The Definitive Guide to Company Culture

Company culture isn't just a vibe or a corporate buzzword—it's the bedrock of your business. If neglected, it can get a little out of control. But with the right care and guidance, a healthy culture can grow throughout your workplace and become one of your company's biggest strengths.

Not only does your culture affect current employees, but it also helps you create a positive employer brand that attracts top candidates. It's no wonder work culture is top of mind for HR professionals today.

Our State of HR report found that 27% of HR pros are worried about how hybrid and remote work impact employee experience, performance, and connection, and 23% are concerned about creating a company culture that stands out. If this sounds familiar, you've opened the right ebook.

Read on to learn more about what company culture is, who's responsible for it, and how you can develop an organizational culture that gives you a competitive edge.

What is company culture?

Company culture describes the way colleagues think, act, and interact together. From how different departments share information to whether taking time off feels more taboo than accepted, your company's culture is what's considered "normal" in your workplace on any given day.

Think of it as your organization's personality—and just like your personality, it's multifaceted.

Your culture is guided by a shared set of workplace attitudes, beliefs, behaviors, purposes, standards, and values. Having a good culture means different things to different companies, but the end goal is the same: a healthy work environment that inspires people to work together, treat each other well, and get things done.

What is not company culture?

Work culture is often confused with other company features or office amenities. While culture may intersect with other aspects of your company, it's more about your people than anything else—how they feel, behave, and interact.

Here are a few examples of what company culture is not:

• Company culture isn't trendy perks. Making yoga classes and mental health resources part of your benefits package is an excellent way to support your employees, but culture is much more than the perks you offer.
• Company culture isn't fun activities. While Table-Tennis Tuesdays and yearly company retreats are certainly fun ways to bond, these don't equal company culture either.
• Company culture isn't your corporate brand. Your customers may identify with your public-facing brand, but your employees are immersed in your culture each day.

There's no recipe for the perfect company culture, and no two cultures are exactly alike. Yours is defined by the written and unwritten rules your people follow, and is influenced by your organization's leadership, goals, workforce characteristics, and other unique factors.

Company culture vs. company values

Every organization has a culture, whether they realize it or not. Even if you don't do anything to nurture it, culture develops organically based on how people interact. Company values are the guideposts that keep your culture on track. It's easier to maintain a healthy work environment when it's backed by a set of principles everyone understands and follows.

6 key benefits of creating a positive company culture

Having a strong company culture that treats employees right can do a lot more than give you a warm, fuzzy feeling.

There are enduring benefits that come with fostering a strong company culture, including:

• Improved employee engagement and morale
• Better productivity, creativity, and innovation
• Reduced turnover and associated recruiting and training costs
• Excellent customer experiences and satisfaction
• Increased revenue and profits
• Greater interest from top talent

A vibrant company culture is good for business. Creating a culture of engagement strengthens the relationships between your employees and their leaders, peers, and customers. Better engagement is linked to greater profits, productivity, and customer loyalty.

In terms of recruiting strategy, linking your culture to your employer brand also helps attract the kind of talent your company needs to thrive. Since 70% of new hires decide whether a job is the right fit within the first month, creating a company culture that makes people want to stay long-term helps you maximize your recruiting investment in a big way.

Not to mention, your customers care about how you treat your employees. Aligning your internal culture with your public-facing identity shows people that the brand they know and love is just as good on the inside as it is on the outside.

4 types of company culture

Companies define their workplace culture in different ways. No one style is inherently better than the others. Each one comes with potential advantages and disadvantages, and yours may be a combination of a few.

Here are the four most common company culture types:

1. Clan culture: "Join our family"

In a clan culture, you're one of the family. Your coworkers are a tight-knit group of supportive, like-minded people, and your managers act more like mentors than bosses. The organizational hierarchy only has a few tiers, and everyone's invested in the company's core objectives.

Clan company culture examples: Startups and mom-and-pop stores often have a clan culture since they're small enough to foster a more familial atmosphere.

2. Adhocracy culture: "Be innovative"

Adhocracy culture is focused on innovation. Employees are encouraged to think outside the box, take risks, and push the limits of what they think is possible. Companies with this type of culture rely on highly agile teams to constantly adapt and develop new products or services.

Adhocracy company culture examples: Tech companies often have this type of work culture. Technology rapidly advances year over year, so a fast-paced, forward-thinking environment helps these companies thrive in heavy competition.

