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Core Values Shape Organizational Culture

Learn why values form the vital foundation of any organization's culture and how to use values to support thriving teams. Here's what the research says…

1. Shared core values are powerful.

"Effectiveness without values is a tool without a purpose." —Edward de Bono

When members of an organization are accomplishing meaningful work together from an underlying foundation of shared core values, purpose grows and teams become more effective. Leaders who strengthen Value Congruence and Person-Organization Fit find many benefits from shared Core Values:

Higher Levels of Commitment

When people feel their organization holds strong values and that those values align with personally-held values, commitment to the organization increases15,22. Researchers find that the link between values and commitment is strongest when values center on humanity and vision8; these values include1:

  • Adaptability
  • Cautiousness
  • Consideration
  • Cooperation
  • Courtesy
  • Creativity
  • Development
  • Economy
  • Forgiveness
  • Formality
  • Initiative
  • Obedience
  • Orderliness

Enhanced Communication and Trust among Leaders and Team Members

Perceived overlap between organizational and personal values correlates with greater trust, better communication, and stronger attraction to the organization6. Shared Core Values build trust, communication, and affinity because they help to:

  • Establish regular, open, and consistent communication
  • Create transparency for organizational decision-making
  • Address questions between team members and leaders
  • Ensure fair performance standards and performance management processes

Increased Career Satisfaction and Job Satisfaction

Researchers find that when individual values and company values overlap, both career satisfaction and job satisfaction increase—meaning a more fulfilled and engaged team7,19,22.

Stronger Health & Well-Being

Clear shared values and value congruence lower anxiety, work stress, and increase ethical practices17.

Job stress puts people at risk of burnout especially in some types of work. Burnout is a stress syndrome in response to work that includes emotional exhaustion, depersonalization, and feelings of diminished personal accomplishment. Improving value congruence and person-organization fit mitigates burnout19.

Researchers find that core values play a key role in predicting both burnout and engagement. When mismatched, core values contribute to burnout and decline, and when organizational and personal values are congruent, they bolster performance and efficacy14.

Reduced Turnover

Researchers find that high levels of Person-Organization fit increase tenure and reduce turnover19. Strong value congruence supports work satisfaction and longevity.

More Effective Recruitment

Perceived fit and value congruence impact active job seekers' job preferences—beyond the job's benefits (i.e. rewards, job security)4. Both organizations and job seekers seek people who embrace shared assumptions, beliefs, and values18.

High Impact Team Performance

There are two types of performance to consider:

  • Task performance, defined as performance directly relevant to assigned job duties.
  • Contextual performance, defined as activities that promote an organization's culture.

The impact of shared values goes beyond people's attitudes towards their job and their work. Shared values positively influence both task and contextual performance9. Additionally, Person-Organization fit indicates strong contextual performance from employees12.

2. Clarifying Core Values promotes fit and meaning.

Values Fit and Conformity - A Paradox.

When it comes to values, authenticity, dialogue, and shared understanding matter. When team members work to articulate important values that relate to important decisions and to align on how to understand and apply those values to their decisions, true alignment and consensus become possible. In contrast, when a team glosses over values at a surface level without building a deeper shared meaning, superficial conformity threatens. This paradox between values fit and conformity creates an ongoing, yet manageable, tension in organizations18. Thinking of values alignment as an ongoing active discussion, and not a destination to take for granted, helps leaders and teams to avoid mindless conformity.

Organizations are most successful at managing this paradox when leaders create an emphasis on values-driven decisions, actions, and interactions and help people feel comfortable expressing deeply held values as a driver for choices and proposals. When values are central and openly expressed, people make more meaningful contributions:

  • Team members advance in the organization
  • Commitment becomes stronger
  • Trust and communication build
  • Career and job satisfaction increase
  • Organizations grow10

The dark side of the shared values paradox is conformity. Leaders who shape values tightly and direct behavior with no flexibility or continuing dialogue create situations where employees conform to a façade, rather than a deeply held and authentically shared set of beliefs. Conformity18 leads to:

Unfortunately, only 27% of employees strongly agree that they believe in their company's values, and 23% of employees strongly agree that they can apply their organization's values to their work every day5. Leaders can enable teams to thrive using stories to bring Core Values to life and cultivate an environment to discuss, debate, share, and align around Core Values and sustain high-impact performance.

