Key Highlights

• Investing in company culture is a strategic advantage that drives productivity, attracts top talent, and fuels sustainable growth.
• Company culture directly impacts employee engagement, performance, retention, and long-term business success.
• A strong company culture goes beyond perks, it’s defined by shared values, behaviors, trust, and how work truly gets done.
• Improving company culture requires intentional action, from hiring for values and encouraging feedback to rewarding performance and embracing flexibility.
• Measuring company culture with clear metrics helps organizations strengthen engagement, innovation, wellbeing, and adaptability to change.

Many employees are still recovering from the lasting effects of the pandemic, and it continues to shape how they experience work, and the company culture. While employee engagement was steadily rising before 2020, Gallup’s State of the Global Workplace report shows that only 23% of employees feel engaged at work in 2024.

Strengthening company culture is one of the most effective ways HR leaders can begin to reverse this trend. Whether your organization wants to elevate an already healthy culture or repair one that’s struggling, focusing on the fundamentals of company culture can drive meaningful change. In this guide, we’ll share practical tips to help move your culture in the right direction.

What Is Company Culture?

Company culture is often misunderstood. Many organizations mistake perks, benefits, or office design as culture, but those are only outcomes of a healthy culture, not the culture itself.

Former Best Buy CEO Hubert Joly defines company culture as “the essential elements of how an organization and its employees behave, as well as its governing beliefs and principles.” In simple terms, it’s how things actually get done within an organization.

How Do Employees Really Experience Your Company Culture?

Do your employees genuinely enjoy their work? Do they feel motivated to perform at their best? And perhaps most telling, would they recommend your company to friends or family?

Company culture can feel abstract and subjective, which makes it difficult to measure. Yet despite its complexity, culture plays a powerful role in shaping how employees think, feel, and behave at work.

Why Company Culture Directly Impacts Business Performance

A strong company culture isn’t just a “nice-to-have.” It has a measurable impact on business outcomes. Forget surface-level perks like free snacks or trendy office spaces, healthy company culture shows up in higher employee engagement, improved productivity, and lower turnover.

That’s why actively monitoring and strengthening your organization’s culture is essential. In this article, we’ll break down what defines a great company culture and introduce clear, actionable culture metrics you can use to measure and improve each element.

The Human Side of Company Culture

Company culture is reflected in what behaviors are encouraged and rewarded, and which ones are discouraged. It lives in everyday interactions between employees, managers, leaders, and customers.

You can see company culture in how meetings are run, how feedback is given, how performance is managed, and how learning and development are prioritized. It shapes how you hire, engage, and retain talent, and ultimately determines whether employees feel connected to their work and your organization.

At its core, company culture is about people. When done right, it creates an environment where employees can thrive, and where businesses can grow sustainably.

10 Ideas for Improving Company Culture

1. Find People Who Fit

• Hire for values alignment as well as skills
• Showcase company culture during the hiring process
• Prioritize long-term cultural fit over short-term needs

2. Integrate Values Into Everyday Work

• Reinforce values during onboarding and meetings
• Align internal and external messaging with company values
• Use values to guide decisions and performance management

3. Encourage Ongoing Feedback

• Replace annual reviews with continuous feedback
• Use pulse surveys to understand employee sentiment
• Create open channels for two-way communication

4. Adapt as the Organization Evolves

• Build a culture that can grow with change
• Avoid rigid practices that become outdated
• Ground culture in timeless principles, not trends

5. Address and Repair Broken Culture

• Clearly define the culture you want to build
• Empower leaders to model and drive change
• Align systems, structures, and processes with cultural goals

6. Reward Employees Fairly

• Offer competitive and equitable compensation
• Reduce financial stress to support performance
• Balance pay with meaningful non-monetary rewards

7. Recognize Individual Contributions

• Acknowledge effort and impact in real time
• Balance individual recognition with team-based praise
• Tie recognition to company values and behaviors

