriate workplace discussions
  • Unhealthy work-life balance
  • Conflicts within management
  • Rapid employee turnover
  • A hierarchy that won’t budge

Toxic company culture drains employees, disrespects them, and makes them feel hopeless. With little chance of recognition or promotion, workers are not likely to go above and beyond at their job. A toxic work culture doesn’t just hurt employees; it impacts the entire organization. 

Healthy Company Culture

Healthy company culture involves more than just not being toxic. Excellent company culture makes employees feel excited and appreciated. 

Here are some signs of a thriving company culture:

  • Ideas flow smoothly between coworkers
  • Conversations are cheerful, polite, and comfortable
  • Employees stick around for the long term
  • Managers respect people’s time outside of work
  • Hard work is recognized and rewarded
  • Conflicts are resolved with transparency
  • People have fun!

In a healthy culture, everyone should feel like an essential part of the team. Employees should be open to sharing new ideas and putting themselves out there in a culture that supports and accepts them as they are. 

How to Build a Good Company Culture

Are you afraid your company may be leaning toward the toxic side of the spectrum? Have no fear; you can still right the ship through open conversation and a little elbow grease. Here’s how: 

1. Define Your Values

When potential new hires look at your company, what do they see? Ensure that your values and goals for the organization are transparent and fair. Some values to strive for include:

  • Honesty
  • Positivity
  • Inclusion
  • Trust
  • Loyalty
  • Flexibility
  • Energy
  • Innovation

Defining your company values goes beyond putting buzzwords on your webpage. Make sure everyone at the company understands and embodies your values. When conflict arises, you can look to your core values to find the solution!

2. Set Clear Expectations

When a new employee joins the company, ensure that they know what is expected of them. Embodying company values is a good place to start. You should also discuss weekly and daily schedules, how to request time off, and the potential for promotions or raises. 

Both employees and employers need to have clear expectations in the workplace. Employees should set healthy boundaries around their time at work and at home. When the team embarks on a new project, everyone should be familiar with its procedures, milestones, and deadlines. 

3. Encourage Healthy Communication

Healthy communication is crucial to a healthy workplace. Employees should feel comfortable asking questions and learning from coworkers and managers. 

Everyone should feel confident to share their true selves at work. However, don’t assume everyone agrees with your opinions and beliefs. If you’re discussing politics, religion, sexuality, or money with coworkers or employees, a key factor in healthy communication is keeping the conversation respectful. It’s also important to realize that some people will not want to talk about these topics, and they should not be forced to do so.

Managers and bosses should be open to constructive criticism and workplace suggestions. If employees have conflicts or an issue with the workplace, they need to be able to share the problem with management. Honesty is the best policy. 

4. Reward Enthusiasm

Some people love being at work, while others prefer being at home. You want to create an environment that works for everyone. A thriving workplace needs employees who do more than just show up. 

What can you do to help staff feel energized and excited to contribute? When someone demonstrates the company values or goes above and beyond in their work, recognize them!

Rewards for enthusiasm don’t always have to be raises, promotions, or parties. Simple acknowledgments go a long way. Try praising your coworkers with statements like:

  • “You had great ideas at the meeting!”
  • “I can tell you worked hard on this!”
  • “How do you do that so well?”
  • “I’ve been impressed by your attitude this week.”

Rewarding enthusiastic employees makes everyone feel valued for their efforts. These feelings are essential to an incredible company culture!

Creating Positive Company Culture

Company culture is not something any one person can create on their own. A positive, exciting culture is born when everyone contributes!

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