Tag Archives: corporate culture

The Correlation Between Company Culture and Productivity

The term “company culture” is a wide umbrella that encompasses several elements of business. As Tech Target defines it, “Company culture is the pervasive values, beliefs, and attitudes that characterize a company and guide its practices.” In other words, it’s the overarching personality of a company.

The interesting thing is that culture is much more than a buzzword that defines a business’s style. It has a profound impact on productivity and can often make or break your bottom line.


Different Types of Culture

To understand the correlation between company culture and productivity, we must first understand the various ways that culture affects your employees because they are what ultimately drives productivity. To do this, let’s create two hypothetical companies — one with a great culture and the other with a lousy one.

Company A has a great culture, which can be defined as unified, cohesive and adaptable. There’s a strong emphasis on keeping employees happy, healthy and ensuring their mental well-being.

Company B has a lousy culture, which is polarized and employees are at odds with one another. It’s more of a cut-throat culture where team members are under perpetual stress and feel undervalued. The employer doesn’t really care about their employees’ health, happiness, etc., and is consumed solely by maximizing profits.


How Company Culture Affects Productivity

Which company do you think will be more productive?

It’s safe to choose company A. When you put it all together, company A is pretty much guaranteed to have happier and better-adjusted employees than company B. Research shows a definite link between employee happiness and profit.

There is an infographic from Growth Everywhere that puts things into perspective. It states that companies with happy employees:

  • Outperform the competition by 20 percent
  • Earn 1.2 – 1.7 percent more than peer firms
  • Are 2.1 percent above industry benchmarks


They also state, “Happiness makes people 12 percent more productive, and unhappy workers are 10 percent less productive.” Quantifiable data such as this makes it abundantly clear that company culture does in fact impact productivity in a big way.


Common Issues Associated with Poor Culture

If your culture stinks, it can hurt your business in several ways. There are five specific issues that are the most profound.

  • Stress
  • Health problems – “Health care expenditures at high-pressure companies are nearly 50 percent greater than at other organizations.”
  • Disengagement
  • Absenteeism – “Disengaged workers had 37 percent higher absenteeism.”
  • Increased turnover


The Benefits of a Great Culture

On the other hand, a positive company culture means happier, healthier, more engaged employees. They’re more unified and actually get something out of their jobs. They view it as more than just a means of earning a paycheck and are truly invested in the company they work for. Often, there’s a sense of loyalty to their employer and they’re genuinely compelled to work hard.

When you put all of this together, it means one thing — increased productivity. It goes without saying that having a productive workforce will positively impact your company in a host of different ways. This ultimately leads to increased revenue and a better overall bottom line.

Getting an HR Administration Group Can Strengthen Your Corporate Culture

Corporate culture is something that shapes the personality of your business and affects how customers, clients and the public in general perceive it. According to Entrepreneur, corporate culture is defined as “a blend of the values, beliefs, taboos, symbols, rituals and myths all companies develop over time. It describes and governs the ways a company’s owners and employees think, feel and act.”

While a strong corporate culture puts your business on the fast track for success, a weak one can have just the opposite effect. In this day and age, there are a few ways to strengthen your corporate culture and establish a cohesive workforce. One of which is through an HR administration group.


Let an HRO Handle Your HR Administration

A human resources outsourcing (HRO) firm is designed to aid in a variety of administrative tasks and simplify your job as a business owner. Whether it’s establishing new hire procedures, creating company policies or performing employee evaluation, an HRO is there to provide a customized solution to HR administration. When you combine all of these functions, it can ultimately improve your company culture in multiple ways. Here are some examples.


Recruiting Top Talent

A key element to a strong workforce is talent acquisition and retention. An HRO will help you create or adjust policies for finding and hiring top tier talent in your industry. Experts will assist you through all phases of the process, while simultaneously ensuring that you remain compliant with OSHA and EEOC regulations. A firm will understand what it takes to build a quality team of professionals while taking into account employee chemistry.

By finding the right people who “buy in” to your company, it’s a natural way to create an excellent culture over time. All the while, you still have ultimate control over who you hire and terminate. An HRO just simplifies things and increases your chance of success.


Streamline Employee Development

Regardless of how skilled and experienced a new hire is, you want to do everything in your power to hasten their development. Allowing a third party to assist with HR administration is helpful because they can equip employees with everything they need to thrive. This could include preparing instructional materials, on-site training and virtual training.

They may even train managers on topics like regulatory compliance and workplace safety to minimize complications. The personalized service of an HRO creates a framework for your employees to grow and capitalizes on each individual’s specific talents. In turn, you can extract the very most from your workforce and get them to work as a close-knit unit.


Team Performance Evaluation

Because even the best employees have some room for improvement, monitoring their performance is a good idea. An HRO helps your business dramatically in this area because they can implement customized performance evaluations. If there is a behavioral issue or a lack of engagement, they can pinpoint a minor problem before it becomes major. They can then provide employees with the necessary feedback to resolve an issue and suggest ways to improve.

At the same time, an HRO can highlight the strengths of your workers so you can get the most from their talents. This way you can assign employees to the jobs they’re best suited for and build a strong foundation.

If you place an emphasis on corporate culture, it would be wise to consider getting an HR administration group. Not only can it make your workforce more efficient, but it also reduces your tasks so you can focus on other areas and expedite the growth of your business.

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