Company culture—also known as corporate culture or organizational culture—reflects the shared core values, behaviors, and business practices that characterize an organization. It shapes how team members interact, make decisions, and drive business outcomes. 

HR professionals play a major role in molding these elements together to foster a positive and effective work environment.

Healthy company culture can include the following:

Types of company culture

Company culture is complex and defies simple taxonomies. But, it’s possible to describe trends in modern companies’ cultures. Some types of company culture include:

Clan company culture

Clan company culture, or collaborative culture, is highly communicative. Companies with a clan culture focus on their people and break down barriers between executives and individual contributors. The organization is like a large family where everyone supports each other. 

Adhocracy company culture

Derived from “ad hoc,” adhocracy company culture emphasizes agility, innovation, adaptability, and creativity. Startups and tech companies may use this type of culture to foster experimentation and rapidly adjust strategies.

Market company culture

Organizations with a market company culture emphasize meeting goals, reaching targets, and getting results. Often separating executives and individual contributors, the top priority of this culture type is the bottom line. Their activities consistently aim to surpass competitors and dominate the market. 

Hierarchy company culture

Organizations appreciate stability, uniformity, and well-defined processes in this traditional culture. Well-established companies like government agencies and large corporations may adopt this culture to maintain a clear chain of command.

Company culture example

To help illustrate how HR leaders can build a company culture using various intentional processes and systems, let’s look at the company Google, whose culture has received multiple awards over the years.

Google’s culture emphasizes many factors, from a fun work environment to encouraging innovation and open communication with a flat organizational structure. In addition to great compensation and perks, the company gives people mobility, robust financial support, and flexible work arrangements. 

Google also makes it a point to communicate its values through its “ten things we know to be true” manifesto. The manifesto promotes the company’s core belief that “you can make money without doing evil.” 

This example shows that Google’s culture is highly intentional, prioritizing team member happiness alongside a set of clear values. The company’s deliberate effort to build a purposeful culture helps it attract top talent and consistently receives awards for providing a great experience.

<<Get more great company culture examples>>

Why is company culture important?

As guardians of the work culture, HR leaders play a crucial role in influencing people and managers. Why? A healthy culture drives success and can directly impact these key areas of HR responsibility: 

Employee engagement

Individuals who feel valued for their contributions typically show higher engagement. A sense of appreciation can make team members more enthusiastic and committed to positively impacting team efforts.

Work performance and productivity

Team members who feel aligned with a positive, supportive culture may go above and beyond in their roles, resulting in improved productivity and quicker task completion.  

Employee retention

A culture that aligns with a team member’s personal values and professional aspirations can enhance job satisfaction and loyalty. This reduces the likelihood of people seeking opportunities elsewhere, increasing employee retention. 

Hiring top talent

A healthy culture can attract top talent by showcasing an environment where people thrive and grow. This can entice candidates who demonstrate commitment to team learning and development, inclusivity, and a positive workplace. 

Reducing presenteeism

Healthy cultures help reduce presenteeism, a situation where team members show up to work but aren’t entirely productive due to illness or other reasons. A company that encourages a work-life balance and taking paid time off (PTO) fosters a supportive environment where employees feel valued and cared for. 

This approach promotes employee wellbeing, enhances overall productivity, and keeps team members engaged and motivated.

Innovation 

Environments that support taking calculated risks and exploring new ideas foster innovation. When team members feel safe thinking outside the box, they may devise new solutions that drive the company forward.

Profit

Engaged and retained top talent, reduced presenteeism, and improved productivity and innovation, resulting in operational efficiencies and cost savings. These can enhance an organization’s financial performance, linking HR to the business’s bottom line.

How to establish a great company culture

Company culture evolves with the actions, values, and decisions of its leaders. HR professionals can evaluate the current culture’s effectiveness and alignment with company goals to develop an environment that promotes satisfaction and success for the entire team.

1. Define your values

Clearly articulate what your organization stands for to encourage value-based decision-making and behavior. Communicate these values consistently across all levels of the organization, ensuring they are integrated into everyday practices. 

How do you determine your company values? Include your entire company, from managers to team members, in the process. You can:  

  • Host workshops: Organize interactive sessions where various department members can discuss core values.
  • Create Employee Resource Groups (ERGs): Form ERGs to brainstorm and propose values that resonate with their members.
  • Share individual stories: Ask your people to share stories about their best experiences at the company. Analyze these stories to identify common themes. 
  • Hold contests for submissions: Host a company-wide contest and offer incentives for the winning submissions. 
  • Interview leadership: Conduct interviews with company leaders to understand their vision and their values. 
  • Map your values: Create a visual map where people can add words or phrases they associate with the company’s mission and culture.
  • Use external facilitators: Bring in consultants who specialize in company culture to help guide the process and provide a fresh perspective.

