How to Measure Company Culture: Metrics, Tools, and Tips to Quantify Your Initiatives

December 2, 2022
how to measure company culture

Building and maintaining positive company culture is one of the most vital aspects for employers nowadays, with up to 46% of job seekers prioritizing this aspect while applying for a workplace.

Since company culture can give your business major competitive advantages, it’s important to know how to measure company culture as well as the core values that it can add to your workplace, and that’s where this guide comes in handy!

Keep on reading if you want to find out more about company culture in addition to all the tools and methods to assess and quantify it.

How measuring company culture can benefit your business

Before we dive into the details of tracking and analyzing your workplace culture, you should first understand the importance of company culture and how it can massively impact your business:

Helps in shaping the company’s identity

Having a unique and healthy corporate culture can help in making your organization stand out due to its special identity. 

This identity can help in aligning the employees around the organization’s goals, which can greatly improve productivity rates. 

In fact, satisfied employees within a healthy company culture showed up to a 12% improvement in productivity!

Shows you where you need to improve

measure your workplace culture

By measuring the current state of your company culture using key metrics and modern tools, you can pinpoint the areas of weakness in your company that you can improve.

Additionally, by finding out where your company is heading in terms of culture, you’ll be able to use that data and insights to prevent unwanted and negative behaviors from finding their way into your organization.

Attracts better talents

A recent report by Jobvite found that up to 88% of job seekers nowadays would classify company culture as an important factor while looking for a job. 

Not only that, but the same report also shows that 15% of talents turned down job offers due to negative workplace culture, with 33% willing to accept a relatively small pay cut to work in a company with better culture!

Improves employees’ retention rates

By maintaining a healthy, positive company culture where the employee experience and  contributions are appreciated, employee retention rates would increase dramatically.

In addition to this, keeping good talents is much more cost-effective than hiring new ones, which can save you a lot of money in the long run. 

It also helps you focus your efforts on growing your business rather than scouting and recruiting replacements.

Helps you maintain an inclusive work environment

A report by Deloitte found that 80% of job seekers are mainly interested in applying for inclusive employers with 72% ready to leave their workplace for a more inclusive one.

Being an equal opportunity employer with an inclusive work environment not only makes your company more attractive to the best talents, but it also drives more profits with up to 400% growth in revenue.

Key metrics to track your company culture

Maintaining good company culture can be a solid long-term investment with a lot of advantages, so it’s important that you keep track of all the essential metrics to quantify it. Let’s have a quick look at them:

Retention Rate and Referrals

Retention rates and employee referrals can be great metrics to describe your company culture. When employees find their workplace experience great, they’ll likely stay their for the long haul and even recommend others to join them.

Tracking this metric is relatively easy and it can give you a decent insight into the kind of culture that your company harbors.

Turnover rates

This one is the opposite of referrals and retention rates, so it’s usually equally easy to track. To put it simply, most employees would value stability and feel comfortable in their jobs. 

Employees frequently resigning or quitting their job is usually an indicator of various problems in your workplace, including negative company culture. This makes it a remarkable metric to keep track of. 

Engagement and Collaboration

Everything from daily communications to collaborations on projects and competition among employees can reflect your company’s culture health.

The easier the communication between employees of different departments, the healthier the company culture, and vice versa, so it counts as a valuable metric to understand the culture of your workplace.

Innovation and Productivity rates

As previously established, positive company culture where efforts are appreciated encourages employees to perform at a high level.

This results in noticeable improvements in innovation and productivity rates, so you’re able to tie back these metrics to your company culture through different methods, such as questionnaires and survey data.

Top 7 methods to measure your company culture

Now that you know more about the metrics, here are 7 methods that you can use to measure and improve company culture in your organization:

1. Employee surveys

Employee surveys

The most reliable method to gauge your company’s culture is to let your employees say through surveys, especially anonymous ones where they can express their opinions without worrying about consequences.

