Impact of Organizational Culture on Employee Engagement and Reward

Every organization has its own solitary culture, which shows its vision, mission, beliefs, habits, behaviors, values, norms, and guidelines (Paais and Pattiruhu, 2020; Deloitte Insights, 2015 as stated in Evangeline and Ragavan, 2016; Al Shehri et al., 2017; PossibleWorks, 2021).  Lauren (2015) describes organizational culture as a way of life of a set of jobholders. Research shows that employees working in organizations with good Cultural background feels physiologically safe and they believe that the culture of the organization shapes the engagement level which positively impacts the business performance(Al Shehri et al., 2017; Evangeline and Ragavan, 2016; Paais and Pattiruhu, 2020; REBA, 2019). In contrast, bad organizational culture will increase the loss of best latent, increase the number of disengaged employees and this will lead the organizations to not perform well  (PossibleWorks, 2021).

The leaders of the organizations are responsible for creating the organization’s culture (Lawrence, 2007 as stated in Al Shehri et al., 2017). However, the organizations should include employees to build a competitive organizational culture (Evangeline and Ragavan, 2016). According to PossibleWorks, (2021), organizational culture is important because:

a)         It helps the organizations to be unique

b)         It helps the employees to feel stable (Al Shehri et al., 2017)

c)         It helps organizations attract and retain top talent (Paais and Pattiruhu, 2020)

d)         It helps in improving employee’s level of engagement (Al Shehri et al., 2017)

e)       It helps organizations to have a set of happy and satisfied employees (Lauren 2015; Paais and Pattiruhu, 2020).

Lauren (2015) shows five factors, which affect the culture of an organization. 

Top Leadership Principles

The way top managers run the organization directly affects the guidelines set for the job holders in that organization (Lawrence, 2007 as cited in Shehri et al., 2017; Evangeline and Ragavan, 2016; Al-Tit and Hunitie, 2015) 

Nature Of The Business

The extent to which an organization can positively make a difference in their client’s lives has a clear impact on the culture of the organization. For example, if the organizations have a culture to value for their clients, organizations can have the advantage of being recommended to new clients, which will help the organization to grow fast.

Company Values, Policies, and Work Ambiance

The core values of an organization guide its policies. This directly affects the culture of the organization, which employees experience every day (PossibleWorks, 2021).

Clients and External Parties

The people who an organization work with is important because they have a direct impact on employees’ well-being. A good comment from a client can boost the satisfaction of the employees to work hard.

Recruitment and Selection

It is important for the organizations to recruit people who have the willingness to align their attitudes and behaviors with the organization's guidelines, which will help the organizations to have a competitive organizational culture (PossibleWorks, 2021).

The relationship between Organizational culture and employee engagement has become a key discussion topic in the business world because most of the research has found that this is a major, vital challenge organizations have to face to survive in the competitive business world (PossibleWorks, 2021). Lloyd (2008 as cited in Al Shehri, 2017) call out the fact that a culture, which improves communication between leadership and the subordinates, is so important to maintaining the employee engagement level. Evangeline and Ragavan (2016), highlight that Employee engagement shaped by the organizational culture brings competitive advantages to the business. According to PossibleWorks (2021), engaged employees are 21% more extra productive than the ones who are not. To make a group of highly engaged employees, organizations should give the employees a clear understanding of the culture of the organization at the recruitment level because the ones who can align with the organizational culture will remain in the organization for a long time (PossibleWorks, 2021; Lauren,2015). In addition, organizations should keep the employees updated on the culture regularly, to remind them where they should go in what they do to achieve the organization’s goals and feedback for employees in all directions will help them to be highly engaged and perform well (Al Shehri, 2017; PossibleWorks, 2021). 

Other than employee engagement, studies show that “Employee Rewards” play a major role in organizational culture too (PossibleWorks,2021; Al Shehri et al., 2017). Nacinovic, Galetic, and Cavlek, (2009), show in their study that 54% of the studied firms have Rewards as a core value of their culture. This helps them to be competitive in the business world.  REBA (2019) says that Rewards should be one of the core values of the organizational culture and the study suggest three important points organizations should keep in mind when building a competitive culture.

1). A culture of letting employees know that they are valuable to the organization by rewarding them for their contribution will motivate employees to do their best in achieving goals.

2). A culture that encourages peer appreciation is another way to increase the employees feeling of belongingness.

3). A culture that includes employees in creating the reward systems will help the organizations to let the employees know the reasons to be rewarded. This will help the organizations to encourage employees to do better in what they do.

A reward-centric culture will let the employees know that the organization values their effort, welcomes innovation and that their voice is heard when making decisions (Nacinovic, Galetic, and Cavlek, 2009).

The article of PossibleWorks (2021) shows some proven ways to build an employee engagement culture for an organization.

A). Check the effectiveness of the current reward system of the organization and make changes as soon as a loophole is found.

B). Keep the employees posted on what is happening in the organization. Reward them, for a job well done. Celebrate the success of the organization with all employees in the organization.

C). Check the organizational culture regularly with the employees by creating surveys and making changes to improve the satisfaction level of the job holders (Al Shehri et al., 2017)

D). Give the employees some space to improve their peer relationships. Experts say that an organization with this cultural habit will have a set of employees with good team spirit. This is a competitive advantage for an organization.

E). Let employees have a flexible working plan. This will help them to be motivated with what they do. The employees will feel accountable to return a favor for what they receive from the organization.

F). Create a culture agreed by all the leaders and employees in the organization. Make sure to have zero hidden factors included in the culture that will lead the investment to fail.

Nevertheless, the created culture for an organization should be challenging the work, make room for high-employee engagement, encourage employee and management relationships, reward the best talents, and welcome innovation (Evangeline and Ragavan, 2016).

References:

Al Shehri, M., McLaughlin, P., Al-Ashaab, A. and Hamad, R., 2017. The impact of organizational culture on employee engagement in Saudi Banks. Journal of Human Resources Management Research, 1, pp.1-23. 

Al-Tit, A. and Hunitie, M., 2015. The mediating effect of employee engagement between its antecedents and consequences. Journal of Management Research, 7(5), pp.47-62. 

Evangeline, E.T. and Ragavan, V.G., 2016. Organisational culture and motivation as instigators for employee engagement. Indian Journal of Science and Technology, 9(2), pp.1-4. 

Lauren (2015). 5 Factors That Affect Organizational Culture | TruPath. [online] TruPath Search. Available at: https://trupathsearch.com/organizational-culture-factors/ [Accessed: 14 April 2022].

Nacinovic, I., Galetic, L. and Cavlek, N., 2009. Corporate culture and innovation: Implications for reward systems. World Academy of Science, Engineering and Technology, 53, pp.397-402. 

Paais, M. and Pattiruhu, J.R., 2020. Effect of motivation, leadership, and organizational culture on satisfaction and employee performance. The Journal of Asian Finance, Economics, and Business, 7(8), pp.577-588. 

PossibleWorks (2021). How Organizational Culture Impacts Employee Engagement and Performance. [online] PossibleWorks. Available at: https://possibleworks.com/blog/how-organizational-culture-impacts-employee-engagement-and-performance/ [Accessed: 14 April 2022].

REBA (2019). Three ways to build organisational culture around reward and recognition. [online] reba.global. Available at: https://reba.global/resource/three-ways-to-build-organisational-culture-around-reward-and-recognition.html [Accessed: 14 April 2022].