A multiyear research into corporate culture using Glassdoor data reveals what distinguishes a good corporate culture from a bad one in the eyes of employees. It studied 1.4 million employee reviews to analyse the elements of corporate life that influence how employees rate culture.
The single best predictor of a company culture score is whether employees feel respected at work. Respect is nearly 18 times as important as the typical feature in our model in predicting a company’s overall culture rating, and almost twice as important as the second most predictive factor.
Leadership assessment is another particularly strong predictor of a company’s culture rating — four times more important than the average topic and twice as important as discussions of an employee’s immediate boss. When it comes to corporate culture, it seems, employees assign more of the credit (or blame) to the C-suite than to their direct boss.
Having supportive leaders, those who help employees do their work, who are responsive to requests, and have employees' backs is the most important predictor of a company’s culture score.
Leaders, of course, influence all aspects of culture, but being a source of support for employees is especially critical and is the leadership trait most closely associated with a highly rated culture.
The study found that employees are generally cynical about their employer’s core value statements. However, when employees complain that “managers pay lip service to core values“ or “a wide gap exists between cultural rhetoric and reality,” their negative sentiment doesn’t influence the company’s culture score much. In contrast, when employees praise leaders who “walk the talk” or “practice what they preach,” their positive assessment provides a big boost to a company’s culture score.
Having toxic managers - the bosses described as “horrible,” “poisonous,” or “toxic,” will negatively impact company culture scores. Unethical behavior, as a form of toxic management undermines corporate culture and exposes it to reputational and legal risks.
When it comes to predicting a company’s culture score, benefits were found to be more than twice as important as compensation. Compensation certainly matters but raising it does not have the potential of fixing a broken culture.
Among nearly 450 different types of perks mentioned by employees, coffee truly is the central perk. Unlimited meals, onsite breakfast, and free wine have a 100% positive sentiment among employees. While employees do not necessarily expect perks, they do appreciate them. A strong predictor of a high culture score are the company-organized social events, like team-building exercises, happy hours, and picnics.
Opportunities for education or personal development in their reviews, making learning and development the third most frequently discussed element of a company culture. Employees in particular value programs to match or reimburse college tuition and opportunities for exposure to senior executives.
Job security was one of the surprising elements, because we do not often think of it as an element of corporate culture. Job insecurity, however, weighs heavily on employees’ minds when they assess corporate culture. The larger the percentage of employees who talked about layoffs, outsourcing, or the possibility of getting fired, the lower the company ranked on culture.
Almost no one in the studied group had good things to say about reorganizations, hence the fewer people who mention reorganizations, the higher a company’s culture score. While you might associate the mention of reorganizations with layoffs and job instability, the data reveals that employee concerns on this issue speak to wider strategic issues for companies. When employees mention reorgs, they are much more likely to also discuss the pace of organizational change as too fast, inconsistency in strategy over time, and a lack of clarity about the company’s evolving strategy.
Overall, this is an excellent study that very clearly explains what matters most to employees. It is also practical, because companies can design culture interventions where they matter most to their people, to improve their company culture.
Sull, D., & Sull, C. (2021). 10 things Your Corporate Culture Needs to Get Right. MIT Sloan Management Review