What Is the Relationship between Organizational Culture and Performance?

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  • Written By: Geri Terzo
  • Edited By: PJP Schroeder
  • Last Modified Date: 15 February 2018
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Organizational culture and performance are linked because the former is designed in part to motivate employees to exhibit behaviors that lead to the best possible results for the employer. Working conditions, such as dress codes and hours spent in the office, are both part of a company's culture. When these expectations become clear and acceptable to employees, confidence and certainty are the result, and management can more likely optimize performance. Of course, executive teams consider these motivations prior to introducing new personnel as they look for employees who are most likely to adapt to a corporate culture.

Leaders of a corporation typically set in motion the culture of that business. Although managers have certain expectations in terms of employee behaviors, they do not always explicitly define those objectives. This goes beyond job performance and extends into the way that personnel treat and respond to one another and various situations.


Even though employees are expected to adhere to the culture established by management, the implementation of any standards would not be effective without the willing participation of the staff. Dissatisfied employees could interfere with an organizational culture and performance may subsequently be adversely impacted. As a result, it is not uncommon for corporate leaders to accept feedback from staff members about the culture that has been developed at an organization. Employees are likely to feel respected due to this provision, and this sentiment could very well spill over into other areas of performance, including creativity and motivation. In this way, organizational culture and performance are linked.

It's possible for an organizational culture to directly impact the bottom line, or profits, at the business. If the overall tone of a corporation is to reduce expenses, for instance, this should have a direct impact on the way that employees treat different scenarios. It could lead to decisions that avoid travel and attending conferences, for instance, but it could inspire creative ideas for ways to collaborate with other professionals in remote locations.

Management needs to communicate with the staff in order for the culture to be thoroughly understood. Through meetings, electronic mail, or conference calls, executives relay the organization's overall goals, which could be financial or service related. By sharing the broader expectations for the corporation, this could establish an environment in which employees are more prone to setting and achieving specific goals, which could improve overall performance. Creating an environment where individuals are encouraged to join internal committees for various corporate events could promote a team environment, which in turn could have a beneficial impact on performance.



Discuss this Article

Post 3

The organization I work at has very poor communication. Most of the time, we don't even know where people are and people answer emails whenever they feel like it. This is why our performance is bad.

Post 2

@ysmina-- We have these type of activities at our organization and it definitely makes a difference in performance.

There are many different factors that contribute to performance at the workplace. I think among them, the most important are communication, feedback and recognition. Activities outside of work can improve how employees interact with one another in the office.

Also, these type of activities emphasize each employee's role in the organization. So employees start to take more interest in the success of the organization and this improves performance as well.

Post 1

We're planning on putting together outside-of-work activities for our employees at my organization. It could be a picnic on the weekend, or may be a get together at a restaurant or a bowling alley.

We want to give employees, as well as supervisors and managers an opportunity to interact outside the office. Hopefully this will motivate the employees and reduce conflict at the office and performance will improve.

Has anyone else tried something like this at their organization? Did it work?

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