3. Market culture: "Get results"

A market culture is competitive, prioritizing results and business objectives over community. Employees are less focused on team building and experience than they are on achieving lofty goals and financial targets. Team leaders demand excellence, setting clear expectations that keep everyone on task and rewarding top performers.

Market company culture examples: This type of company culture is generally found in larger corporate businesses driven by financial success.

4. Hierarchy culture: "Go by the book"

Hierarchy cultures are more traditional and have a structured chain of command. Employees and leaders follow strict protocols, adhering to a set of established rules that help ensure everyone does things "the right way." A pyramid with several layers of power guides this organization, ensuring diligent oversight.

Hierarchy company culture examples: The typical restaurant kitchen is a great example of this culture. It's also found in government agencies and other regulated industries.

What makes each work culture unique?

If your culture differs from the most common few, don't worry. There's no super-secret formula for building the perfect work culture—it varies across organizations, industries, and even individual departments and teams.

Yours depends on the traits unique to your organization. For example:

• Leadership and decision-making principles
• Team expectations and communication styles
• Company mission, values, and goals
• Desired employee experience
• Customer needs and expectations
• Business type and industry
• Interpersonal dynamics

Remote and hybrid work arrangements can also make a difference in one company's culture over another. And as your organization grows and changes, its personality will inevitably evolve, too. So the workplace you've built this year may look entirely different 10 years from now.

Microcultures in the workplace

In a broad sense, your company's culture paints a picture of how your business works as a whole.

But if you dig a little deeper, you might find that it's actually made up of several microcultures. These are the niche subcultures within your organization that develop as different teams do things in different ways.

This may seem like a divide, but Deloitte finds that cultivating microcultures can serve as a way to better connect and support an increasingly diverse workforce that spans generations, locations, and remote work arrangements.

The key is to bind all those subcultures under a set of unifying principles that help keep everyone moving in the same direction.

Company culture through the generations

Most people, no matter their age, rank company culture as the most important part of the workplace––and the top reason they stay with a company.

However, each generation's background and life stage shape their opinion about what drives them at work.

One of the biggest challenges of managing a multigenerational workforce is creating a culture that welcomes people with diverse skills, qualifications, and perspectives. Yours could be enticing certain people to stay while pushing others away.

Here's a quick look at what different age groups typically want in the workplace:

• Gen Z are less concerned with pay than other generations. They’re most likely to want new business and learning opportunities.
• Millennials want to focus on their leadership and management skills.
• Everyone wants flexibility, but don’t lose sight of your older workers’ needs.
  • Baby Boomers see flexibility as having autonomy in their work.
  • Gen X wants time to care for their family and themselves.

The majority of employees are Millennials. They'll likely dominate for many years to come, but not forever. Gen X overtook Baby Boomers as the largest generation in 2011, and Gen Z will surpass Baby Boomers as more people retire.

Having an agile culture strategy can help your company adjust its approach based on the most current workforce trends and demographics.

Company culture across the globe

If your workforce is spread out across multiple countries, how does your company culture translate?

Many European and Nordic countries may have topped the charts as being some of the happiest countries on Earth, but the workplace tells a different story.

Gallup finds that employee engagement is significantly higher in the US and Canada than in Europe, along with other regions.

Note: This data only includes the top and bottom regions; other regions were excluded from the original source for ease of reading.

On the flip side, Europe and the Nordics has historically been one step ahead of the US in promoting work-life balance. UK workers, for example, get upwards of a month of PTO each year. France has a "right to disconnect" law that prohibits employers from forcing people to work beyond their normal hours.

Incorporating generous company policies that promote a culture of rest and wellness can help make your organization more appealing to talent both inside and outside the US.

Examples of positive company culture

Organizations with good cultures don't all operate the same way or fit a single type, but they do share a few common characteristics.

Great work cultures set the tone for the entire workplace by doing the following:

• Instilling trust: A culture of trust helps employees feel comfortable talking openly, whether it's sharing constructive feedback or speaking up during team meetings.
• Embracing diversity and fairness: Hiring different types of people and prioritizing inclusivity invites new perspectives within the workforce and creates a sense of belonging.
• Creating a sense of psychological safety: Psychologically safe workplaces are typically calm, positive, and inviting settings where people feel valued and respected.
• Engaging employees: Promote performance, growth, and loyalty by providing meaningful learning opportunities and ensuring everyone feels heard.
• Helping new hires feel welcome: Provide the tools, training, and guidance new hires need to settle in and do their best from the first day of onboarding.
• Recognizing and rewarding hard work: Regularly provide employees with helpful feedback and sincere appreciation for a job well done.
• Preparing for the future: As an industry or workforce changes, proactively adapting to your employees' needs and interests helps sustain each person's success.