2. Lead by example

Leaders can set a standard for others by embodying their company’s values and ethics in every action and decision. For instance, if commitment to teamwork is important to your company culture, leaders can facilitate projects that require cross-departmental cooperation.

3. Encourage open communication

Open communication encourages people to express their thoughts and ideas without fear of judgment. Organizations can send out surveys and hold regular town hall meetings to provide a platform for open dialogue. This practice reinforces the desired value and actively involves team members.

4. Promote work-life balance

Flexible hours, remote options, and generous vacation policies can help team members feel recharged and productive. Promoting work-life balance in your company culture benefits team members, managers, and your entire organization.

5. Invest in employee development

Ongoing learning and development opportunities help team members grow their skills and advance their careers. A commitment to your people’s personal and professional success supports a company culture of continuous improvement and engagement.

6. Recognize and reward achievements

Implement recognition programs to acknowledge your team’s efforts and successes. These programs can include formal awards for significant achievements and informal praise during team meetings to keep morale high.

7. Foster collaboration and teamwork

Collaborative teams can accomplish more than individuals working alone. Leaders can encourage teamwork by providing communication tools, aligning team goals, creating physical (or virtual) spaces where teams can work together, and planning regular team events. 

8. Embrace diversity and inclusion

Strengthen your commitment to diversity, equity, inclusion, and belonging (DEI&B) to foster a more innovative and collaborative work environment. Update your employee handbook with clear policies, offer regular DEI&B training, and create safe spaces for open dialogue. These steps educate your team on diversity practices and can help attract a broader range of talent.

9. Promote wellness

Organizations can cultivate a company culture that values your people’s physical and mental health. Wellness programs like paid gym memberships, healthy meals, and mental health counseling can reduce absenteeism and healthcare costs while enhancing employee wellbeing.

10. Appoint a company culture committee

Establishing an internal team focusing on cultural initiatives helps maintain your company’s core values. Committees can organize events that promote team bonding, develop policies that ensure inclusivity, gather team member feedback, and ensure your culture aligns with company goals.

11. Celebrate traditions and rituals

Maintaining company traditions strengthens the sense of community and belonging. These can include annual retreats, monthly lunches, holiday parties, and celebrating milestones like birthdays.

How to improve your company culture

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HR leaders can nurture company culture and navigate it in a positive direction. Incorporating these elements can help HR keep their culture on track:

Give people a voice

When people feel valued, they’re more motivated to perform high-quality work and achieve professional goals. HR leaders can foster an environment where management and leadership value people and encourage them to feel comfortable. 

Establish regular channels for feedback, such as suggestion boxes or digital platforms, and offer exit interviews to leavers.

Analyze the feedback, plan potential solutions, and discuss changes with leadership. Communicate with the team how their input has influenced changes. 

Align culture with company identity

HR leaders can collaborate with executives to identify the ethos they want to convey and the type of culture they want to thrive. 

For example, suppose an organization seeks to promote autonomy. In that case, it can offer flexible work hours, implement employee-manager collaboration for establishing goals, and include employee feedback in processes and decision-making. HR leaders can further increase autonomy by surveying people to discover how they’d like to take greater ownership of their work.

Strengthen the good vibes

Positive energy is contagious. HR leaders can cultivate a happier workplace by recognizing people’s achievements, directly thanking individuals for specific contributions, and demonstrating empathy towards colleagues.  

How to measure the health of your company culture

Each organization may define its desired culture differently, but one thing remains the same: the need to measure results. 

Measuring the status of company culture initiatives helps identify areas for improvement. When HR leaders implement essential programs, they can enhance and guide the culture in the desired direction. Proactive HR leaders can make required changes quickly and ensure the company culture remains aligned with organizational goals.