Luckily, there are plenty of pulse surveying tools out there that can help you create, monitor, and keep track of such feedback, such as Moodtracker®, Simple Poll, and Officevibe

2. Performance management tools

There are several performance management tools out there that can guide you when it comes to company culture. 

These tools are capable of measuring various aspects of your workplace by quantifying the organizational development and individual employees’ growth.

By extrapolating the data obtained from these techniques, you can have a clearer image of the work environment and culture in your company, these tools include:

For example, with Workhuman’s Conversations tool, you’re able to measure growth and performance on a regular cycle (e.g., annually, quarterly), at the end of a project, and when performance improvement plans (PIPs) are needed – all in one place.
Managers can choose from a variety of configurable templates and easily access feedback and updates to simplify the evaluation process.

3. People analytics tools

These tools, also known as HR analytics tools, are used by HR teams in order to collect and analyze a wide range of “people data” about the employees in a company.

These tools automate the redundant aspects of HR analytics and help in speeding up the processing of this information into spreadsheets and graphs.

Every analytics tool can measure a different set of aspects, but they mainly focus on employee satisfaction and productivity rates, which are primary metrics when it comes to measuring company culture.

The most common tools out there when it comes to analytics are ADP Workforce Now, Engagedly, Workday, and ChartHop.

4. Exit interviews

A resigning employee is a great way to get honest feedback because they’re more likely to be honest about the culture in your company than current employees. 

By designing your exit interviews to include analytical questions about company culture, they can help you understand where your culture might be lacking and what steps you need to take to improve.

5. Monitoring behaviors in the work environment

Another method that you can use to measure company culture with decent accuracy is to measure the positive and negative behaviors through a behavioral observation scale.

This one helps you create and foster a healthy company culture by identifying and keeping track of different elements and behaviors that you deem desirable.

You can encourage these behaviors and eliminate negative ones by implementing a scale system that rates employees based on these behavior.

6. Focus groups

Focus groups are a classic strategy that is quite effective when it comes to assessing company culture.

In a company culture focus group, a cross-section of employees are invited to share their reactions and stories about certain behaviors within workplace. 

You can then gather this data and form patterns and trends to give both an assortment of the current company culture situation as well as methods to improve it.

7. Organizational assessment systems

Organizational assessment

There are different organizational assessment systems that you can use to determine what the culture in your workplace is like.

The first one is the Organizational Culture Assessment Instrument (OCAI), which is a culture tool that can help you distribute 100 points across the 4 major competing values, which are:

  • Clan
  • Adhocracy
  • Hierarchy
  • Market

Another type of assessment for company culture is the Business Needs Score card (BNS), which is a diagnostic tool that measures various aspects of the current and sought-after company culture situation. The culture section of the BNS is split into:

  • Engagement and trust
  • Communication and instructions
  • Providing a supportive environment.

FAQs

What are the types of company culture?

There are several types of company culture, and each one defines different approaches towards a better workplace environment. These types include:

  • Collaborative (clan) culture
  • Creative (adhocracy) culture
  • Control (hierarchy) culture
  • Compete (market) culture
  • Customer-driven culture
  • Purpose culture
  • Role-based culture
  • Task-oriented culture

What are the most common company culture challenges?

Company culture can face several hurdles along the way, but luckily, these challenges can also double as pointers that you can use to focus on improving your culture. The most common challenges include:

  • Excessive unhealthy competition among employees
  • Obsession with hierarchy and control
  • Inflexibility and resistance to culture change
  • Clashes and conflicts
  • Lack of morale and urgency 
  • Poor communication

Conclusion

This wraps up today’s guide that shows you how to measure company culture with all the essential metrics, tips, and tools to analyze it.

As you can see, maintaining a positive company culture is a great asset when it comes to attracting and retaining the best talents out there. Additionally, it can also increase your company’s profitability by improving the productivity and innovation of your employees!

If you want to find out more about workplace culture, here’s a guide that shows you how company culture shapes employee motivation.

Topic(s):
Company Culture