HR Strategic Development and Corporate Culture
One of the reasons Human Resources has always struggled to become strategically involved within the corporate power structure is a lack of hard numbers. Any HR director who has tried to make a case that employee satisfaction is important for an organization’s overall performance is familiar with the frustrating response “Show us the data”. Without reliable, current research linking corporate culture with financial outcomes, HR is left with little leverage to effect change.
Recently, a number of research organizations have stepped up to fill this knowledge gap. One study conducted by the Forum for People Performance Management and Measurement is an excellent example. This initial analysis focused on identifying how organizational culture impacts the employee’s subjective experience.
Engagement and satisfaction levels (determined through surveys) were shown to be tied to customer satisfaction and response as well as financial outcomes. Not surprisingly, excellent communication was noted as one factor that significantly correlated with high performance.
The Forum plans to follow up with a study that looks more closely at the “how” of achieving good results. Human Resources professionals will want to pay special attention since the role of HR within the organization will be investigated in detail. Up-to-date information on how compensation, recruiting, performance management and employee development impact corporate success will be a valuable tool for negotiating to improve HR processes.
Why Is Corporate Culture Important?
An organization’s culture determines the way it approaches every aspect of business. This includes strategic planning, the internal power structure - it even defines what success looks like for the organization. When HR professionals fully understand the culture within which employees (from executives to line workers) are operating, it is easier to develop successful methods for achieving HR's objectives.
Organizational culture was described in a 1988 study in a way that is still useful today. The four archetypes are:
Passive - Conservative and bureaucratic, driven by conflict avoidance, flexibility and innovation are not highly valued in this system
Aggressive - Top down, authoritarian power structure, autonomy on the part of lower level employees is not considered beneficial
Competitive - Autonomy and personal high performance are valued and rewarded, may limit cooperation between employees if taken to an extreme
Cooperative - Team driven approach that values what each worker brings to the organization while focusing on achieving both personal and organizational goals
In aggressive and passive corporate cultures, HR is generally viewed as a purely functional unit within the organization. Any attempt to alter the status quo is likely to be met with significant resistance. However, in a competitive setting it is possible for HR to use its involvement in determining the compensation and performance evaluation structures to advocate for change. In a cooperative environment, HR is ideally positioned to use communication to positively impact employee engagement - driving greater profitability and customer satisfaction as a result.
