How Does an Organization's Culture Influence Employee Behavior

Picture of Anete Vesere

While many factors can have an impact on employee behavior, the culture of the organization plays a significant role in shaping how employees think, act, and interact with one another. In fact, employee behavior in the workplace is influenced by organizational culture more than most people realize. 

This blog will help you understand the intricate relationship between organizational culture and employee behavior.

What is organizational culture?

To put it in simple terms, organizational culture encapsulates the values, norms, beliefs and behaviors shared by members of an organization. Think of it as the DNA of the company that serves as the influence for everything ranging from decision making, organizational goals, communication styles as well as overall employee attitudes. 

Research by HBR shows that 70% of employees and those in leadership positions state that organizational culture is one of the top important factors when it comes to business success.

However, organizational culture can be either positive or negative (or otherwise called “toxic”). Here are some of the main differences between the two:

Positive organizational culture

  • Alignment of mission and values
  • Clear roles & accountabilities
  • Performance focused
  • Open and transparent communication
  • Supportive environment
  • Innovation and creativity are rewarded
  • High change agility and ability to recover from drawbacks

Negative (toxic) organizational culture

  • Clear lack of strategic alignment
  • Unrealistic expectations
  • “Them” vs. “Us” dynamics
  • Communication that is blame focused
  • Lack of appreciation expressed
  • Low levels of engagement
  • Fear of speaking the truth and voicing concerns

How does an organization's culture influence employee behavior

Imagine your favorite coffee place, where the aroma of a freshly brewed coffee fills the air and some Lo-Fi tunes play in the background. Now, think about how this specific atmosphere affects the behavior of both customers and employees. Think about how it affects your mood and the way you greet the barista, for example. Of course this can be either positive or negative, depending on various factors (more about that in a bit).

In a similar way, organizational culture is just like the unique atmosphere of that coffee place. It sets the tone for the workplace, ultimately influencing how people interact, communicate with each other and carry out their roles. 

To understand the intricacies of this interplay, let’s take a dive into which elements of organizational culture shape the everyday behaviors of employees within an organization.

5 elements of organizational culture that impact employee behavior the MOST

Dismantling all aspects of organizational culture would be a much longer blog than this. So, for the purposes of keeping it short and to the point, we have compiled a list of the 5 most important key elements of organizational culture that impact employee behavior.

Communication practices

The way information flows within an organization is a key aspect of its culture. A culture that encourages open and transparent communication promotes trust among employees. A great example of this is how Spotify handled their layoff communications with transparency and compassion, helping employees understand the situation and navigate the changes ahead.  

On the other hand, a culture that is secretive or hierarchical may lead to a lack of information sharing and a more guarded work environment.

Leadership style

Let’s take the hospitality industry as an example here. Think of a  floor manager  who actively encourages collaboration amongst the staff, organizes regular team-building activities and acknowledges the successful team efforts of ensuring a positive guest experience. This team-oriented leadership style will positively impact  the employees by inspiring them to cohesively work towards common goals, leading to improved overall service quality and guest happiness. 

“Lead by example” is by all means one of the most used phrases and it is so for a reason. After all - leadership style sets the tone for behaviors, work ethic and values expected from employees.

DEIB

Diversity, Equity, Inclusion, and Belonging (DEIB) are integral components of organizational culture due to their profound impact on workplace dynamics, employee engagement, and overall success. Embracing DEIB reflects a commitment to recognizing and valuing the diverse backgrounds, perspectives, and experiences of individuals within the organization.

However, according to a study conducted by GoodHire, nearly 81% of employees would consider leaving their jobs due to the lack of commitment regarding DEIB.

Holistic and inclusive well-being

Research by HBR shows that 91% of employees believe that a company’s culture should support mental health and well-being. Why? Because employees are more stressed than ever, with 83% of US workers suffering from work-related stress. 

This makes it clear that work-related stress is on the rise and employee well-being deserves to be prioritized.  With investment in building and fostering a strong culture that actively supports well-being, organizations will create workforces that are more resilient, engaged and happy. 

Employee recognition & empowerment

 Recognition can take many forms, yet 65% of employees prefer non-cash incentives. When you show appreciate of your employees, through for example a recognition program, several positive impacts emerge:

Now, about employee empowerment. When employees feel they have a say in how things are done and they can freely express their thoughts, as well as opinions, they’re more invested in the results. They feel empowered. It all sounds perfectly simple, doesn’t it?  Yet, 79% of employees have experienced micromanagement, and 71% said micromanagement interferes with their job performance.  If organizational culture allows for employees to feel empowered, it will result in higher employee satisfaction, better business results, higher retention and so on.

One way of showing employee appreciation and recognition is  by giving employees a platform, such as an employee app, to recognize and celebrate achievements.

Why focus on company culture for frontline employees?

Gartner estimates that there are 2.7 billion frontline workers — more than twice the number of desk-based workers. This includes all individuals acting as a link between the company and its end customers, who may or may not sit out of the main office. Frontline employees often operate across dispersed locations, with significant responsibility and contribution toward value creation. 

However, there's often disproportionate value creation for them that's evident with the following facts: 

  • 55% of U.S. frontline workers are dissatisfied with the number and quality of relationships within their organizations.
  • 45% of them plan to leave their job in the next 3-6 months. If that happens, American companies stand to lose out on expertise, typically to the tune of $4.5 million a year in productivity.

Despite the present-day economic disturbances, this concern around frontline employee turnover remains alive, with improving company culture as a solid answer to attracting and retaining top talent.

P.S. Take a look at our white paper about "Developing a Positive Company Culture for Frontline Workers" to find out how internal communications can contribute to building a company culture for frontline employees