Creating an Organizational Culture That Encourages Employee Motivation and Retention Culture

A company’s culture is the distinctive, unwritten, informal code of conduct that governs its behavior, attitudes, relationships, and style. It is the essence of “the way we do things around here.” In many small companies, culture plays as important a part in gaining a competitive edge as strategy does. Culture has a powerful impact on the way people work together in a business, how they do their jobs, and how they treat their customers. Company culture manifests itself in many ways—from how workers dress and act to the language they use. Although it is an intangible characteristic, a company’s culture has a powerful influence on everyone the company touches, especially its employees.

An important ingredient in a company’s culture is the performance objectives an entrepreneur sets and against which employees are measured. If entrepreneurs want integrity, respect, honesty, customer service, and other important values to be the foundation on which a positive culture can flourish, they must establish measures of success that reflect those core values. Effective executives know that building a positive organizational culture has a direct, positive impact on the financial performance of an organization. The intangible factors that make up an organization’s culture have an influence, either positive or negative, on the tangible outcomes of profitability, cash flow, return on equity, employee productivity, innovation, and cost control. An entrepreneur’s job is to create a culture that has a positive influence on the company’s tangible outcomes.

Sustaining a company’s culture begins with the hiring process. Beyond the normal requirements of competitive pay and working conditions, the hiring process must focus on finding employees who share the values of the organization. In winning workplaces, small companies “treat workers fairly, often generously; respect their personal lives; provide opportunities for development, and endow their jobs with meaning and fun,” say the editors of Inc. magazine, “In return, those employees bestow their best ideas and efforts on the business. They pull together through change and hard times.”