Workplace Culture: What It Is, Why It Matters, and How to Define It

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Culture is the character and personality of your organization. It’s what makes your business unique and is the sum of its values, traditions, beliefs, interactions, behaviors, and attitudes.

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Positive workplace culture attracts talent, drives engagement, impacts happiness and satisfaction, and affects performance. The personality of your business is influenced by everything. Leadership, management, workplace practices, policies, people, and more impact culture significantly.

The biggest mistake organizations make is letting their workplace culture form naturally without first defining what they want it to be.

Why Workplace Culture is Important

Culture is as important as your business strategy because it either strengthens or undermines your objectives. Positive culture is significant, especially because:

  • It attracts talent. Job candidates evaluate your organization and its climate. A strong, positive, clearly defined and well-communicated culture attracts talent that fits.
  • It drives engagement and retention. Culture impacts how employees interact with their work and your organization.
  • It impacts happiness and satisfaction. Research shows that employee happiness and satisfaction are linked to strong workplace culture (Source: Deloitte).
  • It affects performance. Organizations with stronger cultures outperform their competitors financially and are generally more successful.

What Impacts Culture in the Workplace?

The short answer is everything. A multitude of factors play a role in developing workplace culture, including:

Leadership

The way your leaders communicate and interact with employees, what they communicate and emphasize, their vision for the future, what they celebrate and recognize, what they expect, the stories they tell, how they make decisions, the extent to which they are trusted, and the beliefs and perceptions they reinforce.

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Management

How your organization is managed—its systems, procedures, structure, hierarchy, controls, and goals. The degree to which managers empower employees to make decisions, support and interact with them, and act consistently.

Workplace Practices

Practices related to recruiting, selection, onboarding, compensation and benefits, rewards and recognition, training and development, advancement/promotion, performance management, wellness, and work/life balance (paid time off, leave, etc.), as well as workplace traditions.

Policies and Philosophies

Employment policies including, but not limited to, attendance, dress code, code of conduct, and scheduling, in addition to organizational philosophies such as hiring, compensation, pay for performance, and internal transfer and promotion.

People

The people you hire — their personalities, beliefs, values, diverse skills and experiences, and everyday behaviors. The types of interactions that occur between employees (collaborative versus confrontational, supportive versus non-supportive, social versus task-oriented, etc.).

Mission, Vision, and Values

Clarity of mission, vision, and values and whether they honestly reflect the beliefs and philosophies of your organization, how inspiring they are to your employees, and the extent to which the mission, vision, and values are stable, widely communicated, and continuously emphasized.

Work Environment

Objects, artifacts, and other physical signs in your workplace. These include what people place on their desks, what the organization hangs on its walls, how it allocates space and offices, what those offices look like (color, furniture, etc.), and how common areas are used.

Communications

The manner in which communication occurs in your workplace. Importantly, the degree, type, and frequency of interaction and communication between leaders and employees, and managers and employees, including the extent of transparency in sharing information and making decisions.

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Defining Your Workplace Culture

Most of us let our workplace culture form naturally without defining what we want it to be, and that’s a mistake. For example:

  • We create policies and workplace programs based on what other employers do versus whether they fit our work environment.
  • We hire employees who don’t fit.
  • We tolerate management styles that threaten employee engagement and retention.
  • We don’t create and communicate a clear and inspiring mission, vision, and set of values.
  • Our work environments are lackluster.
  • We don’t consider how our everyday actions (or inactions) as leaders are affecting the formation of our culture.

For these reasons, it’s important to step back, evaluate, and define your workplace culture—both what it is now and what you want it to be in the future — and how all of these factors either contribute or take away from your desired culture.

Although it can be very difficult to define, assessment tools and surveys can help you gauge your culture. They may reveal gaps between the culture you want to attain and the culture you currently have.

In addition, observation, examination of workplace behavior, meetings, discussions, and interviews can expose your workplace climate. The important part is to start somewhere and open a dialogue with your leadership team about it.

Keep in mind that culture is always a work in progress. It can and will change. Make culture as important as your business strategy. It’s too significant to ignore, and shaping it is one of your most important responsibilities as leaders and HR professionals.

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