The Impact Of Company Culture On Employee Performance And Retention

By Bill Rohr, Client Solutions Manager Supervisor, Kelly Anderson Group

Bill Rohr

Company culture is not just a buzzword, but the lifeblood of any organization, influencing everything from team morale and work quality to the overall brand image. It is a network encompassing behaviors, attitudes, the moral code of the organization, and the dynamics of people’s interactions. The work environment, leadership approach, values, and goals all contribute to shaping a company’s culture. How that culture is experienced by team members has an effect on their happiness, productivity, and loyalty to the organization.

 “In my opinion, company culture is the single most important differentiator between the companies that sustain winning performance and those that get tripped up by changes in the world around them, or forget why they exist because they’re consumed by the energy of success.” — Dinesh Paliwal, former CEO of Harman International. (source: Chief Executive)

An organization’s culture is embodied in the behaviors and attitudes of its people. Every interaction, from the boardroom to the breakroom, reflects the collective beliefs, principles, and behaviors that the company espouses. Your people, consciously or not, look to these interactions for cues on how to behave and what to prioritize.

“I expect all members of my team, regardless of their position, to conduct themselves in a way that is in alignment with, and supports, our corporate culture.” — Kelly Anderson, President, Kelly Anderson Group

The company’s moral code offers ethical guidelines and lays down the principles that govern decisions within the company. People interactions are the tangible expressions of the values and norms of a company and often determine how teams communicate, collaborate, and resolve conflicts, effectively shaping the organization’s social fabric.

The work environment also plays a very large role in determining team member motivation and satisfaction. A positive, inclusive, and supportive work environment promotes creativity, problem-solving, and productivity, while a negative environment can result in stress, low morale, and high turnover.

Leadership style is a crucial factor in shaping company culture. Leaders set the tone, influencing how people interact, solve problems, and approach their tasks. An inclusive and empathetic leadership style fosters a culture of trust and collaboration, promoting a healthy exchange of ideas and teamwork.

“A leader’s behavior is the biggest influence on a company’s culture. A culture is shaped by what leaders do, not by what they say.”  — Boris Groysberg, professor at Harvard Business School. (source: Harvard Business Review)

Company values and goals are the compass for the organization’s actions. They guide decision-making processes, influence strategies, and create a shared vision. An organization that communicates its values and goals not only motivates its teams but also enhances their sense of purpose and belonging.

The company culture significantly impacts the happiness and productivity of its staff. A positive business environment makes employees feel valued, engaged, and motivated. It encourages them to take initiative, contribute ideas, and strive for excellence.

“Our research shows that when employees are happier at work, they are 12% more productive… positive environments are performance enhancers. They are characterized by optimism, respect, and appreciation.” — Shawn Achor, author of “The Happiness Advantage.”  (source: Harvard Business Review)

On the other hand, a negative culture may breed dissatisfaction and low morale. Are unhappy people likely to be less efficient, less creative, and less committed to their work? Probably. As such, they may only do the bare minimum, leading to reduced productivity and quality of work.

A positive company culture fosters healthy co-worker relationships by encouraging teamwork, mutual respect, and cooperation. Solid relationships at work equal improved communication, enhanced problem-solving, and a more effective and productive workforce.

In addition to impacting productivity, negative company culture affects staff retention and the costs associated with hiring and training new personnel. A positive company culture attracts talent and motivates people to stay longer, thereby reducing the costs and time involved in recruiting, onboarding, and training new staff. Whereas, a high turnover rate can be expensive and disruptive.

“A very conservative figure for losing an employee is $5,000. If a 150-employee company loses 50% of their employees per year, this costs $375,000 per year.”  — Kelly Anderson, President, Kelly Anderson Group, Inc.

Creating a culture of belonging starts with fostering an environment where everyone feels valued and heard. A simple, effective approach to achieving such, is to create open lines of communication. Always encourage people to share their thoughts and ideas, and let them know their feedback will be considered.

Having interdepartmental projects, team-building activities, and brainstorming sessions are also excellent ways to develop a sense of camaraderie. Supervisors should regularly acknowledge employees’ contributions and achievements. Appropriate ways to do this are through public recognition, awards, or simple thank-you notes.

“Recognition is not a scarce resource. You can’t use it up or run out of it.” — Susan M. Heathfield, human resources expert. (source: The Balance Careers)

Organize team outings, holiday parties, or casual get-togethers to help employees unwind and build relationships outside of their work roles. Understand the personal challenges team members might face and offer support where possible, such as offering flexible schedules for parents or caregivers.

Offer opportunities for skill enhancement, career growth, and learning. People respect a company that values its teams and their career aspirations. Choices can be as simple as providing an environment where people feel comfortable voicing their opinions, concerns, or ideas without fear of repercussions.

“I used to believe that culture was ‘soft’ and had little bearing on our bottom line. What I believe today is that our culture has everything to do with our bottom line, now and into the future.” — Vern Dosch, author of “Wired Differently.” (source: Inc)

Having a healthy company culture cannot be overstated as it will influence every aspect of an organization, from the day-to-day interactions and morale of the people to the overall productivity and success of the company. Organizations that understand this concept and create a positive culture are likely to see higher levels of all associates’ engagement, productivity, and retention — all of which contribute to a successful and sustainable business.

Kelly Anderson Group helps transportation companies Find, Recruit, Retain, and Train their drivers and staff. We teach proven management, recruiting, and retention techniques through seminars, webcasts, and one-on-one consulting. Beyond this, we offer training and an e-Learning tool to build up your entire workforce — from the shop floor to the corner office. Visit

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