8. Focus on Retention and Transparency

• Communicate company goals, challenges, and direction openly
• Help employees envision long-term growth with the company
• Build trust by being honest and consistent

9. Promote Teamwork and Collaboration

• Create spaces and opportunities for collaboration
• Encourage relationship-building across teams
• Support social and team-building activities

10. Embrace Flexibility

• Offer flexible work arrangements and schedules
• Support work–life balance through trust and autonomy
• Show employees they’re valued, trusted, and respected

Benefits of Measuring Company Culture

Measuring company culture may sound abstract at first, but using clear, data-backed methods to track and improve culture delivers tangible business benefits. When organizations understand how their culture is experienced, they can make smarter decisions that improve performance, engagement, and retention.

Below are the key benefits of measuring company culture, and why it matters.

Attracting and Retaining Top Talent

People want to work for companies with a positive company culture, and they’re more likely to stay when they find one. A strong culture directly contributes to lower employee turnover and stronger employer branding.

By measuring company culture, organizations gain insight into what attracts candidates and what keeps employees committed long term. This allows HR teams to refine their employee value proposition and improve retention strategies.

Strengthening Employee Engagement

Research consistently shows that company culture is one of the strongest drivers of employee engagement. Organizations with engaged employees benefit from higher productivity, reduced absenteeism, and increased profitability.

Tracking culture-related metrics helps identify what’s working and where engagement may be slipping, making it easier to reinforce behaviors and practices that keep employees motivated and connected.

Driving Employee Performance

A supportive company culture encourages employees to perform at their best. When shared values are embedded into performance management, employees understand not just what is expected, but how success is defined.

Measuring the connection between culture and performance reveals opportunities to strengthen alignment, reinforce values, and motivate consistent high performance across teams.

Encouraging Innovation and Creativity

Company culture shapes how people collaborate, share ideas, and solve problems. A culture that promotes trust and psychological safety gives employees the freedom to experiment and innovate.

By measuring how teams collaborate and contribute ideas, organizations can identify barriers to innovation and create environments that support creativity and continuous improvement.

Responding Effectively to Change

Company culture is not static, it evolves as the organization grows. Regularly measuring culture allows leaders to spot changes early, rather than reacting only when issues like turnover or disengagement become visible.

Ongoing culture measurement enables leaders to proactively influence behaviors, reinforce values, and adapt to change while maintaining a strong and healthy company culture.

Key Elements of a Strong Company Culture and How to Measure Them

Measuring company culture requires a mix of qualitative and quantitative data. Organizations with healthy cultures often show high engagement, low turnover, and strong employee advocacy, while toxic cultures tend to see disengagement, absenteeism, and attrition.

Below are ten essential elements of a strong company culture and how to measure each one.

1. Shared Values, Mission, and Purpose

In a strong company culture, employees understand and believe in the organization’s values and direction.

How to measure it:

• Include values-based questions in pulse surveys
• Reinforce values in performance reviews

Key metrics:

• Employee survey results
• Values-linked performance feedback

2. Employee Sentiment

Employee sentiment reflects how people feel about their work and workplace at any given time.

How to measure it:

• Engagement surveys
• Employee Net Promoter Score (eNPS)

3. Trust and Transparency

High-trust company cultures experience lower turnover and faster innovation. Trust exists between peers, managers, and leadership, and extends to customers and stakeholders.

How to measure it:

• Employee surveys focused on trust, integrity, and openness
• Employee involvement in decision-making and feedback loops

4. High Performance

A high-performance company culture enables employees to meet goals while feeling supported and motivated.

How to measure it:

• Clear goal-setting aligned with company objectives
• Regular 360-degree performance reviews

Key metrics:

• Average performance ratings
• Top performer retention

5. Fair Compensation

A credible company culture backs its values with fair, transparent pay practices.

