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Organisational Culture and Employee Performance

Organisational culture defines the way employees complete tasks and interact with each other in an organisation. The cultural paradigm comprises various beliefs, values, rituals and symbols that govern the operating style of the people within a company. 

Corporate culture binds the workforce together and provides a direction for the company. In times of change, the biggest challenge for any organisation may be to change its culture, as the employees are already accustomed to a certain way of doing things.

Types of Organisational Culture

The dominant culture in organisations depends on:

  1. The environment in which the company operates
  2. The organisation’s objectives
  3. The belief system of the employees
  4. The company’s management style 
Therefore, there are many organisational cultures. 

  • For example, highly bureaucratic and well-structured organisations typically follow a culture with extensive controls. Employees follow standard procedures with strict adherence to hierarchy and well-defined individual roles and responsibilities. 
    • Those in competitive environments, such as sales, may forgo strict hierarchies and follow a competitive culture where the focus is on maintaining strong relationships with external parties. 
    • In this instance, the strategy is to attain competitive advantages over the competition. 
  • The collaborative culture is yet another organisational way of life. This presents a decentralised workforce with integrated units working together to find solutions to problems.

Advantages of a Strong Company Culture

  • Strong corporate cultures indicate that employees are like-minded and hold similar beliefs and ethical values
  • When these beliefs and ethical values align with business objectives, they can prove to be effective in building teams because rapport and trust quickly ensue. 
  • The bonds that the teams build help them avoid conflicts and focus on task completion. 
  • Strong corporate cultures ease communication of roles and responsibilities to all individuals. Employees know what is expected of them, how management assesses their performance and what forms of rewards are available.

Company Culture Effect On Employee Performance

Organisational cultures can have varying impacts on employee performance and motivation levels. 

  • Oftentimes, employees work harder to achieve organisational goals if they consider themselves to be part of the corporate environment. 
  • Different cultures operating in one company can also impact employee performance. For example, if the organisation maintains a reserved “talk when necessary” culture, employees may work accordingly - however if the organisation allows one area, say the sales team, to be outspoken and socially active, the organisation may experience rivalries among areas. Thus, allowing an area to set up their own culture can affect the performance of the employees deployed elsewhere in the company.

Integration of Performance and Culture

Organisations must structure their recruitment processes to attract and engage incumbents with the same beliefs and values that constitute the organisation’s culture. 

  • This ensures the new employee’s assimilation to the company and further strengthens corporate culture. 
Companies should also ensure that they align corporate culture with performance management systems.

  • When culture and management systems are not aligned, management must redirect them so that employee behaviour results in the achievement of organisational goals.