3. When individual values and organization values overlap, teams are more effective.

Researchers use two measurable concepts to reveal the overlap of values in organizations:

  • Person-Organization Fit measures the perceptions people have of their overall compatibility with the organization as a whole11
  • Value Congruence measures the degree to which an individual's values match the organization's values7

If Person-Organization Fit is high, Value Congruence also tends to be high. When people find a match between their values and their organization's values, they believe they are a good fit for the organization22. Research also shows:

  • Values are vital for retaining team members. Core Values explain 13% of the variation in people believing they are a good fit with their organization11.
  • Perceived shared values strongly influence a person’s sense of Person-Organization Fit, whereas demographic similarity (e.g., age, sex, race, and other factors) do not have a significant impact on perceived fit4.
  • The amount of time spent with an organization does not correlate with values congruence, but the relationship between values congruence and organizational commitment is stronger with longer tenure15.

Listen to Bob Keiller on how Core Values enhanced his team's performance and his organization's growth.

4. Stories bring Core Values to life.

"Great stories happen to those who can tell them." —Ira Glas

Stories reveal how values are expressed in daily work and how values have created defining moments in the organization's history—and ignite pride in shared core values18. Leaders who gather stories and promote values-based story sharing find their organization's values come to life; stories provide meaningful evidence of Core Values, uplift people, motivate teams, bind us together, and help set models to guide decisions, behavior, and relationships.

Engaging stories have five key components16:

Setting and CharactersThe time, place, context, and key players of the story
Build-upA sequence of events that leads to the high point of the story
Crisis or ClimaxThe key event / high point / or moment of truth within the story
Learning / GrowthWhat the key players learned
New Behavior or AwarenessHow things are different / How the organization changed

Stories as Proof

Stories reinforce core values by highlighting an actively present force in the organization's actions, interactions, and decisions. Stories capture those moments that prove the organization’s values are not just empty words on the wall or website.

To gather values stories, simply ask people, "When have we proven that we believe in this principle?" Reflect on the stories—and add yours. Listen to what has struck and stuck with people.

Stories as Recognition

Stories about peoples' contributions to the organization's integrity and culture send a strong message13. There's a direct boost of recognition for team members that empowers and affirms their efforts.

Tell stories that recognize people for upholding core values. The affirmation of stories motivates others to work to create future stories.

Stories as Social Glue

Reinforcing core values with stories is an engaging way to reflect on what's happening to support or undermine core values.

Leaders can influence all levels and invite team members to contribute to shaping culture through their stories. Storytelling brings everyone together as learners, leaders, and collaborators. Members of the organization who see themselves as authoring stories take more active roles20.

Ask team members to share how core values impact their daily work. Recognize that all team members co-create the organization's story.

Stories as Activators

Stories can fuel decision-making and guide people in making their contributions. Sharing stories helps make Core Values come to life and shape the future20.

In planning and strategy discussions:

  • Take some time to craft stories that align with core values.
  • Emphasize the importance of core values.
  • Share how you imagine things.
  • Engage people to imagine the future.
  • Work together to identify core values connections.

Use the resulting stories to fuel operational decisions about what each person or team needs to contribute to make the story a reality19.

Modelling Core Values

The biggest threat to Core Values is complacency. Once formed and established, it’s important to question and discuss Core Values as an integral part of decision-making and culture18. Leaders have an important role—model Core Values in action and guide team members throughout the organization to continue to engage Core Values in meaningful ways.

As social learning theory explains, people actively (and passively) observe others, and our observations influence our behaviors and choices. Take an active role in guiding employees' behavior through what you model in your decisions, actions, and relationships and your contributions to the organization's story2.

Listen here to a resort hotel CEO describing the power of storytelling.

For more assistance or insights into how your organization can articulate and activate shared Core Values, reach out to our team. Coetic’s Core Values Sort is a fun, data-driven approach to assess Core Values or to guide a team to articulate aspirational values. If you’d like more support, we also facilitate a high-engagement Core Values Crafting process with your team and stakeholders, and we coach leadership teams to facilitate interactive virtual or in-person workshops reconnecting team members to how Core Values show up in daily work.

