Why Company Values Are Falling Short (New Data)
A New Study Of 4,360 Employees And Leaders Reveals Serious Problems (And Solutions) For The Majority Of Company Values
Virtually every organization has a set of core company values; guiding principles that help employees tell good from bad, right from wrong, proper from improper. But while they should deliver tremendous benefits, this new study of 4,360 employees and leaders reveals that the majority of company values are falling short.
Most corporate values are not sufficiently detailed, not discussed enough, and not deeply embedded into the workforce. But when company values are executed well, employees are roughly 200% engaged than in companies with poorly implemented values. Among the key findings from this study are:
- Employees are 115% more engaged when their organization has a well-defined set of company values
- Only 24% of organizations have detailed what specific behaviors are necessary to live their company values
- Employees have 107% higher employee engagement when their company has detailed what specific behaviors are necessary to live their company values
- Companies that discuss their values daily have 37% higher employee engagement than companies who discuss their values yearly
- Only 21% of companies embed their company values into their performance appraisals (but people have 80% higher employee satisfaction if they do)
- Only 20% say that their company always hires people who fit well with their company values
- Employees are 135% more engaged if their company always hires people who fit their company values
- Only 33% of people believe that their direct manager holds people accountable to the company values
- Nearly a third of people believe that highly skilled employees can always or frequently get away with not living the company values
VIDEO OVERVIEW OF THE COMPANY VALUES STUDY
FINDING #1: Fewer than half of employees feel strongly that their organization has a well-defined set of company values.
How well has your organization defined its core values? Nearly half of employees strongly agree that their organization has a well-defined set of company values.
While those are positive results, it's important to note that there's a significant difference between "strongly agreeing" and only "agreeing." People who strongly agree are 22% more engaged than those who merely "agree." And those who strongly agree have 115% higher employee engagement than those who strongly disagree.
FINDING #2: Fewer than a quarter of organizations have detailed what specific behaviors are NECESSARY to live their company values.
While having a strong set of corporate values is critical, this study finds that only 24% of people think that the company has detailed specific behaviors are NECESSARY to truly live the company values. Obviously, if people don't know the precise behaviors necessary to live the company core values, even a seemingly clear company value will be ineffective.
People whose organizations have thoroughly detailed what specific behaviors are necessary to truly live the company values have 107% higher engagement than people at companies who have never detailed those behaviors. Simply telling employees that a core value represents the right thing to do is insufficient if that value is not detailed with specific behaviors.
FINDING #3: Fewer than a quarter of organizations have detailed what specific behaviors would VIOLATE living their company values.
Similar to the previous finding, corporate values are far less powerful if employees don't know exactly what behaviors would violate those core values.
For company core values to actually drive and improve performance and the company culture, a core value has to be more than slogans or a poster on the wall. People whose organizations have thoroughly detailed what specific behaviors would violate the company values have 63% higher employee engagement than people at companies who have never detailed those behaviors.
FINDING #4: The more often your company discusses its corporate values, the higher your employee engagement.
Far too many organizations believe that it’s sufficient to discuss their company values occasionally and then trust that the workforce will somehow go live those values.
What’s clear from this data however is that the more frequently leaders discuss the company values, the higher their employee engagement. While many companies think that discussing corporate values would be overkill, the truth is that discussing the values daily drives far better results.
FINDING #5: Too few organizations their company values into their performance appraisals.
If an organization truly believes that its company values are important, then employees should be able to find each company value embedded throughout the company culture, including performance appraisals. While most performance appraisals focus exclusively on how well an employee performs the technical aspects of their job, a values-driven organization needs to add each core value into their annual reviews.
If the core company values aren't important enough to add into performance appraisals or other workforce management processes, are those company values really that important? People at organizations where performance appraisals assess how well employees are living the corporate values have 80% higher employee satisfaction than people at companies where that's never the case.
FINDING #6: Very few employees believe that everyone lives the company core values on a day-to-day basis.
If only 13% of employees feel like everyone is always living their company values on a daily basis, can we really say that the company has a strong set of corporate values? If our company core values are just something we talk about for investor relations or social media, and not something that employees and leaders live every single day, is this truly a values-driven organization?
While it seems acceptable that 53% believe employees frequently live their company core values on a day-to-day basis, people who say "always" have 11% higher employee engagement than those who say "frequently."
FINDING #7: Fewer than a quarter of companies hire people who fit well with their company values.
Your ability to build a corporate culture with strong corporate values will be predicated on your ability to hire people that fit those corporate values. And unfortunately, only 20% say that their company always hires people who fit well with their company values.
This doesn’t just impact your hiring, it also dramatically affects every employee who’s already working at your organization. The better you hire people who fit the corporate values, the higher your employee satisfaction.
FINDING #8: Only a third of direct managers hold people accountable to their company values.
