KPIs to Measure Company Culture Success

  • Brace
  • January 17, 2018
  • 8 min

Your company’s culture essentially defines who you are as a brand and as a corporate entity. Culture can be described as the personality of the company and it’s palpable in every interaction between those who work there, and in the beliefs and policies of the organization. We’ll cover KPIs to track your company culture success and give insights on how to measure it in real-time.

What Is Company Culture?

Company culture is the values, ideas, habits, goals, and mission that structure your company’s (and employees’) actions and identity.Because company culture exists at the core of every company, it’s a potent driver of the overall success of the organization. Over 90% of executives and 88% of employees feel that culture is integral to business success. A positive company culture improves efficiency, performance, motivates employees, increases revenue, and enhances public reputation. Whether or not you consciously cultivate company culture, it remains an underlying factor in the way your organization operates.

6 Benefits of Measuring Corporate Culture

When you take the temperature of your company, you gather valuable information about your strengths and weaknesses as an organization. Knowing where your weaknesses lie tells you where your opportunities are for improvement. Getting insight into company strengths allows you to build on strong foundations to grow your company.

In order to grow in a positive direction, it’s essential that you have insight into your existing company culture. When you measure company culture, you gain a more profound understanding that is advantageous to both employees and management.

Benefits of Measuring Culture:

#Organizational/Company BenefitFunction and Value
1.Identify specific areas for improvementThis includes workplace aspects like employee development, flexible hours, the customer experience, and others that your culture may not be getting right.
2.Focus on the right elements of employee engagement.Knowing the right screws to turn improves employee engagement in the workplace. Companies with highly engaged employees see a 20% increase in sales and a 10% increase in customer ratings.
3.Reduce employee turnover.For an employee making just $40,000 a year, the turnover cost is estimated at $16,000 for the employer, and the price only rises with the team member’s specializatiol. Intangible costs to high turnover rate include low employee morale, lost knowledge, employee adjustment period, damage to company reputation, and even lost customers.
4.Identify problems early.The best time to stop a problem is before it starts. By measuring company culture, you can see when things start going south and take actions.
5.Fine tune the employee experience.Insights from your company culture measurements tell you where employees are struggling. Use it to fix these and improve retention and results through a better employee experience.
6.Monitor the success of culture fit and culture add.New employees bring new elements to your company. If measurements like your turnover rate suddenly skyrocket, it might be a sign your culture fit/add hiring needs to be tweaked.

 

Top KPIs To Measure Company Culture

Data-driven methods to assess the quality of your business culture are an accurate thermometer for your organization and workplace culture. We’ve compiled the 3 most effective “Key Performance Indicators” (KPIs) to help fortify and grow a successful and productive company culture.

1. The Employee Turnover Rate (ETR)

One of the key indications of a dysfunctional workplace culture is when the employee flow-through or attrition rate increases. Of course, you want people to be ambitious, and being flexible about hiring or firing is sometimes necessary. However, when workers consistently leave after a few months, it’s usually a bad sign.

ETR is a great metric to understand how stable your workforce is. You can calculate ETR by measuring the rate of employee retention relative to industry averages, or by using past data on employee turnover. This includes the number of terminations, resignations, retirements, and new hires in a given time period.

Compiling an annual or monthly ETR is an excellent metric to monitor the consistency and stability of your workforce, and a successful company culture can impress with a low ETR.

2. Employee Net Promoter Scores (ENPs)

ENPs offer a different angle on how your business culture is developing. This KPI seeks to measure how engaged your employees are, which offers a deeper perspective into how well the company culture is thriving.

Transferring the logic of Net Promoter Scores, which are used as proxies for customer satisfaction, to employee satisfaction and loyalty, ENP surveys seek to understand whether current or past staff would recommend their workplace to friends or family as a positive place to work.

Rating their opinion from 1 (unlikely) to 10 (certainly), ENPs produce an index ranging from -100 to 100 that measures the willingness of employees to recommend a company’s workplace to others. With a score for every employee, you can aggregate an average statistic for the workplace. Conducting these surveys anonymously is beneficial for reducing bias. Regularly calculating ENP can help you learn more about the success of your company culture.

3. Employee and Manager Satisfaction Score

Vibrant company culture doesn’t just come from above but is often driven from below through Bottom-Up Feedback. The final metric, Employer and Manager Satisfaction Scores, builds on this knowledge to provide a useful new perspective. These scores are also survey-based and show how satisfied workers are with the way they are being guided and managed. It brings to the surface elements of the employee-manager relationship, such as proper skill utilization, adequate training opportunities, and overall staff support or guidance.

The method of calculation is similar to that of ENPs. The best way to do it is to create company-specific surveys asking employees how they would rate their managers. Again, you can come up with average scores for individual managers to see how well management is doing.

Key Elements & Metrics of Corporate Culture

Measuring your company culture in detail means knowing what it’s made of, and how each part moves. Of course, organizational culture is a little too large and complex to know every iota. But you can know and monitor the core aspects of your workplace culture.

Building off the workplace elements used by the employer rating platform kununu.com, we found the 7 dimensions that define company culture. We did this by asking 3 questions for each dimension: Can it be tracked? Does it give important insights? Can it be benchmarked?

Here are the 7 workplace dimensions you can measure and track:

  • Communication
  • Interesting Challenges
  • Leadership Effectiveness
  • Team Spirit
  • Work-Life Balance
  • Working Conditions
  • Work Climate

And the glue that holds them all together…

  • Workplace Mood

>> Find out all the details of these company culture dimensions here. <<

The Basics of Measuring Change in Company Culture

“We all know that what gets measured gets managed…we’re really deluding ourselves if we don’t admit that many people still see culture as this fuzzy thing.”Norm Sabapathy, Executive Vice President, People – Cadillac

The Cadillac executive’s words about company culture ring true. To change something you have to understand it. KPIs give you a scorecard of your cultural performance, but they often say more about the past than the present. Beyond KPIs, the key to accurately tracking real-time corporate culture is regularity and feedback. Continuous, 360-degree feedback is necessary to understand what employees and managers feel and experience. This means:

  • Weekly employee surveys about cultural dimensions
  • One on one meetings
  • Channels for continuous, open feedback

The information then needs to be converted into trackable data. After all, what makes company culture so difficult to grasp is that it’s not just a number but a feeling, an attitude, and an interconnected network between workplace, worker, and boss. Harnessing this detail-level of insight is valuable. And like all things worth doing, it’s also difficult. Luckily, a look into digital tools offers solutions to overcome these hurdles.

Use the Right Tools to Create a KPI-Based HR Strategy

Learning how to measure company culture is integral to the success of your organization on all fronts. From upper management all the way down to the customer, company culture plays a leading role. However, measuring company culture can be time-intensive. Creating, conducting, and collating the necessary surveys takes a whole team. And to be effective, this needs to be done every week.

Thankfully, digital tools help you keep pace by conducting weekly surveys, tracking the results, providing a platform for open feedback and communication, and doing the grunt work for you. These together turn feedback into actionable insights to track company culture and motivate your team. No headache required.

Learn more about kununu engage and start turning employee insights into stronger company culture.

TRY FOR FREE!

kununu engage is an application that allows you and your entire company to share continuous and anonymous feedback about what working in the company is like. This insight and transparency can help a company function better and build a stronger company culture.

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