3 Common Work Culture Myths
Ethics. Integrity. Do what is right for the customer.
Words may seem like good indicators of a healthy corporate culture, but these specific examples were taken from Wells Fargo’s annual report a year before it was discovered that the bank had created millions of fraudulent accounts in using customer names.
“At least anecdotally, we find that just because you espouse these aspirational values doesn’t guarantee you have a healthy corporate culture,” said MIT senior lecturer Sloan.
A healthy company culture is a priority today as organizations contemplate the work of the future, the impact of the Great Resignation, and how it can help employees find purpose in their work.
“Culture works as an intermediary that translates purpose into everyday behaviors that have a very significant influence on the employee experience, but also on company performance and reputation,” Sull said.
In a webinar presented by MIT Sloan and QUT Business School, Sull shared three common myths about growing and the indicators of a toxic myth.
Myth #1: Culture only matters for employee engagement.
An employee who enjoys working in a particular organization and finds their work meaningful is likely to be engaged in their work. But this is not the only role that culture plays. Culture also contributes to a company’s financial success. Sull analyzed 500 American companies and found that 21 of them embodied values that made them “champions of culture”.
“What we found over a 5-year period is that they got twice the returns of the NASDAQ…nearly four times the returns of the S&P 500…and 80% of them got outperformed their industry,” Sull said. “So yes, culture helps you attract and retain great people, but it also helps performance.”
Culture has an impact on reputation. Rio Tinto, one of the world’s largest mining companies, recently released a workplace culture report detailing sexual harassment, bullying and racism among its workforce and leadership. The report came after a 2021 Australian parliamentary inquiry into sexual harassment in the mining industry. The aim of the report was “to identify strengths and opportunities for Rio Tinto to improve workplace culture”, the company said.
“Part of why it’s so important for a company like Rio Tinto’s culture to be non-toxic is that its reputation shapes its ability to deal with governments and secure mineral rights,” Sull said. “Culture is important for employee engagement, but it’s so much more than that.”
Myth #2: There is nothing wrong with talking, not walking with cultural values.
As Wells Fargo’s annual report illustrates, it is not enough to say that an organization has core values. There must be action behind them.
In another study of these 500 companies, Sull found that 75% of them had published a list of core values. However, when it came to how employees rated their companies on these values, there was a disconnect.
“The correlation coefficient between a company’s weighting on a set of values and how well employees said they did on those specific values hovered around zero,” Sull said.
Culture translates purpose into action, he said. Hanging core values on the wall or including them in a financial report does not mean that an organization has a healthy culture that motivates employees.
Myth #3. For enough money, any employee will remain in a toxic culture.
Money can’t buy happiness any more than it can buy employee loyalty.
Sull looked at quit rates among these 500 companies during the first six months of the Great Quit (April through September 2021) and learned that toxic culture was the best predictor of a company’s attrition rate compared to the industry average attrition rate. Overall, toxic culture was 10 times more powerful in predicting attrition than compensation — one of the most common reasons given for people leaving jobs in the past year, according to the study.
How to spot a toxic culture? Sull offers five indicators:
- employees feel disrespectful at work.
- A not inclusive the environment makes people feel excluded because of their race, gender or other factors.
- There is a model of immoral or illegal behavior, such as a lack of regulatory compliance.
- People are cut throatchoosing to go out of their way to undermine each other.
- The leaders are offensive – for example, yelling or yelling at people.
“The things you have to look at are the leaders and social norms that shape day-to-day behavior,” Sull said. “If you don’t look at these things, you have no idea what culture is.”
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