4 Human Resource Methods That Improve Corporate Culture
When one considers corporate culture and where it comes from, he or she might first think of top-level management. One might assume that the CEO, business owner, or executive team is responsible for creating the culture of an organization. This assumption, however, leaves out an influential part of any organization that plays a huge role in shaping, sustaining, and improving company culture: human resource management.
Before we continue, we must address one question: what is “corporate culture”? As the Human Resources Social Network explains, “Culture defines the proper way to think, act, and behave within an organization.” According to Investopedia, “Corporate culture refers to the beliefs and behaviors that determine how a company’s employees and management interact and handle outside business transactions.” It’s important to discuss culture with the understanding that it refers to the way members of an organization are implicitly or explicitly expected to interact and behave.
Why Is Culture Important?
Corporate culture plays a huge part in the success of an organization and can profoundly affect its performance, both positively and negatively. An organization’s culture affects employee retention rates, as well as its ability to recruit new talent. Research has found that culture affects productivity, creativity, work-life balance, and even things such as safety, accident rates, and the process of recovery after missteps or mistakes are made as part of the organization’s operations. When an organization attends to its culture and makes managing and maintaining it a priority, the results can pay dividends across every aspect of the organization’s performance.
HR’s Role in Company Culture
There are many ways that an HR department or staff can affect company culture. Feedback, pay, training, and recruitment are just a few examples.
One of the most important areas of culture cultivation that HR can facilitate is feedback. HR can help inspire and facilitate huge changes and improvements through the collection, dissemination, and utilization of critiques from employees. According to a blog post published by the Society for Human Resource Management (SHRM), collecting employee feedback and making use of the improvement opportunities it offers is a make-or-break practice that can either improve company culture over time or, in the absence of such efforts, corrode company culture and allow it to become a negative aspect of the organization. The SHRM suggests that HR departments make sure they conduct ongoing efforts to collect feedback (e.g., surveys, focus groups, forums, suggestion boxes, etc.) from employees and then ensure that feedback reaches the upper levels of management in a way that is received, accepted, and acted on. In other words, it is vital that subordinate feedback not disappear into a vacuum. Over time, failure to act on feedback to improve culture or employee experience may cause resentment, make employees cynical, and negatively impact morale. HR plays a critical role in ensuring the continual improvement of company culture by creating and facilitating a feedback mechanism.
Another method Human Resources can employ to shape company culture is using bonuses, cash prizes, salary increases, and other forms of monetary compensation to reward desired behavior. The converse—imposing fees, postponing or canceling bonuses, or fines to punish or discourage undesired behaviors—also applies. Structures that offer monetary benefits for certain actions or results can be a powerful method of changing employee behavior and can have significant impacts on company culture. This method, however, should be used with caution. Because of the powerful influence of pay-based incentive programs, their effects can backfire and negatively affect to corporate culture if not properly controlled and if they encourage behavior that was not intended by management. For example, a well-known auto repair business paid mechanics bonuses based on the size of the repair bill; this encouraged mechanics to perform unneeded repairs that eventually cost the company millions in legal fees.
Training resources and programs can impact a company’s culture in several ways. First, the training (or lack thereof) provided for new hires is one of the key periods during which corporate culture will be introduced and reinforced. Training is often the new hire’s first experience as a member of the company, and this experience will be the lens through which the employee will view all of his or her following experiences as a member of the organization. HR should take advantage of this opportunity to instill positive, clear notions of existing culture and how that new employee can become a part of it.
Another way training can influence company culture is simply by offering quality professional and personal development opportunities to an organization’s employees. By offering these opportunities, a company can demonstrate that it desires to invest in its employees personally rather than simply employing them to complete a specific task. This can fundamentally improve morale and the way employees think about their relationship with the company.
Offering or mandating safety trainings and protocols can also improve company culture. This shows employees that their safety is valuable and also instills the notion that the company is interested in doing things correctly rather than cutting corners and thus potentially endangering products, processes, and people.
A huge way that HR can affect the overall corporate culture is by recognizing the significance of its role in attracting and hiring new talent. The culture of an organization is created, maintained, and manifested in its employees. By developing strategies to find not only people who can fit a job description but people who can fit well within a company’s culture, HR can build and reinforce the culture of an organization over time by strategically developing its processes for choosing who becomes a part of the organization in the first place.
HR plays a huge part in the development and maturation of an organization’s corporate culture. By intentionally doing things to improve that culture, HR can play a monumental role in the ultimate stability and success of the organization.
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This article was created thanks to the insights of Dr. Chester Spell, Professor of Management at Rutgers University