Culture, Climate, Engagement, Experience? What’s the difference?

Over the past few years we have seen HR managers shift their title to directors of “People & Culture”. At the same time, scrutiny into ethical failures across many industries has been prompting leaders to re-think how they assess and govern organisational culture.

It’s an interesting shift, because Australia is a highly individualistic society. When it comes to people and performance we’ve tended to focus on the importance of individual talent, motivation, personality and morality. However, the reviews of industry failures have shown that we’ve vastly underestimated the impact of the context that we’re in on our behaviour as individuals. What is encouraged, rewarded, supported and expected, strongly influences our behaviour. For example, in a recent study across aged care organisations, we found the difference in customer service focus was three times larger between organisations, than it was between roles within organisations (e.g., frontline customer facing vs back-office staff).

So how do we assess this cultural context? Is a culture survey different to employee opinion, organisational climate, employee experience or engagement surveys? Regardless of the label, most of the time staff surveys are trying to measure the same thing - the nature and quality of the work environment, and the impact of that environment on the attitudes and behaviour of staff at work. That work environment is what academics in psychology tend to call “organisational climate”, and management schools tend to refer to as “culture”.

Of employee attitudes and behaviours, employee engagement has been the predominant label for what organisations have been interested in measuring for over a decade - employees’ personal investment in and advocacy for their organisation. However, organisational culture is also measured with a view to supporting and driving other specific outcomes, for example, employee safety, customer service, innovation, diversity, risk or employee voice. A welcome addition has been the increased interest from organisations in understanding how their work environment impacts the wellbeing of their employees.

The bottom line is that the work environment (however we label it) is important because there is evidence that it is linked to important organisational and individual outcomes such as customer satisfaction, employee injuries and accidents, wellbeing, turnover, and of course performance. For example, in the NHS in the UK it has been linked to patient mortality rates.

What is organisational culture?

Although technically slightly different, the terms climate and culture are often used interchangeably when describing organisations (listen to a podcast interview about this with Dr Louise Parkes here).

Culture often refers to more deeply embedded beliefs, assumptions and values, that may or may not be conscious or deliberate. These beliefs and values are strongly influenced by the founding leaders and members of an organisation, and can be shaped by external factors such as the economic climate, how competitive the industry is, the major professions that people belong to (think nurses or doctors), and national culture variables as well (such as Power Distance which strongly influences hierarchical relationships and leadership style).

The organisational climate reflects, and is the expression of, these underlying beliefs and values. It is the shared perceptions that people have about their work environment – the structure, systems, policies, practices and behaviours in their organisation, that combined, make up “the way things are around here”. Early in the formation of an organisation these systems and practices are created to align with the cultural values and beliefs of founders, and serve to reinforce the culture. Over time, as organisations grow and the impact of individual leaders diminish, systems and practices change, and they in turn influence what is deemed to be important (values), rounding the cycle and becoming drivers of culture. This is why we often see gaps in alignment between ‘espoused’ culture – the values in the plaque on the wall, and the actual or enacted culture that has gradually been shaped by the systems, policies and procedures that have been implemented further and further from the original setting of organisational vision and values

How can you measure organisational culture?

Since culture is about people’s perceptions of the work environment, the best way to measure it is through surveys of all the people who work in an organisation – including managers, staff, volunteers, all locations and different work units.

Xref Engage's 7Ps Model is one way of organising the many systems and practices into manageable “chunks” or factors. It is empirically derived, and represents the way people think about their work environment.

Benchmarking is also helpful when interpreting perceptions of the work environment, as there tend to be large industry differences reflective of the environment the organisation is operating in. This can help organisations understand what is unique, and perhaps a competitive advantage, in their culture. It also highlights where things have gone drastically astray.

What can organisations do to change their cultures?

Of course, one of the biggest influencers of culture is leadership. This is through personal role-modelling, leadership style and communication from leaders, but also through leaders’ organisational power – their ability to change the work environment through structures, policies, processes and reward systems.

Culture is all about the whole system, so there’s really not just one lever to change, but a suite of systems and processes that need to work together to encourage, support and reward the values and behaviour that you want. This means embedding core values into all your people practices from selection, orientation, training, performance management and KPIS, rewards, as well as really visible things like office furniture and set-up, uniforms, traditions, and celebrations.

What about Employee Experience?

Good question! Emerging from a marketing perspective seeking to understand and improve the ‘customer experience’ (and hence customer satisfaction and loyalty), organisations are translating the same techniques to assess and improve the ‘employee experience’. Clearly, employees' perceptions of the work environment are informed by their experience of it. An annual or in-depth climate and engagement survey captures employees’ experiences of a range of systems, practices and procedures. However, employee experience feedback aims to capture this information in more detail at particular touch-points of the employee life-cycle. Recent improvements in technology have enabled more interactive, timely assessment of these touch-points. For example, to better understand the onboarding experience, employee feedback might be sought at the end of their first day, their first week, and their first month in the job, and the information used immediately to address any issues as they occur. There are many touch-points in the staff journey - from the recruitment process through to exiting the organisation, and even outside the organisation – for example including the commute to work. An employee engagement survey can identify which of the many touch-points are critical for staff engagement, and an experience survey can dive into the detail of how to improve in that particular system or process.