Skip to content

Does Company Culture Impact Employee Engagement?

Company culture and employee engagement are two of the most important concepts for leaders to understand, especially in the context of managing organizational transformation and navigating the Great Resignation. Both organizational culture and employee engagement affect a company’s ability to attract and retain talent, but this does not mean that culture and engagement are synonymous. This post will provide a brief primer on both organizational culture and employee engagement. It will explain how they’re distinct but also how they work together to enable people and organizations to thrive.

The Importance of Creating a Company Culture

Culture is an organization’s internal environment. It is reflective of leaders’ values and priorities and culture informs how resources are allocated. Culture shapes how work gets done. As a result, culture can determine the outcomes produced by an organization. Externally, an organization’s brand, identity, and customer experiences are all shaped by its culture.

With culture, intentionality is key. Culture forms and shifts over time. Leaders have the opportunity to design and establish culture through their actions, stories, and the structures they introduce. People and organizations co-create the meaning that surround leaders’ actions to establish agreed-upon norms that help guide decision making.

Scaling up organizational culture can be a challenge, but it’s not impossible. As organizations grow and mature, there is a need to add systems and processes that enable effective delegation and execution. The introduction of processes can be interpreted as leaders’ values prioritizing control over flexibility. If employees perceive the shift of an abandonment of the early values, it may undermine their ability to identify with the organization and the sense of belonging they once felt. How leaders communicate around process can shape employees’ willingness to adopt those processes as a means of expressing the same values as before but with an even greater reach and impact.

An early mentor used to say, “The best and worst attributes of any organization are a direct reflection of the leaders at the top.” This is because organizational culture and employee experience are shaped by leaders’ values, priorities, and where they choose to invest time, energy, effort, and resources. As organizations recognize the opportunity to actively shape culture, they may enlist the support of a designed culture committee or other taskforce. This is only effective if and when that group aligns with a clear and compelling vision established by leadership. The committee itself likely will lack the authority and control over resource allocation necessary to hold people accountable and bring about meaningful organizational change. Alignment around the desired culture and how it will enable the organization to realize its goals and objectives is necessary for the work to be successful.

The Link Between Culture and Employee Engagement

Employee engagement is the state of being mentally and emotionally connected to an organization. Organizations care about engagement because it is positively correlated with retention of key talent and increased performance through the application of discretionary effort. When an organization is able to retain their best people and set them up to do great work, it increases the likelihood of success or progress both for the individual and the organization.

Engagement is an outcome of both internal and external factors. Examples of external factors that can influence engagement are government regulation, market trends, and even global pandemics. Many organizations measured all-time highs in engagement in 2020 during the COVID-19 pandemic because the last thing employees wanted to do in the middle of a pandemic was add voluntarily change jobs into the mix. Leaders typically focus their energy on the internal factors that influence engagement because these are the things that are within their scope of control. Internal factors include manager effectiveness, recognition, teamwork, availability of resources, support, or employee development, and, yes, organizational culture.

Keep employees engaged by developing a robust listening strategy. Schedule a demo to see how the Perceptyx platform can help.

So, if culture and engagement are related, what does an engaging culture look like? In short, an engaging culture is one that enables employees to anticipate gaining their desired measure of success. Not everyone has the same definition of success so person-organization fit can play a role here.

  • Employees who prioritize connection and affiliation tend to gravitate toward and be most engaged with people-oriented cultures.
  • Employees who prioritize growth and affluence tend to be more engaged by market-oriented cultures that stress competition and goal attainment.
  • Employees who prioritize efficiency and achievement tend to gravitate toward cultures that prioritize consistency and control.
  • Employees who prioritize flexibility and autonomy tend to gravitate toward cultures that prioritize creativity, agility, and innovation.

The Opportunity for Application

Culture and engagement are not synonymous, but they are both critically important to organizational effectiveness. Culture is the internal environment and engagement is an outcome of an experience that creates the anticipation of success.

Perceptyx partners with organizations in leading the way with measuring and managing both culture and engagement. The intersection of Perceptyx’s technology and expertise is leveraged by many of the world’s most admired companies so their people and organizations can thrive. (Read our customer stories to learn how we’ve helped other organizations like yours to thrive through a robust employee listening strategy.)

Is your organization’s culture aligned with its goals? Perceptyx can help you identify opportunities for improvement. Get started by scheduling a demo.

Subscribe to our blog

Opt-in for our weekly recap and never miss a post.

People Insights Platform

Drive Change, Deliver Impact


Employee surveys to illuminate the employee experience

Learn more about Ask product


Crowdsourced insights to engage your people on the topics that matter most

Learn more about Dialogue product


Lifecycle surveys and always-on listening to keep pace with your people

Learn more about Sense product


360 feedback and Intelligent Coaching to improve manager effectiveness

Learn more about Cultivate product

Getting started is easy

Advance from data to insights to focused action