Understanding The Corporate Culture And Employee Performance Business Essay

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A great strategy is no guarantee of long-term business success. Many other factors impact organizational performance. One such factor is corporate culture which helps an organization create a high performance environment which supports business strategy implementation. Because culture is so important to the success of a firm, so organizations need to increase their proficiency at impacting culture.

Employees are the greatest asset of an organization and success and failure of the organization depends upon the performance of these employees. If the culture of the organization is not proper and transparent then the employees feel dissatisfied from their jobs and it leads to high attrition rate as corporate culture matters most to the employees. High attrition rates affect an organization negatively that results in poor performance of the organization. Attrition due to the work environment is typically due to a lack of trust in the fairness of the system, issues around safety and care of employees, effectiveness of the channels to address employee grievances, accessibility of the senior management team and other related environmental issues. Employees leave the organizations because they are not satisfied from their current job. The reason for this dissatisfaction from the job can be many but the major reason is the improper corporate culture.

A study from Harvard Business Review Suggests that Low growth potential, Lack of challenge, Lack of autonomy, not enough money and Work environment issues are the major reasons people are dissatisfied with their jobs.

Most people complained that they weren't making enough money, or their work went underappreciated, or they felt their career wasn't going anywhere. Most people were dissatisfied from their bosses.

So we can see that all the above reasons that lead to satisfaction or dissatisfaction of the job are the factors that make the corporate culture. So the corporate culture is an important factor in organization's success because it is directly linked to the job satisfaction. Job satisfaction and job performance are correlated. Higher job satisfaction leads to higher performance by the employee in his job.

The purpose of this paper is to understand how the corporate culture impacts employee performance.

Understanding Corporate Culture:

Corporate culture consists of the values, attitudes, assumptions, beliefs and norms that influence the ways in which the people in an organization behave; how organization treat its employees, customers and stakeholders and the way organization conduct its activities. organization's culture will depend on factors that will include national culture, the business culture of the nation, the culture of the industry of which the firm is a part and organization-specific factors, like the size and nature of the business, the style of leadership and the structure.

Trompenaars' dimensions of culture framework

Elements of Trompenaars' framework Trompenaars (1993) and Trompenaars and Hampden-Turner (1997) devised an alternative model that can be used in the analysis of culture. It comprises three groupings of cultural factors:

. Relationships with people

. Attitude to the Time

. Attitude to the environment

We will focus on the first factor that influence the employee behavior.

Relationships with people

This dimension concerns how people relate to each other within a culture.

Universalism versus particularism

Universalism versus particularism focuses on the importance of rules, as opposed to relationships, in determining behavior. There are two variants. A universalist culture is one within which rules determine behavior and the favoring of friends or relations is not accepted. A particularist culture, on the other hand, is one where obligations to friends and relatives are

important and must be observed in business. In Chinese culture, for example, the concept of guanxi (friendship) underlies many business relationships and activities. For the Chinese, friendship is a vital component of business relationships. Friends must always be favored in business dealings.

For this reason, the building of relationships is essential to successful business in China, a fact often overlooked by Western business people who are used to a Universalist culture. In Western cultures, favoring friends and relatives is often opposed on the grounds of inequality of opportunity. In employment, for example, it is expected that people will be given equality of opportunity and will be appointed to posts on merit not on the basis of friendship or kinship.

Individualism versus communitarianism (collectivism)

This dimension corresponds to Hofstede's individualism versus collectivism and relates to the extent to which people stress individual or group needs. An individualistic culture is one within which self-interest; self-reliance and individual effort are predominant. Communitarianism, conversely, stresses the need for group harmony and the expectation that the group will take

care of its members.

Affective versus neutral cultures

This dimension concerns the extent to which people may show emotions in communications. In an affective culture people are expected to show their emotions whereas in a neutral culture emotions must be controlled and subdued. In Japanese and Chinese cultures public displays of emotion are rare and are found embarrassing, so that these cultures can be regarded as neutral. Southern European cultures are, in contrast, far more affective whereas Northern European cultures are more neutral, but are nevertheless more affective than the Chinese and Japanese cultures.

Specific versus diffuse relationships

The extent to which people have relationships in more than one area of life is described as either specific or diffuse. A culture where relationships are only in specific areas of life (e.g., work) is known as specific. A diffuse culture is one within which relationships exist in multiple areas of life (e.g., they can span work and leisure).

Achieving versus ascribing status

This dimension centers on how far status is accorded on the basis of achievement or ascribed on the basis of age or seniority. An achieving culture is one where status is based on a person's achievements, while in an ascribing culture status is based on seniority, age or class. American

culture is usually considered to be an achieving culture whereas Chinese and Japanese cultures are more ascribing in nature.

How to Motivate Employees for higher job performance by changing the Culture:

Providing and facilitating the right working environment is critical to motivate employees given the nature of the work. This includes providing a safe and secure workplace to all employees and transparency and objectivity in performance management, compensation and promotion policies to build and maintain confidence.

