The development of culture within an organization is inevitable. In all organizations, culture can develop naturally over time as organization members interact with one another. Under these circumstances, the culture that develops may or may not facilitate or enhance organizational performance. On the other hand, the establishment and growth of a culture within an organization can be influenced by specific actions that management takes. Under these circumstances, the culture that develops will generally have a higher probability of encouraging effective performance within the organization than if the culture is left to develop naturally over time as organization members interact.

Figure 16.3 summarizes the steps managers can take to help create an organization culture that yields high performance.23 Each of the steps is discussed here:

1. Lead as Champion. Leaders in organizations must champion the organization climate. As such, leaders throughout the organization must explain repeatedly why the practices that help build organization culture are necessary and how such practices will benefit the organization. If the practices are new, leaders must convince organization members that the change is necessary.

2. Link Work to Organizational Mission. The purpose of an organizational mission is to clarify the purpose(s) of the organization. The mission statement helps employees understand why their organization exists. Helping employees understand how their work contributes to accomplishing the organizational mission is critical. Such understanding emphasizes the great importance of employee efforts to the success of the organization and helps them develop a sense of pride in their jobs and the work they do. If employees understand how their efforts result in the accomplishment of the organizational mission, commitment to working hard so that the mission can be accomplished will normally follow.

3. Track and Talk about Performance. All organization members should constantly be thinking about their individual performance. What is excellent performance? How can performance be improved? Why is excellent performance necessary? Why should organization members strive to be outstanding performers? Performance, by managers and nonmanagers alike, should be defined and tracked to monitor how suitably individuals are performing. As performance is tracked, corrective action should be taken, if necessary, to foster performance improvement. Also, employees generally like to know how well the organization as a whole is performing. When organization members receive regular communication regarding the performance of the entire organization, they tend to stay focused on contributing to that performance.

   

4. Build a Hierarchy of Objectives. As discussed earlier, a hierarchy of objectives is a set of objectives wherein the overall objectives of the organization are divided into subobjectives for all sections and levels of the organization. As objectives at lower levels of the organization are accomplished, they contribute to the attainment of objectives at the next-higher level. Although defining objectives at lower levels may be difficult, the effort used to develop the hierarchy will be well spent. Even employees at the lowest organizational levels will generally be more focused on performance when they see the cascading set of objectives in the hierarchy of objectives. Throughout the organization, objectives should be challenging and have obvious rewards to be earned when the objectives are reached.

5. Invest in Talent. Certain employees will have more talent to perform a job than others. As such, these talented individuals have a greater capacity for performance. Talented employees generally demand higher wages in the labor market than others. Management must recognize that although talented employees may be more expensive to hire and retain, such employees are normally an effective means to achieve better organizational performance. In addition, managers must do whatever they can to retain talented employees once they are hired.

   In addition to hiring individuals with the appropriate talent to improve organizational performance, management can invest in developing the talents of current employees. Through training, for example, management can focus on developing organization members’ abilities in order to improve organizational performance. Organizations that invest in and maintain employees’ work abilities send the message to all organization members that excellent performance is a top priority.

6. Recognize and Reward. Management needs to help employees learn to be high performers. As such, appropriate performance behavior needs to be reinforced or rewarded. Because research tells us that reinforced behavior tends to be repeated, as management reinforces appropriate performance, appropriate performance will tend to be repeated. Reinforcement can be monetary or nonmonetary. In certain instances, a simple, nonmonetary certificate in recognition of excellent performance can be as powerful a reinforcement as a monetary cash bonus. Recognition and reward practices within any organization should periodically be evaluated for possible improvement.

7. Hold Managers Accountable. The performance of managers should be tracked, with job-related progress being communicated to them both formally and informally. Maintaining this performance contributes to ensuring the success of a manager’s area of responsibility, which in turn contributes to the performance and success of the organization as a whole. Managers should understand what is necessary for employees to be high performers and advise, coach, and counsel them about how to improve their performance and reach performance goals. Given the critical contribution that employee performance makes to organizational success, managers should be held accountable for supervising that performance.

8. Build Organizational Commitment. Organizational commitment can be defined as the dedication of organization members to uphold the values of the organization and to make worthwhile contributions to fulfilling the organizational purpose. Research indicates that one way to build organizational commitment is to maintain an organizational focus on providing excellent customer service. Such a focus seems to result in higher job satisfaction, which, in turn, seems to help build stronger organizational commitment.25 Overall, this increased commitment to the organization seems to increase employees’ desire to remain in the organization and to focus on providing quality goods and services. Foundation studies in this area indicate that organizational commitment serves as a “psychological bond” that influences individuals to act in ways that are consistent with the interests of the organization.26