Time for a Rethink

By Dylan Flavell and Chris Morfesse

Many organisations grapple with the decision of focusing on either culture or employee engagement, and whilst these measures are often spoken about interchangeably, their differences are critical.

WHAT’S THE DIFFERENCE?

At its simplest, culture measures how an organisation works, whilst engagement measures how employees feel about an organisation. Culture describes the priorities, behaviours and collective work practices used to get work done, and is a strong predictor of organisational performance and individual performance. Employee engagement measures personal reactions and experiences of the workplace and is a useful predictor of individual performance.

Despite these critical differences, it is common practice for boards and executive teams to use engagement as a proxy for culture and in doing so, fail to gather critical data on the workings and health of their organisation.

WHAT’S THE IMPACT?

Take the example of Lion Air Flight 610 from Jakarta, Indonesia on the morning of October 29, 2018. Moments after take-off, the Boeing 737 MAX aircraft tragically plummeted into the Java Sea. With an investigation still underway, some key facts of the situation are now understood:

Safety processes and training were streamlined for efficiency, and system concerns were known by some, but not understood by all. These factors are both key aspects of culture, but would be overlooked by typical employee engagement measures. Streamlining processes to remove additional work burdens provide temporary relief to employees, whilst cross departmental collaboration and knowledge sharing is only detectable when you explore collective work practices that enable organisational performance.

Despite these incidents, Boeing has continued to record high employee ratings, including recently being recognised as the top-rated employer across three US states.

The confusion between engagement and culture was further highlighted through the Royal Commission into the Financial Services Industry in Australia, where high engagement was common in organisations of focus, despite the prevalence of significant cultural issues. Siloed work practices, information not being shared freely within and across the organisation, and a skewed focus on organisational and individual performance over customer experience were common cultural findings. The Royal Commission made it apparent that whilst employee engagement was often healthy, the operations of the organisation were unhealthy and unsustainable in an increasingly competitive market where customer experience and trust matter.

FROM DATA TO ACTION

When we look to pivot from data to action, another key difference between engagement and culture data is apparent. Because engagement measures how people feel, acting on this data in a way that addresses root causes is not easy or intuitive. The engagement question ‘I enjoy coming to work every day’ requires much more exploration (or lucky guesswork!) from a busy manager to effectively address that data point. Quality culture measurement, on the other hand, measures the behaviours known to support organisational and individual performance. ‘Authority is appropriately delegated so that people can act on their own’ provides reasonable clarity about where effort needs to be directed to enable change.

WHERE TO FROM HERE?

The decision to measure either culture or engagement should be an easy one; both are important but they are not the same in what they measure or what they predict. Importantly though, where boards, executive teams and leaders are concerned about having the data necessary to inform sustainable organisational performance and health, measuring culture is critical.


References cited above:

  • Organisational Culture and Employee Engagement: What’s the relationship? Kotrba, 2016
  • Valet, V. (2019). From Alabama to Wyoming, Meet America’s Best Employers By State 2019. Forbes. June 5, 2019.

For more articles and resources, visit our Culture page

Got a question? Contact us on hello@springpoint.com.au