The Impact of Employee Engagement on Organizational Culture

High-Performing Cultures

Lately you’ve been noticing James has been late to meetings and does the bare minimum when it comes to putting together quarterly finance reports. From your office you recall noticing Cindy scrolling through social media even though there are project deadlines around the corner. You’re beginning to think your employees don’t care about your business. That they don’t mind whether it prospers or sinks to the ground. Chances are your suspicions are right, but what should worry you more is that its probably your fault.

The problem here is employee engagement. Your employees are likely detached from their work, and the reason for this is in the culture, the lack of it, or simple misalignment of it. Culture, the driving force behind how and why your organization does what it does, is what determines employee engagement. But before we dive into that, it's best we set the stage by really discussing what employee engagement actually is.

Employee Engagement

Employee engagement is a measure of the level of commitment, dedication, and enthusiasm that employees have towards their work and their organization. You can see engaged employees by the way they are willing to go above and beyond their job responsibilities. You see it in how they take proactive steps to contribute to their team's success, and are committed to the overall success of the organization.

A culture of engagement often refers to an environment in which the organization fosters the necessary connection between employees and their work, their colleagues, and the organization as a whole. This is likely to look and feel different depending on the type of organization and culture at hand, but make no mistake, without optimizing the culture, there is little to no employee engagement.

So What Is Company Culture?

First things first, it must be noted that there is not one set definition of culture. Organizational culture is a complex and ever-evolving concept that has many different components and interpretations. There is no single definition of organizational culture that has been agreed upon by the many professionals within the field, but there are a range of definitions that help us understand its various elements.

Organizational culture is shaped by various factors, including the company's mission, vision, values, and assumptions, as well as the behaviors and attitudes of its employees. It is the way employees perceive, think, and feel about the organization.

For instance, imagine a company that values innovation and risk-taking. Its employees are encouraged to take chances and think outside the box. As a result, employees are more likely to feel empowered and motivated to pursue creative solutions to problems, which can lead to more successful outcomes.

Taken further, the way in which employees perceive, think, and feel about the organization are largely influenced by the basic assumptions they make about it. Assumptions are inferred from cultural artifacts and are passed on to new employees which then shape the company's culture over time.

Take for instance, a new employee joins an organization/company and notices that everyone is always working long hours and responding to emails outside of work hours. The new employee may assume that the company values and expects this type of behavior, and may start doing the same. Over time, this behavior becomes ingrained in the company's culture, even if it was never explicitly stated as a value or expectation.

That is the general gist of Organizational Culture. It is like a jigsaw puzzle made up of many pieces - the mission, vision, values, assumptions, behaviors, and attitudes of employees. All of these factors shape the way employees view the organization, impacting their motivation and performance. In other words, the culture of a company can make or break its success. Moving on, we're going to dive into the importance of employee engagement, a crucial element of organizational culture, and how it can have a profound impact on overall organizational outcomes. So, stick around!

Employee Engagement and Organizational Outcomes

Employee Productivity

It’s that laser focus you pick up on after noticing Jacob’s eyes glued to his data sets, tirelessly analyzing the numbers for hours on end. It’s what every exec, owner, manager and supervisor loves to see (within good measure of course).

According to a study conducted by Gallup, highly engaged employees are 21% more productive than their less engaged counterparts (Gallup, 2021). This improved productivity is a result of engaged employees being more motivated, more committed, and more focused on their work. Engaged employees are also more likely to go above and beyond their job requirements, which can lead to improved customer satisfaction and loyalty.

Employee Absenteeism and Retention

Too many companies have too many empty desk spaces week-in, week-out. Are employees falling ill more often than past generations? Not really. Are more employees getting poached by rival companies than they were in the past? No not at all. The truth of the matter is they just don’t want to come in and stay in the office these days. Companies are not prioritizing their employees experiences of work in a way that makes them feel appreciated and valued, and the results of that are being seen in the recent Great Resignation that we recently witnessed in the Western world.

The cost of employee turnover is a huge expense for organizations. It can cost up to 50-60% of an employee’s annual salary to replace them . Companies with a highly engaged workforce, however, have much lower turnover rates than those with disengaged employees. Engaged employees are more likely to stay with their current employer and are less likely to be actively seeking other job opportunities. Why? Because they love their work and their space. They feel heard and that their work means something to the company’s success.

Company Profitability

When the employees within the company care about their work, their energy and efforts are often reflected in the company's financial statements. According to a study by Towers Watson, companies with high levels of employee engagement had a 19% increase in operating income compared to companies with low levels of engagement (Towers Watson, 2012). This increase in profitability was found to be due to a variety of factors, including reduced turnover, improved employee satisfaction, and increased innovation and creativity. These cultural factors drive employees to take full responsibility for their work because they would have grown to have a vested interest in the success and profitability of the organization they work for.

In closing,

The importance of company culture on employee engagement cannot be overstated. As we have shown, companies that prioritize employee engagement tend to experience better outcomes across a range of measures, including reduced employee absenteeism and turnover rates, increased productivity, and improved company profitability. By placing a greater emphasis on fostering a positive workplace culture and supporting employees, organizations can create a more engaged and committed workforce. This, in turn, can lead to improved performance and ultimately, greater success for the company.