By tracking the progress and success of the following systems, it’s possible to measure company culture:

  • A code of conduct: Create a set of guidelines that help team members understand the company’s expectations and regulations. A code of conduct articulates the organization’s ethical commitments and standards of professional conduct. It includes ethical principles, behavioral expectations, legal compliance, and procedures for reporting misconduct. Regularly review your code of conduct to confirm alignment with cultural goals and make any necessary changes. 
  • Learning and development initiatives: Implement programs and activities that enhance team members’ skills and knowledge. These include training sessions, workshops, e-learning courses, and opportunities for continuous professional development to facilitate career growth and improve job performance. Measure metrics like course completion rates, learner engagement, content usage, learner proficiency, and course enrollment.
  • Coaching or mentorship: Provide personalized support through one-on-one coaching sessions. Facilitate mentorship programs where more experienced team members guide less experienced ones by sharing knowledge and fostering professional growth. Send surveys to participants to gather feedback on their experiences and their impact on their development. You can also ask the coaches for input on the mentorship program and recommendations for their students. 
  • Collaboration platforms: Utilize digital tools and technologies to facilitate communication and cooperation among team members. These platforms help streamline workflows and support teamwork across different locations. Ask your IT department to provide usage data, including the number of team members on the platform, the frequency of conversations, and the volume of document sharing. 
  • Employee recognition: Acknowledge and celebrate team members’ hard work and contributions through informal methods like verbal praise and formal recognition such as awards and certificates. Include questions in your annual or quarterly company survey about your recognition efforts, the frequency of recognition, and how they can improve. This allows for benchmarking, monitoring, and enhancing team member recognition.
  • The performance management process: Manage and assess team goals through a structured performance management process. This involves setting clear performance standards, assessing team member performance, providing feedback, and planning for performance improvements. Measurement criteria can include administrative time, team member satisfaction, the cost of running company-wide review processes, competency growth, and advancement rates.

<<Download free performance management templates>>

Where to project company culture for prospects and future team members

Newer generations seek companies whose cultures align with their values. People now prioritize workplaces that reflect their ideals, prompting companies to cultivate environments that resonate with these priorities. 

Here are some ways a prospect could learn about your company’s culture: 

  • Research the organization’s website and social media: Make sure the mission statement, core values, and any information about company culture are up to date and easily found on the company website. Share articles, videos, and photos that give a sense of what it’s like to work at your company.
  • Employee review platforms: Encourage satisfied team members to share their experiences on platforms like Glassdoor, Indeed, and LinkedIn. Regularly monitor and respond to reviews to demonstrate active engagement and address concerns. 
  • The interview process: Encourage interviewers to balance discussions about business objectives with questions about candidates’ alignment with company values. For example, if your company culture values work-life balance, include a conversation about managing personal and professional priorities.
  • Specific questions from prospects: Be ready to answer questions about the company culture during an interview. For example, they might ask how you support professional development, how performance is evaluated, or how teams collaborate.
  • Current team members: Facilitate opportunities for prospects to interact with current team members through virtual meet-and-greets or Q&A sessions. Candidates can hear personal stories and gain a deeper understanding of the work environment directly from their potential colleagues.
  • Company activities and community involvement: Actively promote and document your organization’s involvement in community service, clubs, and social events on your website and social media. Highlighting these activities can encourage participation and demonstrate a culture that values community and team engagement.
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Make an excellent company culture part of the HR strategy 

Now that we’ve established why company culture is important and the reality that—purposeful or not—every organization has one, building a positive culture emerges as a top priority for HR professionals. 

With careful strategies in place, HR leaders can create a unified, stable, community-based culture that nurtures employee engagement, retention, and motivation. This positive work environment attracts top talent, fosters innovation, and encourages growth. 

These factors improve overall performance and profitability—driving better business outcomes and sustained organizational success.

Meet Bob 

HR leaders use Bob daily to actively promote and manage a people-first environment supporting employee engagement and organizational success. 

Bob offers: 

  • Core HR: HR teams can leverage this as a foundational hub, offering a social-media-like interface to enhance team engagement
  • Surveys: HR leaders can engage team members through surveys, gathering valuable feedback that informs improvements and measures satisfaction, helping to foster a responsive and inclusive culture
  • People Analytics: HR leaders can use this feature to track employee turnover and growth rates, aiding in proactive management and cultural alignment
  • Automated onboarding: HR leaders can use HiBob’s automated onboarding process to ensure a smooth integration of new joiners, making it easier to align them with the company’s culture right from the start
  • Time and Attendance: Manage time tracking and attendance efficiently, simplifying payroll processes and ensuring accuracy
  • Payroll Hub: Centralize payroll management within a single platform, reducing administrative burdens
  • Performance Management: Conduct 360-degree reviews and effectively align team member goals with organizational objectives
  • Workforce Planning: Use data-driven tools to forecast hiring needs and strategically plan resource allocation.