You can learn a lot about how to build a positive company culture of your own from the businesses that do it best. One way to learn about different company cultures is to read employee reviews on lists like Glassdoor's Best Places to Work and Great Place to Work^®.

You can also go straight to the source—many successful companies promote their workplace culture models on their websites and social media platforms to help attract talented job candidates.

Examples of negative company culture

As much as a positive company culture can help employee retention and satisfaction, a negative culture can breed employee turnover and conflict. It can also damage your brand's reputation, hurt your recruiting efforts, and create an environment where people feel unsafe.

Work culture red flags include:

• Core values that go unfollowed or don't exist
• Unchecked office gossip or employee criticism
• Unfriendly competition between teams
• Employees feeling undervalued or unacknowledged
• Glaring inconsistencies between what employers say and do
• Employees frequently working during lunch breaks and personal time

Unhealthy cultures can also yield physical and mental side effects. According to the American Psychological Association (APA), high-stress or toxic workplaces can lead to depression, heart disease, and other illnesses. If a dysfunctional workplace leaves room for harassment, bullying, or discrimination, employers may face serious legal repercussions, as well.

The good news is that organizational culture isn't static—you have the power to recognize underlying issues, create a pattern of accountability, and change a bad company culture for the better.

Frequent workplace wellness audits help employers discover problems and implement programs to repair and improve employee wellbeing and regain trust.

Building organizational culture

Some elements of company culture are easier to shape and guide than others. Fostering a vibrant culture doesn’t require complete control of employees’ lives—all you need is collaboration.

Who is responsible for creating culture?

Everyone plays an important part in promoting a great work culture. When employees, managers, and executives unite their efforts—and also take full advantage of HR’s participation—they can make more progress together than they ever could separately.

Here's what this looks like for each department:

HR

First, let's shine the spotlight on the link between your company and its people: HR professionals. You’re the ones who quietly do much of the heavy lifting that keeps company culture and values moving forward.

Some of this work includes:

• Helping leaders define company culture and adjust as it evolves
• Suggesting strategies that align culture initiatives with organizational values and goals
• Maintaining open communication and feedback on how to improve company culture
• Attracting job candidates who strengthen and diversify the workplace
• Making values and culture the heart of onboarding and everyday employee experiences
• Rewarding and recognizing employee behaviors that support a healthy, balanced culture

HR teams may not always get as much credit as they deserve, but as BambooHR cofounder Ben Peterson explains, “HR is the company’s greatest advocate of values because they're so uniquely positioned within the company to have the greatest impact.”

Executives

To borrow a quote from the Spider-Man comics, “With great power comes great responsibility.” The people within the C-suite may not be Marvel superheroes, but they have a responsibility to strengthen their company's culture and core principles through leading by example.

As key decision-makers, executives are in charge of:

• Establishing an organization’s values
• Approving company culture initiatives
• Allocating resources toward those programs

It's also important for leadership to ensure the culture they've created continues to benefit their organization and to raise a red flag if it doesn’t. They have an opportunity to lead by example, which means actively teaching core values and using their good behavior to positively shape their vision for the company.

Management

Managers are the doers and fixers. Working at the front lines of an organization, they're in close contact with executives and the employees they supervise. This makes them invaluable resources for improving communication about company culture and values.

This team handles tasks like:

• Administering culture initiatives
• Keeping an eye out for work culture problems and identifying solutions
• Soliciting valuable feedback about the employee experience
• Helping people stay focused on the organization’s policies, values, and goals

In a BambooHR report, 90% of employees said their boss influenced their decision to leave, so every problem managers face is an opportunity to show company culture in action and at its best.

Individual employees

Employees are just as responsible as anyone else in your organization for supporting company culture and aligning their behaviors accordingly. However, if you want your people’s support, your workplace culture should include creating an environment where they feel good about where they work.

But there’s a disconnect between what employees want and what leadership sees as important. According to Gallup’s extensive research on purposefulness at work, an ideal job for many employees is one that allows both for purpose at work and in their personal life.

But when asked about the most important success factors for new hires, purpose landed in the middle for leaders and managers:

• Only 30% described a strong sense of purpose and passion for the organization’s mission as “very important.”
• The top reason for success at 77% was communication skills.