It's one thing to have a well-defined set of company core values, it's quite another for managers to hold people accountable to those values. And only 33% of people believe that their direct manager holds people accountable to the company values. Once the general workforce sees that the core company values are optional and don't really impact employees' performance reviews, compensation or careers, it will be incredibly difficult to build a corporate culture around those values.
FINDING #9: Around a quarter of CEOs are seen as holding people accountable to their company values.
As troubling as the previous finding was, this finding is even more problematic. Company values often originate from the CEO (or the senior leadership team), so it's a serious problem when only 26% of people believe that their CEO holds people accountable to their company values. Core values are beliefs that should guide every employees' behavior, whether they're an established CEO or a brand-new frontline hire. Any hint of unequal treatment will drastically undermine support for a companys core value.
FINDING #10: Fewer than half of employees believe that practicing the organization's values is critical to their career success.
Why drives employee recognition and career success at your company? Is it attendance, sales, productivity, longevity, or living the company values? While there's not an a priori correct answer, if having an organizational culture built on your company core values is important, then you'll want to see more than 41% of people say that practicing the company core values is always critical to their career success.
Of course, making core values a key part of employee recognition and career success will take continuous improvement. For example, consider a previous finding from this study that only 21% of people say their performance appraisals assess how well employees are living the company values. Adding the company core values into performance reviews would be a relativity simple place to start infusing core values into career success and employee recognition.
FINDING #11: Nearly a third of people believe that highly skilled employees can always or frequently get away with NOT living the company values.
How much will employees believe in a corporate culture and a company's core values if they see that a highly-skilled employee can get away with not adhering to the company values? While it doesn't happen in every company culture, 10% of people say it always happens at their organization and another 21% say it frequently happens.
Imagine that your organizations culture has a core value of respect or integrity or diversity. Now imagine that certain employees, because of their in-demand skills or hard work, are allowed to flout those values. Or imagine that business partners or a large customer are allowed to disregard an important core value of yours. Any of these situations would greatly undermine employees' support for, and belief in, the core company values.
FINDING #12: Nearly half of the workforce feels personally aligned with theIR company values.
The good news is that almost half of employees feel that their personal values are aligned with the company values. If many of your employees desire to work at an organization that prioritizes corporate responsibility, for example, you'll want to ensure that corporate responsibility is featured among your core values. And of course, you'll want to ensure that your employees and leaders are living that core value on a daily basis.
In recent years, more companies have adopted values around corporate responsibility, sustainability and incorporating diverse perspectives. While that's wonderful, this study shows that there is still work necessary to infuse those values into every facet of our daily operations and workforce management.
FINDING #13: Just over a third of people think their company values represent the most important issues for the organization's success.
Most organizations create their core company values to be a guiding principle for integrity, corporate responsibility, customer service, and more. But are those the most important issues to address in your company values?
Only 35% of employees think their company values represent the most important issues for the organization's success. Even if the core company values are well-designed and implemented, does that matter if an organization has selected the wrong core values? If your organization achieves sales growth .through its glowing customer stories, shouldn't our values prioritize customer success?
FINDING #14: Four out of ten people feel that their company values have a meaningful impact on how they perform their job.
In an ideal world, everyone in your organization would feel that the company values have significant relevance to how they perform their jobs. In reality, 40% say that the company values have a meaningful impact on how they perform their jobs.
FINDING #15: Fewer than a quarter of people feel their company values have a meaningful impact on how their coworkers perform their jobs.
While 40% of people say that "the company values always have a meaningful impact on how I perform my job," only 21% say that their coworkers feel similarly. It's not unusual in social science research to see gaps between how people see themselves vs. how they see others, but this is a significant gap even by research standards.
FINDING #16: Four out of ten people say that their company values have a meaningful impact on whether they keep working at their current company.
While company values are not the top issues determining whether an employee quits or stays, core values do have an impact. As you can see, 39% of people say that company values always have a meaningful impact on whether they decide to keep working at this company.
Every company should ask to what extent their core values are improving the employee experience. Are your company values a big part of your recruiting process, and if so, are you actually live those corporate values? Do your company core values encourage personal growth, integrity, or corporate responsibility? And if so, are those real parts of an employee's lived experience on the job?
FINDING #17: More than a third of employees believe that their company values have meaningfully benefited their customers/clients.
Customer service and/or prioritizing clients are among the most common core values for businesses. And yet, only 37% of people believe that the company values have meaningfully benefited customers and/or clients.
This could be the result of company values that are poorly defined or too vague. Or it could stem from and lack of effective implementation and adherence to corporate values. This study provides evidence for both arguments. For example, only 24% of people think that the company has detailed specific behaviors are necessary to truly live the company values. And only 13% of employees feel like everyone is always living their company values on a daily basis.
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