References

  1. Abbott, G. N., White, F. A., & Charles, M. A. (2005). Linking values and organizational commitment: A correlational and experimental investigation in two organizations. Journal of Occupational and Organizational Psychology, 78(4), 531–551. https://doi.org/10.1348/096317905X26174

  2. Bandura, A. (1971). Social learning theory. General Learning Press, 1–46.

  3. Bretz, Jr., Robert D., & Judge, T. A. (1994). Person–organization fit and the theory of work adjustment: Implications for satisfaction, tenure, and career success. Journal of Vocational Behavior, 44(1), 32–54. https://doi.org/10.1006/jvbe.1994.1003

  4. Cable, D. M., & Judge, T. A. (1996). Person–organization fit, job choice decisions, and organizational entry. Organizational Behavior and Human Decision Processes, 67(3), 294–311. https://doi.org/10.1006/obhd.1996.0081

  5. Dvorak, N., & Patel. (2018). It’s time for a core values audit. Gallup.com. https://www.gallup.com/workplace/243434/time-core-values-audit.aspx

  6. Edwards, J. R., & Cable, D. M. (2009). The value of value congruence. Journal of Applied Psychology, 94(3), 654–677. https://doi.org/10.1037/a0014891

  7. Erdogan, B., Kraimer, M. L., & Liden, R. C. (2004). Work value congruence and intrinsic career success: The compensatory roles of leader-member exchange and perceived organizational support. Personnel Psychology, 57(2), 305–332. https://doi.org/10.1111/j.1744-6570.2004.tb02493.x

  8. Finegan, J. E. (2000). The impact of person and organizational values on organizational commitment. Journal of Occupational and Organizational Psychology, 73(2), 149–169. https://doi.org/10.1348/096317900166958

  9. Goodman, S. A., & Svyantek, D. J. (1999). Person–organization fit and contextual performance: Do shared values matter. Journal of Vocational Behavior, 55(2), 254–275. https://doi.org/10.1006/jvbe.1998.1682

  10. Hewlin, P. F. (2009). Wearing the cloak: Antecedents and consequences of creating facades of conformity. Journal of Applied Psychology, 94(3), 727–741. https://doi.org/10.1037/a0015228

  11. Kristof-Brown, A. L., Zimmerman, R. D., & Johnson, E. C. (2005). Consequences of individuals’ fit at work: A meta-analysis of person-job, person-organization, person-group, and person-supervisor fit. Personnel Psychology, 58(2), 281–342. https://doi.org/10.1111/j.1744-6570.2005.00672.x

  12. Lauver, K. J., & Kristof-Brown, A. (2001). Distinguishing between employees’ perceptions of person–job and person–organization fit. Journal of Vocational Behavior, 59(3), 454–470. https://doi.org/10.1006/jvbe.2001.1807

  13. Luthans, K. (2000). Recognition: A powerful, but often overlooked, leadership tool to improve employee performance. Journal of Leadership Studies, 7(1), 31–39. https://doi.org/10.1177/107179190000700104

  14. Maslach, C., & Leiter, M. P. (2008). Early predictors of job burnout and engagement. Journal of Applied Psychology, 93(3), 498–512. https://doi.org/10.1037/0021-9010.93.3.498

  15.   Meglino, B. M., Ravlin, E. C., & Adkins, C. L. (1989). A work values approach to corporate culture: A field test of the value congruence process and its relationship to individual outcomes. Journal of Applied Psychology, 74(3), 424–432. https://doi.org/10.1037/0021-9010.74.3.424
    
  16. Morgan, S., & Dennehy, R. F. (1997). The power of organizational storytelling: A management development perspective. Journal of Management Development, 16(7), 494–501. https://doi.org/10.1108/02621719710169585

  17. Posner, B. Z. (2010). Another look at the impact of personal and organizational values congruency. Journal of Business Ethics, 97(4), 535–541. https://doi.org/10.1007/s10551-010-0530-1

  18. Schein, E. H. (1990). Organizational culture. American Psychologist, 45(2), 109–119. https://doi.org/10.1037/0003-066X.45.2.109

  19. Siegall, M., & McDonald, T. (2004). Person‐organization value congruence, burnout and diversion of resources. Personnel Review, 33(3), 291–301. https://doi.org/10.1108/00483480410528832

  20. Spear, S., & Roper, S. (2016). Storytelling in organisations: Supporting or subverting corporate strategy? Corporate Communications: An International Journal, 21(4), 516–532. https://doi.org/10.1108/CCIJ-02-2016-0020

  21. Swap, W., Leonard, D., Shields, M., & Abrams, L. (2001). Using mentoring and storytelling to transfer knowledge in the workplace. Journal of Management Information Systems, 18(1), 95–114. https://doi.org/10.1080/07421222.2001.11045668

  22. Verquer, M. L., Beehr, T. A., & Wagner, S. H. (2003). A meta-analysis of relations between person–organization fit and work attitudes. Journal of Vocational Behavior, 63(3), 473–489. https://doi.org/10.1016/S0001-8791(02)00036-2

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