The key to bridging this gap is listening to your employees' unique perspectives. As the pulse of your organization, they’ll have a good idea of where your workplace currently stands and can call out a cultural misfire when they see one.

Talk with them, survey them often, and take their feedback seriously, even if it’s not always what you’d like to hear.

Sooner or later, just about every organization has to deal with a few dissatisfied employees. It may not be easy, but it’s important to listen to the fault-finders’ feedback, too, because honest criticism is ultimately the most useful as you work to improve.

One more thing: As much as you might wish everyone loved your company, it's perfectly acceptable to let some people leave instead of investing time and resources into retaining them. A truly dissatisfied employee will likely be happier in another organization where they're a better fit, and their departure can allow your other employees to build a more balanced culture going forward.

8 steps to start creating your company’s culture

Even if you haven't formally established your company's culture yet, it's already alive and developing on its own. Your job is to rein in your unstructured culture and turn it into something intentional that everyone benefits from.

Here's a step-by-step guide for establishing a successful company culture:

1. Evaluate your current culture. Take an honest look at how things are done at your company and how people interact.
2. Ask for employee feedback. Figure out what people like about working for you, what they want to see change, and what they envision as their ideal company culture.
3. Shape your vision. What does "good company culture" mean to you? Research what today's employees want, what your competition is doing right, and how you can make a difference.
4. Define your values and goals. Use the insights you've gathered to define—or refine—the company mission, vision, and values that’ll help keep your culture on track.
5. Develop culture-focused programs and strategies. Your culture and values should be felt by everyone at your company. Find creative ways to weave them into work processes, interactions, and recruiting strategies.
6. Define measurable goals. Once you've shaped your culture, decide how to measure it. Culture metrics will speak volumes about your progress.
7. Communicate your vision. Clearly communicate your expectations, the changes you're making, how employee input is used, and your hopes for the future.
8. Plan for workplace culture changes. Even the best-laid plans run into a few hiccups along the way. Be realistic about what's working and what isn't, and leave room to evolve your workplace culture strategy in the future.

How to maintain company culture

Maintaining all the little things that bring your company's culture to life can feel like a juggling act, especially when it's time for things to change.

However, there are ways to manage culture thoughtfully and effectively:

• Culture is everyone's responsibility. Collaborate with employees and leadership to gather feedback and ensure everyone's doing their part.
• Make culture part of the onboarding experience. New hires should know exactly what to expect and how to behave at your company from their first day.
• Reward employees who exemplify your values. Motivating through recognition of exemplary behavior helps keep the momentum going.
• Prioritize accountability. Being consistent will help you enforce the policies and rules you've established.
• Communicate early and often. Craft a transparent, consistent communication strategy with multiple touchpoints to keep everyone in the loop.
• Gradually weave in cultural changes. Give your people plenty of time to process. It may take weeks or months for your changes to take full effect.
• Monitor key culture metrics. Use measuring and tracking tools to get vital answers (more on this later).
• When in doubt, refer to your vision. Your company's core principles should help you steer the ship on course.

How to improve culture over time

Our research shows that 1 in 3 companies aren't sure how to improve employee experience and retention. If you're in the same boat, we have you covered.

Here are seven steps you can take to improve your company culture:

1. Stay on top of current workplace culture trends and adjust accordingly, especially as your company scales or changes over time.
2. Prioritize employee growth and development.
3. Set a good example as a leader by modeling the behaviors you want to see.
4. Make sure people echo your values in everyday activities, like team meetings, performance reviews, and company communications.
5. Create a benefits package that reflects your core workplace principles.
6. Gather employee feedback through surveys, exit interviews, and other methods.
7. Quickly identify and address cultural issues in your workplace.

No matter where your culture stands now, there's always room for improvement. Building a better, more resilient workplace is a wise investment in your company's future, and it's something you can nurture little by little as the years go by.

How to adapt culture through periods of change

Of all the things that should sit on the back burner during periods of change, company culture isn't one of them.

For example, in 2021, BambooHR found that 77% of office employees wished their company would have done something different that year to promote a good work environment. While some companies adjusted their culture in a handful of areas to fit post-pandemic work realities, people yearned for more. Deteriorating work culture was the reason 1 in 5 employees began looking for a new job.

Maintaining the positive culture you've created can help your employees process and handle company-wide changes more smoothly. Use these tips for guiding your culture through change:

Be flexible

As your company evolves, your culture may need to, as well. Changing your programs or approach to workplace culture can help you adapt as a company. Just be sure to connect back to your core values. That way, any cultural changes you make will be easier for your teams to accept and put into practice.

