Knowing your own organisational culture is key to hiring people that will work well in your company. This is because understanding your own organisation helps you better assess person-organisation fit – the degree to which an employee and employer are compatible in terms of values, beliefs and behaviours.
But what is organisational culture made up of? And how can you learn what yours is?
Finding a missing piece of the puzzle
In order to assess person-organisation fit, you need to know two things: the person and the organisation. Here, we focus on the organisation.
A good way to see person-organisation fit is to think of your business as a puzzle with a missing piece. When you hunt through the free pieces, the only way you’ll know which one can fill the gap is by knowing what shape the gap is in the first place. Finding a good fit means knowing what’s going to fit.
As with knowing what kind of employee will fit in your organisation, the only way to know which puzzle piece will fit is to know the shape of the gap.
Though there are many ways to conceptualise an organisation’s culture, one of the most influential models in the research literature is the Organisational Culture Profile. In a widely cited paper, Charles O’Reilly, Jennifer Chatman and David Caldwell* break down organisational culture into eight distinct areas:
- Innovation and risk-taking
- Attention to detail
- Orientation toward outcomes or results
- Aggressiveness and competitiveness
- Emphasis on growth and rewards
- Collaboration and team orientation
They argue that these collectively are the components of workplace culture. When individuals’ preferences for a certain configuration of values match that of the company they’re joining, a good person-organisation fit is found.
How can you understand your organisational culture?
It’s not as simple as measuring hard things like profit or customer retention rates, as organisational culture is softer than this. Sometimes the best way to gauge organisational culture is to observe and talk with your employees to see what their perspective is. Having current employees fill out a survey judging the firm on the eight factors of organisational culture outlined above is one possible method for taking a detailed look in the mirror.
Person-organisation fit is predictive of turnover – the better the fit, the lower turnover.
There are, however, a couple of general metrics you can watch that are indicative of whether your organisational culture is positive or negative.
The first is employee referrals – what percentage of your new hires come via referrals from current staff? People won’t recommend a company they hate working for to their friends, so a high referral rate is a good sign.
The second is employee turnover – what percentage of your employees leave and are replaced in a given time period? High turnover can suggest many things, one being an unhealthy organisational culture. Indeed, O’Reilly and colleagues in the aforementioned paper found that person-organisation fit was predictive of turnover 24 months after being hired – the better the fit, the more likely it was an employee would stay.
Clearly, both of these metrics are going to vary by industry – some experience more turnover as a result of their market than others. But tracking this data allows you to monitor any changes over time that might suggest your organisational culture is shifting in a positive or negative direction.
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* O’Reilly, C. A., Chatman, J., & Caldwell, D. F. (1991). People And Organizational Culture: A Profile Comparison Approach To Assessing Person-Organization Fit. Academy of Management Journal, 34(3), 487-516.