How to measure it:

• Compensation benchmarking against market data

Key metrics:

• Market ratio
• Compa-ratio

6. Recognition and Appreciation

Recognition reinforces positive behaviors and strengthens company culture by making employees feel valued.

How to measure it:

• Usage of recognition tools
• Pulse surveys on appreciation

Key metrics:

• Recognition participation rates
• Appreciation survey scores

7. Development and Career Growth

A strong company culture invests in employees’ long-term growth, not just their current roles.

How to measure it:

• Learning and development participation
• Internal mobility tracking

Key metrics:

• L&D engagement rate
• Promotion and internal hire rates

8. Employee Wellbeing

Wellbeing is a critical pillar of modern company culture, especially as stress and burnout drive attrition.

How to measure it:

• Uptake of wellbeing programs
• Absenteeism trends

9. Diversity, Equity, Inclusion, and Belonging (DEIB)

Inclusive company cultures ensure employees feel respected, supported, and able to succeed.

How to measure it:

• Workforce demographic analysis
• Hiring, promotion, and turnover data

10. Talent Acquisition Effectiveness

Company culture directly influences how attractive your organization is to candidates.

How to measure it:

• Quality of hire
• Time-to-fill open roles

Why Does Company Culture Matter?

Company culture is the foundation on which every successful organization is built. When employees’ values, goals, and needs align with the company culture, they’re far more likely to enjoy their work and feel connected to where they are. In these environments, people don’t just show up, they feel engaged, supported, and motivated to stay.

A strong company culture signals that people come first, not just output or revenue. When employees feel valued, the business benefits extend well beyond morale. Organizations with healthy cultures often see measurable improvements across performance, innovation, and long-term growth.

The Business Benefits of a Strong Company Culture

Higher Employee Engagement and Productivity

Employees who feel aligned with their company culture are more engaged in their work, leading to stronger performance and better outcomes. Yet engagement remains a challenge, with only about one-third of employees actively engaged at work, highlighting the opportunity for organizations to invest more intentionally in culture.

Greater Creativity and Innovation

A positive company culture empowers employees to share ideas, experiment, and collaborate. When people feel psychologically safe and supported, innovation thrives, giving organizations a competitive edge through better products, services, and solutions.

Improved Morale and Motivation

Employees who feel supported by a strong company culture are more resilient and motivated, even during periods of change or challenge. High morale encourages consistent effort and a stronger sense of ownership in day-to-day work.

Stronger Talent Attraction

Company culture plays a major role in employer branding. Organizations known for clear values, growth opportunities, and a positive employee experience are far more attractive to top talent, and candidates are more likely to apply when they believe they’ll thrive.

Higher Employee Retention

When employees feel genuinely cared for, they’re more likely to stay. A strong company culture builds loyalty and reduces turnover, helping businesses avoid the high costs of recruiting, onboarding, and training new hires, especially at a time when more than half of employees globally are actively looking for new roles.

Increased Revenue and Profitability

Engaged employees are more invested in delivering excellent customer experiences. Over time, this commitment translates into stronger client relationships, improved service quality, and increased revenue and profitability.

Culture and Business Success Go Hand in Hand

The link between company culture and organizational success is widely recognized. In our company culture survey, 94% of respondents agreed that culture directly contributes to business performance and long-term success.

In short, investing in company culture isn’t optional, it’s a strategic advantage.

Frequently Asked Questions (FAQ's)

What is company culture?
Company culture is the shared values, behaviors, beliefs, and ways of working that shape how employees experience an organization.

How to change company culture?
You change company culture by aligning leadership behaviors, systems, and everyday practices with clear values and desired behaviors.

How to create company culture?
Company culture is created by intentionally defining values, hiring for alignment, reinforcing behaviors, and modeling expectations at every level.

Why is company culture important?
Company culture is important because it directly influences employee engagement, performance, retention, and overall business success.

What does company culture mean?
Company culture means how work actually gets done in an organization, including how people communicate, collaborate, and make decisions.

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