Be transparent

It's easy to get wrapped up in what's next for your company when you're hustling through transition mode, but don't let your employees fall by the wayside. Make sure to communicate the latest developments and open the door for more questions and discussions. A transparent work culture helps maintain the trust you've built between you and your employees.

Be resourceful

Big changes can be hard on everyone. When it feels like your company's turned upside down, leaning on the programs you've created can help ease stress and improve employee wellbeing. Educate your employees on their resources, model what it means to practice good mental healthcare (e.g., take personal days, use your EAP, or work remotely), and find ways to expand your level of support.

Be appreciative

It's not uncommon for employee morale to dip during periods of change or uncertainty. Use your rewards and recognition programs to help keep your employees motivated to do their best work. Celebrating culture champions and everyday wins, both large and small, can help your employees move through those growing pains with as much positivity and self-compassion as possible.

How to measure company culture

How is your company's culture impacting your organization? You could wager a guess as to how things are going, but that won't tell you what your employees really feel about your company.

Instead, gather actionable data and use those insights to gauge whether your intended culture aligns with reality or needs a little course correction.

There are some ways you can measure company culture:

• Take pulse surveys. Simply ask your employees the same set of questions regularly and track their responses to see if anything changes.
• Record observations from team leaders. Managers and executives in the thick of it all can provide insightful updates about their teams.
• Conduct exit interviews. This step can help you identify what parts of your culture former employees liked and what parts influenced them to leave.
• Take 360-degree surveys. Measure individual employee adjustments to culture change by gathering feedback from multiple angles (e.g., supervisors, peers, and reports).

You can also measure employee satisfaction with periodic employee Net Promoter Score (eNPS®) surveys, which use a method based on the popular Net Promoter System℠ from Bain & Company. During this survey, employees respond to eNPS questions with a number between zero and 10, zero being the least positive. The results tell you whether people see your organization as a good place to work and why—or why not.

Company culture metrics you need to track

Qualitative and quantitative data can speak to multiple aspects of your organizational culture. This part is all about asking the right questions. The specifics depend on your goals, initiatives, and other factors, but some of the workplace culture metrics you can track include:

• Corporate values understanding and alignment
• Employee vs. new-hire turnover rates
• Employee retention rates
• Time-to-fill rates
• Absenteeism
• Productivity
• Communication (e.g., methods, effectiveness, and frequency)
• Employee engagement levels
• Number of employee referrals
• Recognition and appreciation (e.g., systems and approaches)
• Employee satisfaction scores
• Professional development program participation rates
• Workforce diversity, equity, inclusion, and belonging (DEIB) data

Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld. Net Promoter Score℠ and Net Promoter System℠ are service marks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld. Coro® is a service mark of Bain & Company, Inc.

Using software to improve company culture

One of the best things you can do is start using handy software tools or a complete HR platform that helps you manage all your company culture data in one place.

Look for a platform with innovative solutions, capabilities, and integrations that make it easy to get the insights you need. Employee feedback solutions with powerful AI tools let you take the data you've gathered and unlock a host of useful information in just a few clicks.

For instance, you can use employee survey software with multiple-choice questions that make participation quick and simple, or tools with free response options that help those who want to speak up feel heard. Many employee feedback solutions add a layer of anonymity, so people feel more comfortable providing honest, critical feedback.

Example survey questions

To make the most of this process, ask specific survey questions like:

Transparency survey questions

• Do you clearly understand the company's values and purpose?
• On a scale of 0 to 10, how well does the company communicate with employees?
• Do you feel comfortable speaking honestly with your supervisor?

DEI survey questions

• On a scale of 0 to 10, how well does the company prioritize DEI?
• Do you think diverse perspectives are respected and valued in the workplace?
• Do you feel a sense of belonging at work?

Employee appreciation survey questions

• How frequently are you recognized by your manager?
• What kind of recognition do you prefer to receive?
• How can the company improve its rewards program?

Employee wellbeing survey questions

• Is your schedule flexible enough to maintain work-life balance?
• Does it feel like your manager has your best interests at heart?
• Do you trust your colleagues to support you at work?

Employee performance survey questions

• Do you receive constructive feedback about your performance?
• Does management provide enough support for you to do your job well?
• Does your workload feel manageable enough to complete during business hours?

Get even more culture insights with these BambooHR resources