If the organizational culture is not suitable, employee doesn't feel motivated to perform their work effectively. Many studies have shown that money is not the only reason people like their jobs but workplace environment is far more important. Most of the causes and costs of workplace frustration, anger, and anxiety can be prevented. In an ideal workplace, employees are internally motivated and self-regulating because they are hired with care, placed in jobs that serve them as well as the company, and supported with the resources required to accomplish their jobs.

When companies treat employees with dignity and make efforts to empower them, employee self-confidence and performance grow.

The EEE-Model

Exposure, Experience and Education are three things which are vital to any employee in any sector or industry. These needs of the employees are needed to be taken care of for an employee to feel motivated.

Building relationships

Relationship with the employees is the greatest factor that influences the employee performance to a great extent. If the employees are close to their bosses they feel more motivated. So a manager should focus on building positive relationship with his employees by means of communication. Relationship is something which lasts over time. So, if a company needs to hold on to its employees, it needs to build a strong bonding with the employees. There is a need to instill pride in the employees. They need to be shown that the work done by them is important. That would give them a feeling that they are working for themselves and that they are an inseparable part of the company.

Because in an organization, relationships are built for the aim of getting higher performance, so it should be communicated to the employees that what they are expected to do. Employees should feel like humans that create value for the organization rather than human machines that are being used for fulfillment of organizational objectives. If manager treat his employees with great respect and dignity then employee develop a feeling of respect toward the manager and organization and think that they are the part of organization and feel motivated. Manager should be able to interpret the organizational goals to the employees. And he should make sure that they are going in same direction toward achieving the strategic objective the organization. Motivation and communication between the seniors and the employees through feedback sessions, meetings, etc., is very important as it helps to find out the problems being faced by them.

The employees who work under poor bosses are less likely to give the extra effort asked of them when it is needed most. These employees are less likely to take on additional tasks and are generally less satisfied with their jobs.


Nothing can substitute for frequent communications from top management on the state of the business, future business plans, promotion policies, fun in workplace programs and such. The employees are given freedom to freely interact with their seniors. Experience has proven that there is no risk of over-communicating. Occasional face -to- face meetings combined with other methods of employee contact work well to keep employees connected to the organization and go a long way in building loyalty to the organization. If there is frequent communication with the employees, they feel as the important part of the organization and focus more on their jobs.

Teamwork and innovation 

The importance of corporate culture is growing as the result of several recent developments. Companies are encouraging employees to be more responsible and act and think like owners. They are also encouraging teamwork and the formation of teams as a strong culture is one in which they work together effectively, share the same values, and make decisions to meet the organization's primary goals and objectives.  A company must cultivate a creative corporate culture that provides employees with freedom to innovate, freedom to take decision where necessary.

Managers and Bosses should be the captains of your organizational team. They should be great motivators, innovators, and leaders, who inspire the team members they supervise to achieve great things. These managers understand how to treat employees fairly and with respect, and more importantly understand why it is important to do so. Managers who do this in turn breed new leaders for the organization who will follow the example set forth by their predecessors.

Learning environment:

One of the reasons, employee doesn't like their job is that they don't learn anything from their job. They find themselves doing same routine work on daily bases. This make them frustrated. They want some change. So the organization should take this into account that employee does not restrict themselves with routine works. There should be some challenges in the work environment that create interest in employees for their work.

Equal opportunities:

Corporate culture should be as there are equal opportunities to grow and learn for everyone. There should not be any distinction between the employees based on gender or any other factor. Performers should be rewarded to motivate them for doing their job with the consistency.

Adaptation for new joinees

A new entrant is introduced to the culture of the company during the recruitment stage itself. Culture also includes external influences like working environment, architecture, interior design; transitional influences: office politics, dress codes, social events; and internal influences: equal opportunity, diversity and benefits. It is important that every employee should align with the company's culture and hence the organization should have proper training programmes for the new recruiters to guide them.

Fair Policies and Practices

The overall compensation and benefits package should be competitive at all levels for the employees to maintain its declared market positioning. Employees at any point of time shouldn't feel that they are paid less for their efforts. So very organization to match the compensation packages with the skills.

Career opportunities

Organizations should establish career paths and maintain standard guidelines for promotions and growth. Posting job openings internally provides employees opportunities for job rotation instead of looking outside the company for new and different roles.

Training and development

Employers should provide sufficient and meaningful training and development opportunities and link attendance at such programs to the performance management system. Further, it is helpful to provide advanced education opportunities (subsidized or free) to those aspiring to study further without having to lose their gainful employment.

Role of HR 

HR plays an important role in the culture of the organization as it has to understand and communicate with both the management and the employees. HR explains to the employees why the management is doing so and briefs the latter what are the expectations of employees e.g. employees want to be a part of the decision-making process. Since, culture is an important factor for the success of a firm, human resources professionals need to increase their skills in impacting culture. 

While corporate culture is not necessarily the responsibility of HR, the people who are hired and the training and cultural imperatives placed on the business are done through HR, hence it can have a big impact on whether or not the firm is culturally attuned to innovation. Over time, one can argue that innovation is a sustainable competitive advantage, and that businesses that attract and retain creative, innovative people and implement a culture that sustains innovation, will possess a strong competitive advantage. If so, HR will have a huge impact on that company and its culture.