There’s a lot of buzz about company culture these days. Happy employees, flexible hours and fun working environments are all the rage. But maybe you’ve wondered if there’s any real science or data to back up the trend.
The truth is that studies have shown repeatedly that there is no replacement for a great company culture. It’s scientifically proven that making your workplace more fun and human brings profit and productivity.
This article will present some of the research on company culture and highlights 10 key areas that companies can focus on to improve.
1. Make Employees Happy
This sounds basic, but it’s the number one thing to do if you want an increase in profit and productivity. The 2016 IZA World of Labor report shows that an increase in employee happiness directly relates to a rise in employee productivity, and studies published in The Journal of Labor Economics indicated a 12% rise in productivity when people were happy. The reason being that happy employees take less sick days, work harder and take more initiative.
People who aren’t happy also suffer from disengagement. According to the Gallup organization, disengaged employees had 37% higher absenteeism, 49% more accidents, and 60% more errors and defects.
Unhappiness is starting to sound expensive and taxing, right? So how do we achieve happiness in the workplace? Read on for more tips on exactly how to make it happen!
2. Have a Human Hiring Process
In the past, it was thought that the dream team was made up of the people who were most qualified on paper. Organizations often have a rulebook 3 inches thick that dictates exactly who can be hired for what position.
But companies with positive company culture have shifted away from hiring people only based on qualification, and towards hiring for fit. Hiring for fit means hiring people who share the human values of the company and whose personalities will mesh well in the company’s culture. This doesn’t mean that you shouldn’t hire people with unique skills, background or specialties. You should! Find a way to combine the two.
Bottom line, hire people who you want to be around and who add a unique dynamic at the same time. Treat them like the valuable humans that they are. Pay attention to who new hires are as people and individuals. In turn, studies show that you will get people who want to work harder and who cooperate more.
Harvard Professor Dr. Francesca Gino and her colleagues have studied how companies onboard new employees for over a decade. She’s focused on 20 major corporations ranging from Disney to McDonalds. She sums it all up with clarity and eloquence.
“There is nothing inherently wrong or unethical with a traditional onboarding approach, but we believe it is sub-optimal because it keeps employees emotionally detached from their jobs and fails to generate the most productive, innovative work environment...In fact, this traditional approach ignores employees’ basic human need to express their authentic, best selves – to be recognized by others for performances that tap signature strengths.”
3. Support Employee Work Life Balance
The old school would say that a company’s job is strictly to make profit. That meant a high pressure workplace where employees were pressured to complete their tasks with speed and perfection.
Modern science shows us that this kind of cutthroat pursuit of profit causes a lot of unnecessary stress. That stress is the hidden killer of people and profit alike. Research shows that increased stress is responsible for up to a 50% increase in voluntary turnover rate as well as a slew of health problems that lead to increased absenteeism and medical costs. Companies with good culture encourage their employees to take time off when they need it, to balance their working and personal lives and to get enough rest.
The Dutch company Bynder offers an inspiring example. They offer unlimited paid vacation for their employees. According to CEO Chris Hall, “Providing unlimited vacation time reflects the value we have for our employees. No matter where they are in the world, we believe in giving our people more freedom when it comes to a better work-life balance.”
4. Communicate the Mission and Vision of Your Company to Every Employee
When people understand your vision and find it valuable, then they will be more willing to work hard for it. A recent study showed that over half of people don’t really understand how their work affects their company’s bottom line. If you don’t value and see the purpose of what you are doing, then you will naturally be less motivated than someone who does.
According to a Forbes study, there is a clear correlation between employees finding a mission to be valuable and their rate of engagement. If employees don’t even know what your mission and vision is, then it’s a lot harder for them to engage and find maximum productivity.
Ditch the old fashioned concept that employees only need to know about their isolated roles, and share the overall mission, vision and goals of the company with them regularly and clearly. The table below shows how directly understanding a meaningful vision corresponded to engagement in the Forbes study.
(Source: Forbes 2014)
5. Encourage Employees to Speak Freely with Management and Each Other
A large Google study shows that psychological safety is the most important in factor in high performing teams. Psychological safety is when people feel that they will not be punished for mistakes. A big part of this is being able to say what’s on your mind without worrying that you will be ridiculed, ignored or ostracized. When people feel safe to speak freely you get better ideas, happier employees and workplaces that literally work better. Create an atmosphere of trust and honesty if you want to see your organization grow.
6. Show Empathy and Compassion
The next time someone makes a mistake, try to empathize instead of playing the blame game. In the past, repercussions and punishment were viewed as a necessary system of checks and balances. But modern research shows that punishment damages trust and loyalty, while curiosity and compassion build it. Management who is able to demonstrate kindness and compassion is more respected by employees who are more likely to remain loyal.
7. Provide Structure and Clarity Without Micromanaging
Micromanaging is a thing of the past. Hire people who fit your company values and who love working for you, and you’ve hired people who are naturally productive. However, that doesn’t mean that work has to be a free-for-all and that you shouldn’t provide a healthy structure and clarity. According to the Google team study, the strongest team members all had clear roles, plans and goals.
8. Make it Fun to Go to Work
Numerous studies show that having fun at work increases productivity and decreases absence due to illness. Fun is particularly important for millennials, the generation that currently ranges from 18-35. Millennials are the largest generation of the modern workforce, and 1 in three millennials is already in management. By 2025 they will make up 75% of the working population. Having more fun actually makes this generation work harder. 79% of millennials say that fun is an important workplace factor that makes them work harder. The bottom line is that opportunities to socialize, laugh and celebrate are all important if you want a productive workforce in the modern world.
9. Acknowledge Accomplishment Regularly
When someone does a great job with a task big or small, acknowledging their good work is the best thing you can do to motivate them to work harder in the future. According to a Harvard study, “Results confirmed that best-self activation inspired improvements in people’s emotions, resistance to disease, resilience to stress and burnout, creative problem solving, performance under pressure, and relationships with their employer.” In a nutshell, acknowledging people when they do well activates a sense of wellness that inspires them to become the best version of themselves.
10. Get to Know Your People
Make an effort to know who your employees are as individuals. Get familiar with their personal and career goals and support them. A Google study of over 10,000 managers found that the best managers express an interest in the success and well being of their individual employees. Good management knows how to earn the respect and trust of employees, and this isn’t all about technical expertise (as it has often been thought in the past). It’s about good communication and listening skills and the ability to show care and interest.
Bottom Line: Be Human
If your organization is looking to improve its company culture, then asses how you are doing in these ten areas. If you aren’t sure where to start, a comprehensive HR survey could be a perfect tool for figuring out where you need to focus your efforts.
The take home message is that effective companies are shifting away from traditional formal corporate environments. Being successful in today’s economy means shifting towards warmer, friendly and more human experiences in the workplace. To understand how your company is doing take our quiz, "How Healthy is Your Company Culture?".